Questions about Privatizing ATC

[Jay Honeck]

Okay, so the Bush Administration says it wants to privatize ATC services,
apparently saving the taxpayers millions (billions?) of dollars.

The controllers say "No way!", claiming that putting ATC into the hands of
private businesses will jeopardize air safety, etc.

G.A. pilots say "No way!" because the Gubmint will want to start charging
"User's fees" to those of us who fly, making an already costly activity
prohibitively expensive.

So what's the solution here? Obviously something is wacky with current
costs if privatizing a SINGLE control tower (Vandenberg AFB, in California)
can save over $500,000.00 in a 3-year period! If this is true, why can't
the current controllers sit down with management and find ways to save that
kind of money, thus defusing the issue?

It seems to me the numbers here are just too huge. Somebody is not telling
the whole truth...
--
Jay Honeck
Iowa City, IA
Pathfinder N56993
www.AlexisParkInn.com
"Your Aviation Destination"

[EDR]

In article <CTS_a.146659$uu5.22344@sccrnsc04>, Jay Honeck
> wrote:
> It seems to me the numbers here are just too huge. Somebody is not telling
> the whole truth...

Like an Oreo, the truth lies in the stuffing.
What we are looking at is "political payoff".
Best example is to look what has happened to the military. Over 50% of
the support services have been privatized to campaign contributors.
Business who have outsourced their services have been badly burned by
brain-drain (loss of key employees knowledge) and spiraling contract
costs resulting in reduced services. New management comes in and
repeats the process. It's a revolving door.
When you retain your own employees, you retain the flexibility to
control your costs and your business.

[Bob Noel]

In article <CTS_a.146659$uu5.22344@sccrnsc04>, "Jay Honeck"
> wrote:

> So what's the solution here? Obviously something is wacky with current
> costs if privatizing a SINGLE control tower (Vandenberg AFB, in
> California)
> can save over $500,000.00 in a 3-year period! If this is true, why can't
> the current controllers sit down with management and find ways to save
> that
> kind of money, thus defusing the issue?

civil service, union, Congress

It's similar to any out-sourcing investigation.

--
Bob Noel

[David Reinhart]

In case you hadn't heard, the administration has just this week declared
inspection of shrimp to be an "inherently governmental function". Inspecting
shellfish, yes. Controlling air traffic, no. Stupid, stupid, stupid.

Dave Reinhart


Jay Honeck wrote:

> Okay, so the Bush Administration says it wants to privatize ATC services,
> apparently saving the taxpayers millions (billions?) of dollars.
>
> The controllers say "No way!", claiming that putting ATC into the hands of
> private businesses will jeopardize air safety, etc.
>
> G.A. pilots say "No way!" because the Gubmint will want to start charging
> "User's fees" to those of us who fly, making an already costly activity
> prohibitively expensive.
>
> So what's the solution here? Obviously something is wacky with current
> costs if privatizing a SINGLE control tower (Vandenberg AFB, in California)
> can save over $500,000.00 in a 3-year period! If this is true, why can't
> the current controllers sit down with management and find ways to save that
> kind of money, thus defusing the issue?
>
> It seems to me the numbers here are just too huge. Somebody is not telling
> the whole truth...
> --
> Jay Honeck
> Iowa City, IA
> Pathfinder N56993
> www.AlexisParkInn.com
> "Your Aviation Destination"

[Gerry Caron]

"Jay Honeck" > wrote in message
news:CTS_a.146659$uu5.22344@sccrnsc04...
>
> So what's the solution here? Obviously something is wacky with current
> costs if privatizing a SINGLE control tower (Vandenberg AFB, in
California)
> can save over $500,000.00 in a 3-year period! If this is true, why can't
> the current controllers sit down with management and find ways to save
that
> kind of money, thus defusing the issue?
>
> It seems to me the numbers here are just too huge. Somebody is not
telling
> the whole truth...

In this case I expect it's a case of Air Force unique issues and Air Force
accounting.

Having spent 5 years at VAFB, I can say that tower duty there would be
pretty boring for an AF controller. There were about a half dozen helos and
an aero club for based a/c. Most of the traffic I saw out there was
transient training a/c (BUFFs, P-3s, tankers, etc.) that came in, did a few
low approaches and split. The field (and tower) were only open 7 am to 5
pm.

