How Air Canada broke the law

[YYCToolGuy]

http://thinkpol.ca/2015/03/09/how-air-c ... t-of-work/


Air Canada had a very simple plan to increase its profits.

Step 1: Spin the airline’s heavy maintenance unit off as a separate entity
Step 2: Starve the spin-off of work and bankrupt it
Step 3: Outsource the operations to an Israeli military drone manufacturing company wholly owned by the government of Israel.

Air Canada spun off its in-house maintenance, repair and overhaul (MRO) unit Air Canada Technical Services as a separate company, AVEOS, in 2007, four years after the national carrier entered into bankruptcy protection.

In 2011, many Air Canada workers were transferred against their will to AVEOS, despite a legal challenge by International Association of Machinists and Aerospace Workers
to prevent this transfer.

Slowly, but surely, Air Canada started taking work away from AVEOS, and sending it abroad, First it was to Germanythen to China. As Air Canada accounted for 90% of AVEOS’s business, Air Canada’s actions hit the maintenance company hard, and AVEOS was forced to file for bankruptcy in March 2012 leave 2,600 employees jobless.

Air Canada CEO Calin Rovinescu, who raked in $9.5 million the same year, justified Air Canada’s actions by placing the blame squarely on AVEOS for not being “cost competitive”.

The Attorney General of Canada filed a law suit against Air Canada for breaching the Air Canada Public Participation Act which reads:

6. (1) The articles of continuance of the Corporation shall contain
…
(d) provisions requiring the Corporation to maintain operational and overhaul centres in the City of Winnipeg, the Montreal Urban Community and the City of Mississauga;

In February 2013, the Quebec Superior Court issued a 139-page ruling finding Air Canada guilty of violating the Air Canada Public Participation Act.

“The court concludes that Air Canada doesn’t respect the law put in place when it privatized in 1988,” Justice Martin Castonguay wrote.

Georges Bujold, general chairman, eastern region, for the International Association of Machinists and Aerospace Workers warned the workers not to have too high expectations about getting their jobs back anytime soon, as he expected Air Canada to drag this all the way to the
the Supreme Court, and a final ruling won’t be made for years.

Bujold’s prediction came true in the form of a terse email from Air Canada: “Air Canada will be appealing this Quebec Superior Court decision, given the importance of the matter, and makes no further comment at this time.”

Even if the Supreme Court rules in the Canadian workers’ favour, Bujold fears that the Harper government will simply pass legislation to overturn the decision.

“We never know with the Tories what position they would take but it wouldn’t surprise the IAM that Air Canada would make that request to the prime minister or the minister of transport to revisit the Air Canada Act and make those modifications,” Bujold said.

In January 2014, the Air Canada CEO accompanied Stephen Harper on the Prime Minister’s official visit to Isreal. A year later, Air Canada signed a maintenance deal with Israel Aerospace Industries, a company wholly owned by the government of Isreal, and considered to be a pioneer of drone technology.

Senate Judiciary Committee – Subcommittee on Constitution, Civil Rights and Human Rights heard from journalist and author Peter Bergen that “Israel is the world’s largest exporter of drones and drone technology, and the state-owned Israeli Aerospace Industries (IAI) has sold to countries as varied as Nigeria, Russia and Mexico. IAI has also reportedly sold a ‘loitering weapon’ called the Harop to India, Turkey, France, and Germany.”

Meanwhile, it has been turbulent time for many of the 2,600 workers who lost their jobs and had to wait almost two years to hear any news of their severance pay or pensions. Some workers are hopeful that Air Canada will drop its appeal and bring maintenance jobs back to Canada. Many others, however, are not holding their breath.

[niss]

Plus those mother fuckers lost like half my flights luggage! I'm sharpening my pitchfork!

[altiplano]

I thought niss would be happy the work was outsourced to Israel...

Don't think any heavy maintenance is being done in China... Singapore, but not China...

The ACPPA is a joke. Should be tossed aside anyway or all Canadian airlines should be governed by it. Level playing field and all for private corporations to complete...

How many years are we now since privatisation? Enough is enough.

[yycflyguy]

Pilots should take note of what happened to ACTS. There are similarities between what happened there and the current creation of rouge.

[flyincanuck]

Really? ACr is operated by ACPA pilots. Had they out-sourced the flying like Qantas did with Jet Star (and it was tremendously close), I'd agree - but I digress.

Interesting article.

[avyonx]

Not too sure why there is so much emphasis on IAI's Drone manufacturing...? What does that have to do with Air Canada sending their B767's to IAI for Heavy Checks? Interesting read though...some inaccuracies but i guess that's expected.

[boeingboy]

Not too sure why there is so much emphasis on IAI's Drone manufacturing...? What does that have to do with Air Canada sending their B767's to IAI for Heavy Checks? Interesting read though...some inaccuracies but i guess that's expected.

