Re: Delta Pilots End Era of Luxurious Pay

[Peter MacPherson]

Did Delta also end an era of luxurious "management pay" by 32.5 percent?
I tend to think not.....


"n+e+w+s" > wrote in message
news:pqg9p019nhi2h9ugk3in97plpga0ipan5n@news...
> November 12, 2004
> http://www.nytimes.com
>
> Delta Pilots Vote to Accept 32.5% Pay Cut
> By MICHELINE MAYNARD
>
> Pilots at Delta Air Lines overwhelmingly approved a new five-year
> contract yesterday with $1 billion in annual concessions sought by the
> airline, which had threatened to file for bankruptcy if the pilots did
> not acquiesce.
>
> The deal, which cuts pay by 32.5 percent, would reduce the salary of
> the highest-paid Delta pilot by more than $90,000, to about $185,000 a
> year. It ends an era of luxurious pilot pay in the airline industry,
> but does not end Delta's problems.
>
> Delta, the nation's third-largest airline, must still arrange new
> terms on its debt, slash its costs and carry out a strategy that it
> hopes will take it through the industry's gathering storm.
>
> "There are no winners at this point," Delta's chief executive, Gerald
> A. Grinstein, said yesterday in a letter to pilots. "We unfortunately
> remain in turbulent times."
>
> The pilots' vote simply allows Delta to "back away from the cliff by
> several steps," said Philip A. Baggaley, an airline analyst with
> Standard & Poor's Ratings Services.
>
> The Air Line Pilots Association, which represents Delta's pilots, said
> the pact was approved by 79 percent of those voting. It said about 91
> percent of its members at Delta cast ballots - considered a high
> turnout in a union vote. Delta's pilots are the airline's only
> unionized labor group.
>
> But the stakes were high for both the pilots and Delta, which is based
> in Atlanta. The airline had threatened repeatedly to seek bankruptcy
> protection unless its pilots agreed to cut the wages and benefits that
> had made them the best paid in the airline industry.
>
> "Our airline has been managed to the brink of bankruptcy and the Delta
> pilots had to decide between two bad choices," John Malone, chairman
> of the master executive council of the pilots' union, said in a
> statement yesterday. "They chose the lesser of two evils."
>
> The union and the airline reached a tentative agreement on Oct. 28,
> hours after a deadline for a deal, set by Mr. Grinstein. When the two
> sides finally agreed, Delta's lawyers were waiting in New York for a
> telephone call from Atlanta authorizing them to file bankruptcy
> papers.
>
> "This decision is meaningful to everyone at Delta," Mr. Grinstein said
> in his letter to the pilots. But he added, "Delta must stay
> competitive with the marketplace if we are to survive and compete."
>
> Delta's most senior pilots, flying its biggest aircraft, earned as
> much as $287,000 a year. By contrast, JetBlue Airways, a low-fare
> carrier that does not have unions, pays a top salary of $108,000 a
> year. Pilots at American Airlines, United, Northwest Airlines and US
> Airways have all approved cuts in the last year; Continental Airlines
> is in talks with its pilots.
>
> Along with pay cuts, Delta will also freeze its traditional pension
> plan for pilots and replace it with a less-generous 401(k) plan. Delta
> will also require pilots to pay more for health care. Pilots will be
> given the right to purchase options on 30 million new Delta shares.
>
> Delta's salaried employees have already taken 10 percent pay cuts,
> while Mr. Grinstein took the equivalent of a 25 percent cut in
> September. The airline has said it plans to cut up to 7,000 jobs
> through 2006.
>
> Approval of the cuts by Delta's pilots allows Delta to conclude
> lending agreements with GE Capital Aviation Services and American
> Express Travel Related Services. The airline is also trying to
> persuade holders of $20 billion in debt to accept terms more favorable
> to Delta. It will get the results of that offer next week.
>
> On top of that, Delta has announced plans to fight both its big rivals
> and low-fare airlines that are taking bites out of its traditional
> strongholds in Atlanta and Florida. Early next year, it will adjust
> its schedules to focus more on direct flights from hubs in Atlanta,
> Cincinnati and Salt Lake City, and it will close its hub in Dallas.
>
> But if it cannot knit all those pieces together, analysts said, Delta
> could find itself again on the brink of Chapter 11.
>
> One tool the airline expects to lean upon more heavily is Song, the
> low-fare operation started by Delta last year, featuring lime-green
> Boeing 757 jets and uniforms designed by Kate Spade. Delta's
> precarious finances stalled Song's growth plans in 2003. But Delta
> plans to add a dozen more planes and new cities to Song's lineup next
> year.
>
> Derided in some aviation circles as a marketing gimmick, Song has to
> prove it can be consistent - planes range from half-empty to nearly
> full and profits from minuscule to generous, depending on the route.
>
> Song does best on routes to Florida, and worst to Las Vegas, people
> inside the airline with knowledge of its operations said. Delta has
> never broken out separate results for Song.
>
> Another of the industry's troubled airlines, US Airways, reached deals
> with lenders and lease holders that will allow it to keep flying most
> of its aircraft, although it said leases on four of its 282 planes
> were likely to be rejected. On Sept. 12, US Airways filed for
> bankruptcy protection for the second time in two years.

[Ron Natalie]

Peter MacPherson wrote:
> Did Delta also end an era of luxurious "management pay" by 32.5 percent?
> I tend to think not.....