The problem is that an AF controller is critically manned (always) and
controllers have to be proficient at all aspects of their job. They can be
mobilized and deployed anywhere on short notice and have to fill in at
approach control, tac air control or any number of jobs. All that requires
constant training. If he can't get the training locally, it means routine
TDY for training. That means extra expense and extra staff to handle the
work while everyone rotates thru training. Just being a tower controller at
a field is not an option.

The part about being critically manned means that the controllers are going
to be moving a lot. It's a domino effect of filling vacancies and adjusting
experience mixes at bases world wide.

The accounting is that the AF will include all those costs of training,
retraining, personnel moves, etc., as part of the costs.

So contracting out the work where there will be 4 or 5 controllers who can
be nothing more than tower controllers with presumably much less turnover is
likely to save a bundle.

On top of that, $500K over 3 years equates to approximately the cost of 1
full time professional (as in highly skilled) employee with all benefits and
overhead thrown in.

Gerry

[G.R. Patterson III]

Jay Honeck wrote:
>
> This seems hugely over-blown. I'd be interested in how you arrived at that?

In major businesses (like AT&T, IBM, etc.), the cost of an employee is roughly
three times his or her salary. Costs include office space, pension, health
care, and a portion of the salaries of the people that make out paychecks and
W-2s. It all adds up.

George Patterson
They say that nothing's certain except death and taxes. The thing is,
death doesn't get worse every time Congress goes into session.
Will Rogers

[Gerry Caron]

"Jay Honeck" > wrote in message
news:Z2Z_a.148115$YN5.97663@sccrnsc01...
> > On top of that, $500K over 3 years equates to approximately the cost of
1
> > full time professional (as in highly skilled) employee with all benefits
> and
> > overhead thrown in.
>
> This seems hugely over-blown. I'd be interested in how you arrived at
that?
> --
Been dealing with labor rates for 25+ years -- Air Force, gov't contractors,
big companies, medium companies. Most places, the cost of an employee is
about 3 times their salary. It's pretty consistent. Even in a small
business with no benefits, an employee will cost 1 1/2 to 2 times salary.

With those overhead rates, that $500K would pay for one person earning about
$55K/yr. Not an unreasonable number for an AF or civil service controller.

[Bob Noel]

In article >, "Gerry
Caron" > wrote:

> Been dealing with labor rates for 25+ years -- Air Force, gov't
> contractors,
> big companies, medium companies. Most places, the cost of an employee is
> about 3 times their salary. It's pretty consistent. Even in a small
> business with no benefits, an employee will cost 1 1/2 to 2 times salary.

most of the loaded rates I see have the cost of an employee
to be about twice their salary. But 2x, 3x, too bad the employee
can't see it. :-/

--
Bob Noel

[Gerry Caron]

"john smith" > wrote in message
...
> "G.R. Patterson III" wrote:
> > In major businesses (like AT&T, IBM, etc.), the cost of an employee is
roughly
> > three times his or her salary. Costs include office space, pension,
health
> > care, and a portion of the salaries of the people that make out
paychecks and
> > W-2s. It all adds up.
>
> Pension???
> What company pays future pension payments for current employees?
>
Every company that has a pension plan.

If they offer a 401k and make matching contributions, those are pension
payments.

If they have a defined benefit plan, it has to be funded to cover future
liabilities of the plan. Do a search on "ERISA"

Today's WSJ had a really good article on the subject. A short read explains
why these plans are falling out of favor.

[MC]

Jay Honeck wrote:

> > On top of that, $500K over 3 years equates to approximately the cost of 1
> > full time professional (as in highly skilled) employee with all benefits
> and
> > overhead thrown in.
>
> This seems hugely over-blown. I'd be interested in how you arrived at that?

The actual cost of any employee is their salary/wages plus (benefits if any)
plus a share of the overheads that are required to keep that employee, (eg
offices/buildings, support-staff, utilities, etc, etc, etc)

Depending upon the industry, the real cost of an employee to an organisation
is somewhere between 2 and 4 times what the employee is paid.

[Jay Honeck]

> The actual cost of any employee is their salary/wages plus (benefits if
any)
> plus a share of the overheads that are required to keep that employee, (eg
> offices/buildings, support-staff, utilities, etc, etc, etc)
>
> Depending upon the industry, the real cost of an employee to an
organisation
> is somewhere between 2 and 4 times what the employee is paid.