Because the OP has changed his original post - He's trying to push his anti-Israeli political agenda and rolling it into an Air Canada thread. He was told he may get more sympathy if he toned down the BS.

[yycflyguy]

Really? ACr is operated by ACPA pilots. Had they out-sourced the flying like Qantas did with Jet Star (and it was tremendously close), I'd agree - but I digress.

Interesting article.

When ACTS was spun off, all the AVEOS maintenance employees were originally Air Canada. Most were forced to AVEOS due to "juniority". They didn't want to go, but were forced.

Air Canada rouge has a separate operating certificate from mainline. Just because they are operated by ACPA pilots doesn't mean jack if they decide to sell off or close rouge.

[co-joe]

...
Air Canada rouge has a separate operating certificate from mainline. Just because they are operated by ACPA pilots doesn't mean jack if they decide to sell off or close rouge.

More likely the'd just stop giving flying to mainline which would eventually die leaving the LCC in its place. Lower wages, fewer benefits, win win.

[boeingboy]

When ACTS was spun off, all the AVEOS maintenance employees were originally Air Canada. Most were forced to AVEOS due to "juniority". They didn't want to go, but were forced.

That's BS.

They were given the choice to stay or leave. I told my friends they were nuts to stay - as I saw the writing on the wall when they first started talking about selling to DLH years before. Now if a private company decides to sit around thinking they have nothing to worry about and doesn't bother to go drum up any new business.....that's not really Air Canada's fault.

[yycflyguy]

When ACTS was spun off, all the AVEOS maintenance employees were originally Air Canada. Most were forced to AVEOS due to "juniority". They didn't want to go, but were forced.

That's BS.

They were given the choice to stay or leave. I told my friends they were nuts to stay - as I saw the writing on the wall when they first started talking about selling to DLH years before. Now if a private company decides to sit around thinking they have nothing to worry about and doesn't bother to go drum up any new business.....that's not really Air Canada's fault.

You told your friends they were nuts to stay at mainline? They are the ones with the jobs today, not AVEOS.

You are kinda right that they had the option. The option to go to AVEOS for lower pay. Hence the senior guys stayed and the juniors positions were forced to go.

[habs.fan]

I have a few stupid questions, I don't know the situation all that well but would like to understand:

1 - Did Aveos have a guarantee of 'x' years of 'y' hours of heavy maintenance work from AC when they were spun off (at a decided upon price in line with my question 3)? Or was AC going to use them as a pay-as-you-go separate entity just like they would use MRO ABC?

2 - Did Aveos have the ability to use the resources given to them as a part of this spinoff deal (tugs, tooling, tarmac, etc.) to go out and get other business (from WS, AT, any other carriers)?

3 - Was a part of the spin-off deal that the employees of the newly created company necessarily retain the same wages and benefits as they had at AC?

[boeingboy]

You told your friends they were nuts to stay at mainline? They are the ones with the jobs today, not AVEOS.

No - We were talking about AVEOS. (sorry - when I said stay - I meant stay with the heavy maint side.)

I told them they were nuts to go to AVEOS. Most of them were so excited to go to Aveos....they couldn't grasp the bigger picture. Then when it collapsed - they all stood around dumbfounded saying "what happened" Only afterword's the light bulb came on and they said they should have listened to me.

Nobody was forced to do anything, most guys didn't want to go to mainline because they would end up being xfered back east and they wanted to stay here.

[boeingboy]

1 - Did Aveos have a guarantee of 'x' years of 'y' hours of heavy maintenance work from AC when they were spun off (at a decided upon price in line with my question 3)? Or was AC going to use them as a pay-as-you-go separate entity just like they would use MRO ABC?

I believe they did have an initial contract for a short term - just like any other company. There was no guarantee of renewing.

Did Aveos have the ability to use the resources given to them as a part of this spinoff deal (tugs, tooling, tarmac, etc.) to go out and get other business (from WS, AT, any other carriers)?

Yes. When they took over the heavy side of ACTS - they got everything.....hangers, docks, stands, tooling, tugs, the works. You should have seen the stuff sold for pennies at the liquidators sale.

Was a part of the spin-off deal that the employees of the newly created company necessarily retain the same wages and benefits as they had at AC?

No - Not for the most part anyway, they may have kept some flight benefits, but it was a separate private company. Not bound to anything at ac.

[yycflyguy]

You told your friends they were nuts to stay at mainline? They are the ones with the jobs today, not AVEOS.

No - We were talking about AVEOS. (sorry - when I said stay - I meant stay with the heavy maint side.)

I told them they were nuts to go to AVEOS. Most of them were so excited to go to Aveos....they couldn't grasp the bigger picture. Then when it collapsed - they all stood around dumbfounded saying "what happened" Only afterword's the light bulb came on and they said they should have listened to me.