Probably not, but there are more pilots than managers (one would hope). It's
the same story. When you look at the bottom line, the total amount of money
spent on payroll by the rank-and-file is a far juicier cost-cutting target than
the amount spent on the few highly compensated executives.

[Mike Rapoport]

I think they cut non-pilot salaried employees 10% with the CEO taking a 25%
cut. Pilot salaries were the most rediculous so they were cut the most.

Mike
MU-2


"Ron Natalie" > wrote in message
m...
> Peter MacPherson wrote:
>> Did Delta also end an era of luxurious "management pay" by 32.5 percent?
>> I tend to think not.....
>
> Probably not, but there are more pilots than managers (one would hope).
> It's
> the same story. When you look at the bottom line, the total amount of
> money
> spent on payroll by the rank-and-file is a far juicier cost-cutting target
> than
> the amount spent on the few highly compensated executives.

[Peter MacPherson]

Maybe the senior pilots flying heavies internationally are making the
$285,000
the article was talking about, but what about the vast majority that aren't
making close to that? Their salaries certainly aren't ridiculous(IMO). But
I'm sure the pilots union realizes that a 32.5 percent pay cut is better
than
no pay.



"Mike Rapoport" > wrote in message
link.net...
>I think they cut non-pilot salaried employees 10% with the CEO taking a 25%
>cut. Pilot salaries were the most rediculous so they were cut the most.
>
> Mike
> MU-2
>
>
> "Ron Natalie" > wrote in message
> m...
>> Peter MacPherson wrote:
>>> Did Delta also end an era of luxurious "management pay" by 32.5 percent?
>>> I tend to think not.....
>>
>> Probably not, but there are more pilots than managers (one would hope).
>> It's
>> the same story. When you look at the bottom line, the total amount of
>> money
>> spent on payroll by the rank-and-file is a far juicier cost-cutting
>> target than
>> the amount spent on the few highly compensated executives.
>
>

[Dave S]

kontiki wrote:
> Chris wrote:
>
>>
>> It is amazing these airlines have soaked up billions of Dollars in
>> Federal subsidies and still cannot get by.
>>
> Exactly.
>
When you sell your product for less than it costs to provide, what would
you expect?

Dave

[Robert M. Gary]

"Peter MacPherson" > wrote in message news:<464ld.24424$V41.22997@attbi_s52>...
> Did Delta also end an era of luxurious "management pay" by 32.5 percent?
> I tend to think not.....

Perhaps I'm too conservative but I'll never understand that line of
thinking. Pilot's saleries are dictated by unions. There are 100
pilots wanting to work for every airline pilot employeed. Saleries
would normally be quite low with so many wanting those jobs, but the
union makes them high.
Executives have high saleries because they do a job few can do. Not
many people on this planet can be good CEOs. CEOs are highly paid for
the same reason NBA Basketball stars are, not many people can do those
jobs. CEOs can be let go if the board thinks their saleries are too
high, pilots cannot. If another CEO offers to work for Delta for less,
the board can fire the current CEO and hire the less expensive guy at
any time. The board cannot just hire their friends because they can
get fired. The institutional investors and fund managers make their
money 100% on the company's bottom line. They will not stand for
spending their money on a CEO being paid more than he's worth on the
market. The board are elected by these fund managers and institutional
invesytors. If the company spends more money than they need to, the
stock will do less well, the fund managers will lower their efficiency
rating, and investors (mostly retirement accounts) will choose other
funds to invest in. Everyone has someone to answer to. A good CEO can
make or break a company, its worth paying full market rate for a good
CEO.
Free market economics works amazingly well if we just let it be free.

-Robert, FAA Certified Flight Instructor, Commercial Pilot and MBA

[C Kingsbury]

"Robert M. Gary" > wrote in message
om...
>
> A good CEO can make or break a company
>

And there's been no lack of "breaking" going on in the airline biz lately.
It's been over 20 years since deregulation, they can't keep using that
excuse. The airlines are where they are today because of management building
companies with high cost structures. Many of those managers are still there.

>
> Free market economics works amazingly well if we just let it be free.
>

I think you're a little naive about the way business really works at the
level of a company like Delta. CEO pay has been increasing dramatically
across the board not just for companies that have done well, but at those
that haven't. So much so that even the institutions are starting to show
signs of concern. These same wonderful institutional investors who, by the
way, were making billions flipping IPOs and market-timing your mutual funds.
They're all a bunch of crooks and it pains me to say it because I think the
only thing worse than capitalism is everything else. But we've failed lately
in policing the fraud and as a result it's spread far and wide. Somebody
please explain to me why Martha Stewart is in jail and Ken Lay isn't.

[Earl Grieda]

"Robert M. Gary" > wrote in message
om...
> "Peter MacPherson" > wrote in message
news:<464ld.24424$V41.22997@attbi_s52>...
> > Did Delta also end an era of luxurious "management pay" by 32.5 percent?
> > I tend to think not.....
> ..snip
>
> Executives have high saleries because they do a job few can do. Not
> many people on this planet can be good CEOs. CEOs are highly paid for
> the same reason NBA Basketball stars are, not many people can do those
> jobs.

Baloney. This is just CEO propanganda. Easily, 50% or more, of middle
managers could do the CEO job. There is nothing difficult or special about
it. Simply because management is a pyramid with one job at the top does not
mean that the top job is so special that only a few are capable of doing it.
In the computer industry most engineers could be adequate CEOs, but few CEOs
can be even mediocre engineers.