It's funny to read you guys in "the corporate world" struggling to define
how much an employee is worth. I see all these arcane formulas, and
multipliers, and what have you, in an effort to quantify what work really
is... The conversation brings back many bad memories of attending
weeks-long budget sessions back when I was a corporate whore. We'd sit
there for hours on end, listening to this kind of stuff, nodding sagely and
desperately hoping to survive until the cocktail hour...

As a small businessman, on my third business, I will verify for you that
this is all crap. I'm here to tell you that there is only one way to define
what an employee is worth, and that's "How much work do they do?"

If the answer is "A lot", the second question to ask is "Can I get someone
to do the same work -- or more -- at the same quality, for less money?" In
the world that I inhabit, those are the only two things that matter.

In the world of Big Gubmint, it appears that these questions are rarely (if
ever) asked (it's much easier to invent a multiplier, divide the total
budget allotted by the multiplier, and then arrive at a number of people to
be hired, rather than do any actual analysis) but it appears that someone in
the Bush Administration is actually asking them with regards to ATC.

If I were an air traffic controller, I'd be taking a real hard look at this,
before someone else decided it for me.
--
Jay Honeck
Iowa City, IA
Pathfinder N56993
www.AlexisParkInn.com
"Your Aviation Destination"

[G.R. Patterson III]

john smith wrote:
>
> What company pays future pension payments for current employees?

Every company. A certain amount of money must be deposited in a special fund
every year for every employee. The amount varies from year to year based on
the amount of interest the funds generate. The Federal government specifies
the formulae for calculating the amount.

George Patterson
Brute force has an elegance all its own.

[Jay Honeck]

> > What company pays future pension payments for current employees?
>
> Every company. A certain amount of money must be deposited in a special
fund
> every year for every employee. The amount varies from year to year based
on
> the amount of interest the funds generate. The Federal government
specifies
> the formulae for calculating the amount.

???

This is news to me, George.

Only thing I pay into that even remotely fits this description is Federal
Unemployment 940 tax (FUTA).
--
Jay Honeck
Iowa City, IA
Pathfinder N56993
www.AlexisParkInn.com
"Your Aviation Destination"

[G.R. Patterson III]

Jay Honeck wrote:
>
> Only thing I pay into that even remotely fits this description is Federal
> Unemployment 940 tax (FUTA).

Last time I looked, you weren't a "major business (like AT&T, IBM, etc.)".

George Patterson
Brute force has an elegance all its own.

[Jay Honeck]

> To be honest, Jay. A million bucks just doesn't go very far these days.

Send it my way -- we'll make a small fortune out of it! :)
--
Jay Honeck
Iowa City, IA
Pathfinder N56993
www.AlexisParkInn.com
"Your Aviation Destination"

[Chip Jones]

"Jay Honeck" > wrote in message
news:Arq%a.156238$o%2.65939@sccrnsc02...

[snipped]

> If I were an air traffic controller, I'd be taking a real hard look at
this,
> before someone else decided it for me.
> --

What's the point anymore? Someone else is gonna decide for air traffic
controllers anyway. Down here we figure that we can't fight it, you people
don't care anyway (we're overpaid, underworked, replaceable whiners) and no
one will give two shakes until the first major mid-air after we get
privatized (at which time everyone in government will wring their hands and
point fingers at each other). Not much we Federal controllers can do as the
FAA sells off the NAS to the lowest bidder except plan for early retirement.
Come 2007 we're gonners.
Chip, ZTL




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[Snowbird]

"Chip Jones" > wrote in message >...

> What's the point anymore? Someone else is gonna decide for air traffic
> controllers anyway. Down here we figure that we can't fight it, you people
> don't care anyway

Tsk, tsk Chip. Expect airdrop of Swede Momsen memorabilia
you can read during wee-hour feeding.

(for those who have no idea who Swede Momsen was
http://www.onr.navy.mil/focus/blowballast/momsen/default.htm
though it doesn't quite do him justice)

You can fight anything. It's just a matter of whether you
believe it's worth fighting enough to figure out how. I'm
not judging, mind. These things take immense amounts of
energy and time. Famous saying "when up to your ass in
alligators, it's hard to pursue goal of draining the swamp"
applies.

Sydney