Earl G

[Bob Noel]

In article >,
(Robert M. Gary) wrote:

> Executives have high saleries because they do a job few can do. Not
> many people on this planet can be good CEOs.

not many of the CEOs are actually good CEOs.

--
Bob Noel

[Dan Luke]

"Robert M. Gary" > wrote in message
om...
> "Peter MacPherson" > wrote in message
> news:<464ld.24424$V41.22997@attbi_s52>...
>> Did Delta also end an era of luxurious "management pay" by 32.5
>> percent?
>> I tend to think not.....

>> Executives have high saleries because they do a job few can do. Not
> many people on this planet can be good CEOs. CEOs are highly paid for
> the same reason NBA Basketball stars are, not many people can do those
> jobs.

********. Over 15 years I watched a succession of increasingly inept
yet ever-higher-paid CEOs run the Fortune 100 company I worked for into
the ground, taking a lot of my 401K with it. My experience is by no
means unusual, either.

There is something badly wrong with corporate America. The companies
are managed for quarterly results and any chicanery to make the short
term bottom line look good is winked at by boards of directors and
federal regulators. The number one requirement for CEO candidates is a
good line of bs, not exceptional management talent.
--
Dan
C172RG at BFM

[Peter MacPherson]

>CEOs can be let go if the board thinks their saleries are too
>high, pilots cannot.<

What about being let go for incompetence? You don't see this
happen very often, though you should. How many companies
are run into the ground by incompetent CEO's who then walk
away at the end with a boat load of cash.

>If another CEO offers to work for Delta for less,
> the board can fire the current CEO and hire the less expensive guy at
> any time.<

Huh? So these CEO's are just working paycheck to paycheck? ; )
I think I remember something about a contract.



"Robert M. Gary" > wrote in message
om...
> "Peter MacPherson" > wrote in message
> news:<464ld.24424$V41.22997@attbi_s52>...
>> Did Delta also end an era of luxurious "management pay" by 32.5 percent?
>> I tend to think not.....
>
> Perhaps I'm too conservative but I'll never understand that line of
> thinking. Pilot's saleries are dictated by unions. There are 100
> pilots wanting to work for every airline pilot employeed. Saleries
> would normally be quite low with so many wanting those jobs, but the
> union makes them high.
> Executives have high saleries because they do a job few can do. Not
> many people on this planet can be good CEOs. CEOs are highly paid for
> the same reason NBA Basketball stars are, not many people can do those
> jobs. CEOs can be let go if the board thinks their saleries are too
> high, pilots cannot. If another CEO offers to work for Delta for less,
> the board can fire the current CEO and hire the less expensive guy at
> any time. The board cannot just hire their friends because they can
> get fired. The institutional investors and fund managers make their
> money 100% on the company's bottom line. They will not stand for
> spending their money on a CEO being paid more than he's worth on the
> market. The board are elected by these fund managers and institutional
> invesytors. If the company spends more money than they need to, the
> stock will do less well, the fund managers will lower their efficiency
> rating, and investors (mostly retirement accounts) will choose other
> funds to invest in. Everyone has someone to answer to. A good CEO can
> make or break a company, its worth paying full market rate for a good
> CEO.
> Free market economics works amazingly well if we just let it be free.
>
> -Robert, FAA Certified Flight Instructor, Commercial Pilot and MBA

[Bob Fry]

(Robert M. Gary) writes:

> Executives have high saleries because they do a job few can do.

I could not agree less with this.

Just like in many job categories--including airline pilots, pro
atheletes, and pop singers--there are many people who could do the job
at the same or very nearly the same skill level. It's very obvious to
anyone who reads the business, sports, or social sections of the
newspapers that numbers of very highly paid but incompetent and
dishonest people are employed in all those jobs, and many others.

I'm an engineer for the state. I see bozos here but I also see
hardworking and highly skilled people who are grossly underpaid. I
have a guy with 4 degrees from UC Berkeley and MIT working for me now.
He could get 50% more working for other govt. agencies and maybe even
more working for private. But he likes what he's doing and so
tolerates the crap pay. This is true for many of the elite jobs, so I
simply don't believe that business, sports, or the pop music biz would
fail without multi-million dollar salaries.

[aluckyguess]

Very well said. I hate to say it put if you can replace the pilots with
pilots of the same skill for less the company should be able to do it.
"Robert M. Gary" > wrote in message
om...
> "Peter MacPherson" > wrote in message
> news:<464ld.24424$V41.22997@attbi_s52>...
>> Did Delta also end an era of luxurious "management pay" by 32.5 percent?
>> I tend to think not.....
>
> Perhaps I'm too conservative but I'll never understand that line of
> thinking. Pilot's saleries are dictated by unions. There are 100
> pilots wanting to work for every airline pilot employeed. Saleries
> would normally be quite low with so many wanting those jobs, but the
> union makes them high.
> Executives have high saleries because they do a job few can do. Not
> many people on this planet can be good CEOs. CEOs are highly paid for
> the same reason NBA Basketball stars are, not many people can do those
> jobs. CEOs can be let go if the board thinks their saleries are too
> high, pilots cannot. If another CEO offers to work for Delta for less,
> the board can fire the current CEO and hire the less expensive guy at
> any time. The board cannot just hire their friends because they can
> get fired. The institutional investors and fund managers make their
> money 100% on the company's bottom line. They will not stand for
> spending their money on a CEO being paid more than he's worth on the
> market. The board are elected by these fund managers and institutional
> invesytors. If the company spends more money than they need to, the
> stock will do less well, the fund managers will lower their efficiency
> rating, and investors (mostly retirement accounts) will choose other
> funds to invest in. Everyone has someone to answer to. A good CEO can
> make or break a company, its worth paying full market rate for a good
> CEO.
> Free market economics works amazingly well if we just let it be free.
>
> -Robert, FAA Certified Flight Instructor, Commercial Pilot and MBA

[aluckyguess]

I think your wrong a good CEO is the company and there are few talented
enough to do the job.
"Earl Grieda" > wrote in message
nk.net...
>
> "Robert M. Gary" > wrote in message
> om...
>> "Peter MacPherson" > wrote in message
> news:<464ld.24424$V41.22997@attbi_s52>...
>> > Did Delta also end an era of luxurious "management pay" by 32.5
>> > percent?
>> > I tend to think not.....
>> ..snip
>>
>> Executives have high saleries because they do a job few can do. Not
>> many people on this planet can be good CEOs. CEOs are highly paid for
>> the same reason NBA Basketball stars are, not many people can do those
>> jobs.
>
> Baloney. This is just CEO propanganda. Easily, 50% or more, of middle
> managers could do the CEO job. There is nothing difficult or special
> about
> it. Simply because management is a pyramid with one job at the top does
> not
> mean that the top job is so special that only a few are capable of doing
> it.
> In the computer industry most engineers could be adequate CEOs, but few
> CEOs
> can be even mediocre engineers.
>
> Earl G
>
>

[aluckyguess]

"Bob Fry" > wrote in message
...
> (Robert M. Gary) writes:
>
>> Executives have high saleries because they do a job few can do.
>
> I could not agree less with this.
>
> Just like in many job categories--including airline pilots, pro
> atheletes, and pop singers--there are many people who could do the job
> at the same or very nearly the same skill level. It's very obvious to
> anyone who reads the business, sports, or social sections of the
> newspapers that numbers of very highly paid but incompetent and
> dishonest people are employed in all those jobs, and many others.
>
> I'm an engineer for the state. I see bozos here but I also see
> hardworking and highly skilled people who are grossly underpaid. I
> have a guy with 4 degrees from UC Berkeley and MIT working for me now.
> He could get 50% more working for other govt. agencies and maybe even
> more working for private.
Degree's dont meen anthing on what somebodys worth. If he cant get twice the
pay he is stubid for not doing it. I believe he is afraid to leave. He lacks
confidence in himself, that or he likes the his cushy govermnet job.
But he likes what he's doing and so
> tolerates the crap pay. This is true for many of the elite jobs, so I
> simply don't believe that business, sports, or the pop music biz would
> fail without multi-million dollar salaries.

[Peter MacPherson]

"Peter MacPherson" > wrote in message news:...
> >CEOs can be let go if the board thinks their saleries are too
>>high, pilots cannot.<
>
> What about being let go for incompetence? You don't see this
> happen very often, though you should. How many companies
> are run into the ground by incompetent CEO's who then walk
> away at the end with a boat load of cash.
>
>>If another CEO offers to work for Delta for less,
>> the board can fire the current CEO and hire the less expensive guy at
>> any time.<
>
> Huh? So these CEO's are just working paycheck to paycheck? ; )
> I think I remember something about a contract.
>
>
>
> "Robert M. Gary" > wrote in message
> om...
>> "Peter MacPherson" > wrote in message
>> news:<464ld.24424$V41.22997@attbi_s52>...
>>> Did Delta also end an era of luxurious "management pay" by 32.5 percent?
>>> I tend to think not.....
>>
>> Perhaps I'm too conservative but I'll never understand that line of
>> thinking. Pilot's saleries are dictated by unions. There are 100
>> pilots wanting to work for every airline pilot employeed. Saleries
>> would normally be quite low with so many wanting those jobs, but the
>> union makes them high.
>> Executives have high saleries because they do a job few can do. Not
>> many people on this planet can be good CEOs. CEOs are highly paid for
>> the same reason NBA Basketball stars are, not many people can do those
>> jobs. CEOs can be let go if the board thinks their saleries are too
>> high, pilots cannot. If another CEO offers to work for Delta for less,
>> the board can fire the current CEO and hire the less expensive guy at
>> any time. The board cannot just hire their friends because they can
>> get fired. The institutional investors and fund managers make their
>> money 100% on the company's bottom line. They will not stand for
>> spending their money on a CEO being paid more than he's worth on the
>> market. The board are elected by these fund managers and institutional
>> invesytors. If the company spends more money than they need to, the
>> stock will do less well, the fund managers will lower their efficiency
>> rating, and investors (mostly retirement accounts) will choose other
>> funds to invest in. Everyone has someone to answer to. A good CEO can
>> make or break a company, its worth paying full market rate for a good
>> CEO.
>> Free market economics works amazingly well if we just let it be free.
>>
>> -Robert, FAA Certified Flight Instructor, Commercial Pilot and MBA
>
>

[Peter MacPherson]

>CEOs can be let go if the board thinks their saleries are too
>high, pilots cannot.<

What about being let go for incompetence? You don't see this
happen very often, though you should. How many companies
are run into the ground by incompetent CEO's who then walk
away at the end with a boat load of cash.

>If another CEO offers to work for Delta for less,
> the board can fire the current CEO and hire the less expensive guy at
> any time.<

Huh? So these CEO's are just working paycheck to paycheck? ; )
I think I remember something about a contract.



"Robert M. Gary" > wrote in message
om...
> "Peter MacPherson" > wrote in message
> news:<464ld.24424$V41.22997@attbi_s52>...
>> Did Delta also end an era of luxurious "management pay" by 32.5 percent?
>> I tend to think not.....
>
> Perhaps I'm too conservative but I'll never understand that line of
> thinking. Pilot's saleries are dictated by unions. There are 100
> pilots wanting to work for every airline pilot employeed. Saleries
> would normally be quite low with so many wanting those jobs, but the
> union makes them high.
> Executives have high saleries because they do a job few can do. Not
> many people on this planet can be good CEOs. CEOs are highly paid for
> the same reason NBA Basketball stars are, not many people can do those
> jobs. CEOs can be let go if the board thinks their saleries are too
> high, pilots cannot. If another CEO offers to work for Delta for less,
> the board can fire the current CEO and hire the less expensive guy at
> any time. The board cannot just hire their friends because they can
> get fired. The institutional investors and fund managers make their
> money 100% on the company's bottom line. They will not stand for
> spending their money on a CEO being paid more than he's worth on the
> market. The board are elected by these fund managers and institutional
> invesytors. If the company spends more money than they need to, the
> stock will do less well, the fund managers will lower their efficiency
> rating, and investors (mostly retirement accounts) will choose other
> funds to invest in. Everyone has someone to answer to. A good CEO can
> make or break a company, its worth paying full market rate for a good
> CEO.
> Free market economics works amazingly well if we just let it be free.
>
> -Robert, FAA Certified Flight Instructor, Commercial Pilot and MBA

[Robert M. Gary]

> Baloney. This is just CEO propanganda. Easily, 50% or more, of middle
> managers could do the CEO job. There is nothing difficult or special about
> it. Simply because management is a pyramid with one job at the top does not
> mean that the top job is so special that only a few are capable of doing it.
> In the computer industry most engineers could be adequate CEOs, but few CEOs
> can be even mediocre engineers.

Then we should see saleries drop pretty fast. It sounds like you feel
you are qualified to do the job. Let the board of directors know that
you are willing to work for a fraction of what the current CEO is
working for. If you are as qualfied as you think you are you should
have no problem getting the job.

-Robert

[Chris]

"Dave S" > wrote in message
link.net...
>
>
> kontiki wrote:
>> Chris wrote:
>>
>>>
>>> It is amazing these airlines have soaked up billions of Dollars in
>>> Federal subsidies and still cannot get by.
>>>
>> Exactly.
>>
> When you sell your product for less than it costs to provide, what would
> you expect?
>
> Dave

Either cut costs, raise the price or get out of the business.

[Dan Luke]

"Nik" wrote:

> You might well ask whether or not it is really reasonable for the
> airlines to pay for the politicians attempts to make us feel good.

Well said.

Unfortunately, most people insist on feeling good without regard for the
rationality of policies intended to soothe their anxieties. Every time
I have to go through the airport security charade, I get a mental image
of bin Laden laughing.
--
Dan

"There ought to be limits to freedom."
- George W. Bush

[Blueskies]

"C Kingsbury" > wrote in message ink.net...
>
> "Robert M. Gary" > wrote in message
> om...
>>
>> A good CEO can make or break a company
>>
>
> And there's been no lack of "breaking" going on in the airline biz lately.
> It's been over 20 years since deregulation, they can't keep using that
> excuse. The airlines are where they are today because of management building
> companies with high cost structures. Many of those managers are still there.
>
>>
>> Free market economics works amazingly well if we just let it be free.
>>
>
> I think you're a little naive about the way business really works at the
> level of a company like Delta. CEO pay has been increasing dramatically
> across the board not just for companies that have done well, but at those
> that haven't. So much so that even the institutions are starting to show
> signs of concern. These same wonderful institutional investors who, by the
> way, were making billions flipping IPOs and market-timing your mutual funds.
> They're all a bunch of crooks and it pains me to say it because I think the
> only thing worse than capitalism is everything else. But we've failed lately
> in policing the fraud and as a result it's spread far and wide. Somebody
> please explain to me why Martha Stewart is in jail and Ken Lay isn't.
>


http://www.lcurve.org/images/LCurveFlier2003.pdf

[Bob Fry]

"aluckyguess" > writes:

> > I'm an engineer for the state. I see bozos here but I also see
> > hardworking and highly skilled people who are grossly underpaid. I
> > have a guy with 4 degrees from UC Berkeley and MIT working for me now.
> > He could get 50% more working for other govt. agencies and maybe even
> > more working for private.

> Degree's dont meen anthing on what somebodys worth. If he cant get twice the
> pay he is stubid for not doing it. I believe he is afraid to leave. He lacks
> confidence in himself, that or he likes the his cushy govermnet job.

You are right that degrees are not a good indication of somebody's
worth, especially degrees from 2nd-tier universities, which tend to
hand them out liberally. It would be cruel of me to also say that I
hope spelling and grammar aren't indicators either, so I won't. But
you are very wrong about this individual. He is the most talented
person I've ever hired, very productive, and very confident. He stays
on because no other place will provide the opportunity to do what he
wants (develop an advanced numerical model).

The point is that pay is only one factor of several that make a job
desirable. In the case of CEOs or other highly paid jobs
(e.g. sports), I think beyond a certain point the money offered is not
wanted for what it can buy, but simply as an indicator of what the
boss thinks of you compared to others.

[Michael]

(Robert M. Gary) wrote
> Perhaps I'm too conservative but I'll never understand that line of
> thinking. Pilot's saleries are dictated by unions. There are 100
> pilots wanting to work for every airline pilot employeed.

Yes, and these days they are probably just as good, too.

There was a time when the job of airline captain required a very high
level of skill and judgment. That was the era when airliners flew in
the weather, not above it. When autopilots were junk, and hand-flying
an approach was work. That and many other factors made it important
that if you wanted to get your passengers where they were going when
they needed to get there without losing too many, you needed a skilled
pilot in the cockpit.

The skills necessary were not very quantifiable, and could not be
effectively acquired in the training environment - they were covered
by that nebulous term called 'experience' for a reason. They're STILL
not quantifiable, nor can they really be acquired in the training
environment. Those skills, which have pretty much lost relevance in
the airline profession, are still very relevant for flying piston
singles and light twins if you want to get to where you want to be
where you need to be there without crashing. Some idiots even insist
they're not real - we've got another thread like that going now.

However, the era that requied airline pilots to have those skills is
long gone. These days, the level of regulation and (more importantly)
automation is such that the experience gained flying freight and
charter in piston singles and twins is not really all that relevant
anymore. Automation has devalued the job. Eventually, top salaries
for a senior captain are going to stabilize around the $100K mark, as
is the case for any senior non-managerial, non-self-employed
professional. I believe they are already there at JetBlue.

> Executives have high saleries because they do a job few can do.

That is the theory. The problem, of course, is that they're usually
hired by people who can't do the job themselves and don't really know
what the job requies.

In that sense, hiring a CEO is a lot more like hiring a flight
instructor than it is like hiring an airline pilot. You're hiring him
for his expertise in an area where your expertise is limited (or
non-existent). Ideally, you want to evaluate him by the end-product -
how many and what percentage of his students achieved the goals you
want to achieve and how many failed - but that information is
generally very limited, and convoluted with other factors. In the
end, you will probably hire the one who gives the best sales pitch.

That's about how it is with CEO's. Getting that first CEO job is
mostly about convincing the board members (who don't know how to run
the company) that you know how to run the company. Once you've done
that, you have gained experience. That makes it easier to convince
the next board. If you have a good track record (which is a few
companies at best) you can command obscene salaries - because what's a
few million when it improves your chance of turning around a billion
dollar operation? Going with that logic, why not make the salary for
your basic CEO half a million (as was the case at Delta before he took
the pay cut?) As a minimum, you attract a better class of applicant.
I know lots of people who are willing to do the job for $100K a year,
but none who actually understand what the job entails. Just having
the necessary intellect to understand what the job entails and being
willing to put up with the unpleasantness of doing such a job is
enough to get a job that pays $100K a year - without being the 24/7
proposition that a CEO job is.

> Not many people on this planet can be good CEOs.

This is true - and not many are. In fact most CEO's are lousy CEO's.
See above - there really is no process for consistently picking good
ones.

> CEOs are highly paid for
> the same reason NBA Basketball stars are, not many people can do those
> jobs.

But most NBA players are not stars, and are still very well paid.
It's that halo effect - why not pay them a lot, the cost is small
compared to the overall cost, and you will get a better class of
applicant.

> CEOs can be let go if the board thinks their saleries are too
> high, pilots cannot. If another CEO offers to work for Delta for less,
> the board can fire the current CEO and hire the less expensive guy at
> any time.

That's objectively not true. CEO's have contracts.

Michael

[Dave Stadt]

"Dan Luke" > wrote in message
...
>
> "Nik" wrote:
>
> > You might well ask whether or not it is really reasonable for the
> > airlines to pay for the politicians attempts to make us feel good.
>
> Well said.
>
> Unfortunately, most people insist on feeling good without regard for the
> rationality of policies intended to soothe their anxieties. Every time
> I have to go through the airport security charade, I get a mental image
> of bin Laden laughing.

I suspect he is selling the US security equipment.

> --
> Dan
>
> "There ought to be limits to freedom."
> - George W. Bush
>
>

[Dave Stadt]

"John Mazor" > wrote in message
...
> "Chris" > wrote in message
> ...
> >
> > "Jay Honeck" > wrote in message
> > news:OFnld.92292$R05.12286@attbi_s53...
> > >> It is amazing these airlines have soaked up billions of Dollars in
> > >> Federal subsidies and still cannot get by.
> > >
> > > Which was, of course, the reason many of us argued against bailing
them
> > > out in the first place.
> > >
> > > If the business climate is such that an airline cannot make money
> without
> > > taxpayer support, let it die. The surviving airlines will pounce on
the
> > > opportunity, becoming more efficient in the long run.
> > >
> > > Personally, if we were going to waste money on such a grand scale, I'd
> > > rather have seen the Feds subsidize airline service to the
> small-to-medium
> > > sized airports in the heartland. This would have helped General
> Aviation
> > > more than anything else, in the long run.
> >
> > all this crap about security adding to their costs is total ********.
Most
> > if not all of this is passed on to the passenger anyway.
>
> All costs in any business are passed on to the consumer, in the long run.
>
> And it raises the price of a ticket, making air travel less competitive
with
> other modes.
>
> There's also a bias against network carriers. If you're a low-cost
carrier,
> most of your service is point to point. Network carriers run a lot of
> traffic through connecting flights at hubs, so some of the fees are
applied
> twice to the ticket price, once for each segment.

A very telling quite from a United employee a number of months ago "Of
course Southwest is making money, they fly people to where they want to go."
You would think that would have shown up in a United suggestion box at some
point in time.

[G.R. Patterson III]

Jim Rosinski wrote:
>
> "G.R. Patterson III" > wrote
>
> > Chrysler didn't get any bailout from the government. What they did was get the
> > government to cosign their loans. Since they survived, it didn't cost the
> > taxpayers a dime. Not the same as the airline situation at all.
>
> Forcing taxpayers to cosign on a loan counts as a bailout in my book,
> whether they (we) end up having to pay or not.

Well, it doesn't in mine.

George Patterson
If a man gets into a fight 3,000 miles away from home, he *had* to have
been looking for it.

[G.R. Patterson III]

devil wrote:
>
> In other words, cheaper than the rates the market would loan them at, when
> factoring in the risk. Which BTW is the normal practice.

No.

George Patterson
If a man gets into a fight 3,000 miles away from home, he *had* to have
been looking for it.

[R J Carpenter]

"John Mazor" > wrote in message
...
[someone said]
> > It is amazing what folks can do with the rules once the feds lock them
> > in. We have a new ritzy exurb going in where they noticed a federal
> > program to encourage broadband in farm areas. They used the subsidy to
> > set up their cable system for their houses. Well, it used to be farm
> > land and the feds were sloppy.
>
> Here the county is thinking of subsidizing an expansion of fiber cable,
> including what would be service to $400k houses.

But in the DC area, $400K is low-cost housing or townhouses. They hardly
build anything below $600K within 25 miles of DC. They want $800K for new
cardboard-wall townhouses not too far from me.

Mark my words, the conversion of telephone service to fiber will
reduce the ultimate reliability of phone service. There is still "copper"
into the home, and the conversion from fiber to copper takes place in nearby
electronics powered from the electric utility. When the lights go out, the
phone fiber-to-copper electronics run on battery UNTIL THE BATTERY RUNS
DOWN, a matter of a couple of days. So your phone will fail during an
extended electrical outage. Neat. Many cell-phone sites do not have a
backup generator, so they too fail when their battery runs down.

[Matt Barrow]

"Dan Luke" > wrote in message
...
> "There ought to be limits to freedom."
> - George W. Bush

If the personal freedoms guaranteed by the Constitution inhibit the
government's ability to govern the people, we should look to limit those
guarantees." -- Bill Clinton, August 12, 1993, MTV Interview

[Bob Fry]

"R J Carpenter" > writes:

> When the lights go out, the
> phone fiber-to-copper electronics run on battery UNTIL THE BATTERY RUNS
> DOWN, a matter of a couple of days. So your phone will fail during an
> extended electrical outage.

Your conventional all-copper-wire-to-the-Central-Office phone will
fail exactly in the same way. What do you think powers them during an
"extended electrical outage"??

[nobody]

Bob Fry wrote:
> Your conventional all-copper-wire-to-the-Central-Office phone will
> fail exactly in the same way. What do you think powers them during an
> "extended electrical outage"??

Your POTS phone doesn't need any power from your home. it is powered from the
phone company.

The central office has heavy duty battery backup and generators. And the
neighbourhood nodes have batteries and the telco then rotates portable
generators to recharge those batteries. problems occur when you have a truly
widespread outage where the telco doesn't have enough portable generators to
move around to recharge all neighbourhood nodes.

The solution is to use the telco's copper as a power source to power the fibre
link and one phone. This way you benefit from the telco's UPS systems and
don't need your own.

[Dan Luke]

"Matt Barrow" wrote:
> > "There ought to be limits to freedom."
> > - George W. Bush
>
> If the personal freedoms guaranteed by the Constitution inhibit the
> government's ability to govern the people, we should look to limit
> those
> guarantees." -- Bill Clinton, August 12, 1993, MTV Interview
>

They all think they're smarter than we are, and know what's "best" for
us. Unfortunately, most people are content to let "them" handle it,
whatever it is.
--
Dan
C172RG at BFM

[Dan Luke]

"Dave Stadt" wrote:
> A very telling quite from a United employee a number of months ago "Of
> course Southwest is making money, they fly people to where they want
> to go."
> You would think that would have shown up in a United suggestion box at
> some
> point in time.


Hee-hee! Beautiful.

Any veteran of servitude in a huge corporation will nod in recognition
at this. It's enough to make you scream when you're down in the forest
trying to make lumber and you realize upper mgmt. has forgotten what
trees are.
--
Dan
C172RG at BFM

[Dan Luke]

"R J Carpenter" wrote:
> Mark my words, the conversion of telephone service to fiber will
> reduce the ultimate reliability of phone service. There is still
> "copper"
> into the home, and the conversion from fiber to copper takes place in
> nearby
> electronics powered from the electric utility. When the lights go out,
> the
> phone fiber-to-copper electronics run on battery UNTIL THE BATTERY
> RUNS
> DOWN, a matter of a couple of days. So your phone will fail during an
> extended electrical outage. Neat. Many cell-phone sites do not have
> a
> backup generator, so they too fail when their battery runs down.

Data point: Bellsouth voice/DSL trunks in my neighborhood have all been
converted to underground FO. Power was out here on the Eastern Shore
for 3-5 days after hurricane Ivan, but I never lost service.
--
Dan
C172RG at BFM

[AES/newspost]

"R J Carpenter" > writes:

> When the lights go out, the
> phone fiber-to-copper electronics run on battery UNTIL THE BATTERY RUNS
> DOWN, a matter of a couple of days. So your phone will fail during an
> extended electrical outage.

Unless you simply put a twisted copper pair in with the fiber cable used
in FTTH (which for practicality of installation and maintenance is
certainly going to be a small "cable" of some sort, not just a single
fiber).

Undersea fiber optic cables -- which are a different matter, of course,
but aren't physically that much bigger than the coaxial cables used for
cable TV -- carry DC electrical power at _4000 V_ all the way across
oceans.

[Morgans]

"AES/newspost" > wrote
>
> Undersea fiber optic cables -- which are a different matter, of course,
> but aren't physically that much bigger than the coaxial cables used for
> cable TV -- carry DC electrical power at _4000 V_ all the way across
> oceans.

Really? I had always thought that glass was a good insulator, not a
conductor.

Fiber optic strands carry light. Metal carries electricity. Put both in
one cable assembly, and you have a combination, or dual purpose cable., I
believe which is also called a hybrid cable.
--
Jim in NC


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[nobody]

Morgans wrote:
> > cable TV -- carry DC electrical power at _4000 V_ all the way across
> > oceans.
>
> Really? I had always thought that glass was a good insulator, not a
> conductor.

Fibre optic repeaters every 40 to 60km need electricity to regenerate/amplify
the light pulses.

The high voltage reduces current and hence loss of energy through resistance
over such long distances.

[Capt.Doug]

>"Dave Stadt" wrote in message > A very telling quite from a United employee
>a number of months ago "Of
> course Southwest is making money, they fly people to where they want to
go."

I disagree. While somewhat better than a big hub, Southwest's system of
little hubs can mean as many as 3 connections to get to where I want to go.

Ever wonder why a connecting flight has the same flight number even when the
plane, crew, and gate change at the connection? To pay less tax.

D.

[G.R. Patterson III]

Morgans wrote:
>
> Fiber optic strands carry light. Metal carries electricity.

True, but the long distance people are getting power to the repeaters over fiber
somehow. We in the local telecom business suspected that they were using light over
fiber to drive photocells, but apparently fiber is a conductor if the voltage is high
enough. Personally, I'm suspicous of this claim. DC current is very prone to voltage
drop over distance, and we're talking 1500 miles or more (half the Atlantic ocean).
Still, with 4,000 volts, there's room for quite a bit of drop. I'd love to see the
specs for this.

George Patterson
If a man gets into a fight 3,000 miles away from home, he *had* to have
been looking for it.

[Morgans]

"nobody" > wrote

> Fibre optic repeaters every 40 to 60km need electricity to
regenerate/amplify
> the light pulses.
>
> The high voltage reduces current and hence loss of energy through
resistance
> over such long distances.

I understand the concept, but is it not true that the cable being used, has
metal (copper) strands, and glass strands in the same cable to make this
work? That was my only point.
--
Jim in NC


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[Nik]

What I saw visiting one of the ships that put out such cables - this is the
case.

Nik

"Morgans" > wrote in message
...
>
> "nobody" > wrote
>
>> Fibre optic repeaters every 40 to 60km need electricity to
> regenerate/amplify
>> the light pulses.
>>
>> The high voltage reduces current and hence loss of energy through
> resistance
>> over such long distances.
>
> I understand the concept, but is it not true that the cable being used,
> has
> metal (copper) strands, and glass strands in the same cable to make this
> work? That was my only point.
> --
> Jim in NC
>
>
> ---
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>
>

[Dylan Smith]

In article >, Wolfgang Schwanke wrote:
>> CEOs are highly paid for
>> the same reason NBA Basketball stars are, not many people can do those
>> jobs.
>
> Millions of people have business degrees, and I resent looking upon those
> folks as "stars" :).

They aren't "stars", and it's almost a perversion of the laws of supply
and demand if you look at it simplistically. Take the sports or music
example from the original poster.

There are relatively few rock stars paid millions. Is this because there
are only a few people who can manage to be rock stars? No. In this
island I live on, with a population of 76000, there are dozens of bands
of various types who make GOOD original music. Musical talent is a
pretty common trait in the population as a whole - most people given the
inclination can learn to play an instrument well or sing or write songs,
and many do.
Same with sports - let's take football (tr. American: soccer) - football
stars are paid millions. But, take for example, Wayne Rooney. I bet
there are tens of thousands of people in Britain who are at least as
skilled as him.
And same with CEOs.

Now surely, with the laws of supply and demand, since there's only a few
jobs to fill (of either the rock star, footballer or CEO kind), but tens
of thousands of people (at least) who have the talent to do them,
surely, with 10,000 people available to fill each job (and willing to do
so) you shouldn't even have to pay them?

I think it comes down to cult of personality. Wayne Rooney, for example,
is worth millions as a footballer not because he's unique in his talent,
but because he's Wayne Rooney and there's only one of him (even if
there may be thousands who have his talent). Same with bands. Same with
CEOs - it becomes about a particular person, and often (especially in
business) about the networks they have developed and politicking they
can do rather than the laws of supply and demand for a particular skill.

--
Dylan Smith, Castletown, Isle of Man
Flying: http://www.dylansmith.net
Frontier Elite Universe: http://www.alioth.net
"Maintain thine airspeed, lest the ground come up and smite thee"

[Morgans]

"Mike Rapoport" > wrote

> I agree that
> the industry needs to shed capacity but it is hard to do.

Why don't they sell them to the Chinese? They ought to be needing more
capacity about now.

Cross posting deleted.
--
Jim in NC


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