Nobody was forced to do anything, most guys didn't want to go to mainline because they would end up being xfered back east and they wanted to stay here.

I see you are YVR based? Perhaps the sentiment was different for the YVR guys, as you said, they didn't want to be xfered back East. Guys from the West Coast NEVER want to go to the centre of the universe. During that time I was based in YYZ and everybody at the YYZ base said the same thing. They did NOT want to go to AVEOS. Those that did, were forced.

Hindsight is always 20/20.

rouge employees need to know the similarities between AVEOS and rouge. With a separate OC they are NOT necessarily entitled a position at AC mainline in the event of divestiture, sale or insolvency.

[Cod Father]

Air Canada had a very simple plan to increase its profits.

Step 1: Spin the airline’s heavy maintenance unit off as a separate entity

OK, sounds good, like this, section off the business, concentrate on your core operating and farm out the rest

Step 2: Starve the spin-off of work and bankrupt it

um, if the spin off can not provide competitive prices for products and services, why would you buy from them?

Step 3: Outsource the operations to an Israeli military drone manufacturing company wholly owned by the government of Israel.

Capital is global and mobile. Must of thought they could do the same job as AVEOS for a lower price. The Air Canada shareholders (I hope you are one) rejoice!

Air Canada spun off its in-house maintenance, repair and overhaul (MRO) unit Air Canada Technical Services as a separate company, AVEOS, in 2007, four years after the national carrier entered into bankruptcy protection.

besides Air Canada, who else did AVEOS go after for contracts after being spun off? No one?! pfff no one they failed.

In 2011, many Air Canada workers were transferred against their will to AVEOS, despite a legal challenge by International Association of Machinists and Aerospace Workers to prevent this transfer.

Now things are getting interesting. If they were transfered to AVEOS, that would mean those workers were always AVEOS since 2007. Something smells here.

Slowly, but surely, Air Canada started taking work away from AVEOS, and sending it abroad, First it was to Germanythen to China. As Air Canada accounted for 90% of AVEOS’s business, Air Canada’s actions hit the maintenance company hard, and AVEOS was forced to file for bankruptcy in March 2012 leave 2,600 employees jobless.

Very very sad that all those people lost their jobs. But AVEOS management had a choice, they could have gone after more work on the global stage or cut costs. Could it be AVEOS has been the problem in Air Canada all this time keeping the carrier from making money for the shareholders?

more to come.

[Cod Father]

Air Canada CEO Calin Rovinescu, who raked in $9.5 million the same year, justified Air Canada’s actions by placing the blame squarely on AVEOS for not being “cost competitive”.

Calin's salary seems a bt excessive, but I like the cut of his jibb. AVEOS not cost competitive.

The Attorney General of Canada filed a law suit against Air Canada for breaching the Air Canada Public Participation Act which reads:

6. (1) The articles of continuance of the Corporation shall contain
…
(d) provisions requiring the Corporation to maintain operational and overhaul centres in the City of Winnipeg, the Montreal Urban Community and the City of Mississauga;

If I were the Minister of Transportation, I would have section 6(1)(d) stripped from that law. Air Canada can damn well put operational and overhaul centres where ever they like

In February 2013, the Quebec Superior Court issued a 139-page ruling finding Air Canada guilty of violating the Air Canada Public Participation Act.

“The court concludes that Air Canada doesn’t respect the law put in place when it privatized in 1988,” Justice Martin Castonguay wrote.

Georges Bujold, general chairman, eastern region, for the International Association of Machinists and Aerospace Workers warned the workers not to have too high expectations about getting their jobs back anytime soon, as he expected Air Canada to drag this all the way to the
the Supreme Court, and a final ruling won’t be made for years.

Bujold’s prediction came true in the form of a terse email from Air Canada: “Air Canada will be appealing this Quebec Superior Court decision, given the importance of the matter, and makes no further comment at this time.”

So far looks pretty cut and dry, the players are lining up to do what they do.

Even if the Supreme Court rules in the Canadian workers’ favour, Bujold fears that the Harper government will simply pass legislation to overturn the decision.

“We never know with the Tories what position they would take but it wouldn’t surprise the IAM that Air Canada would make that request to the prime minister or the minister of transport to revisit the Air Canada Act and make those modifications,” Bujold said.

typical union bashing typical free-market gov't, next!

In January 2014, the Air Canada CEO accompanied Stephen Harper on the Prime Minister’s official visit to Isreal. A year later, Air Canada signed a maintenance deal with Israel Aerospace Industries, a company wholly owned by the government of Isreal, and considered to be a pioneer of drone technology.

That's cool.

Senate Judiciary Committee – Subcommittee on Constitution, Civil Rights and Human Rights heard from journalist and author Peter Bergen that “Israel is the world’s largest exporter of drones and drone technology, and the state-owned Israeli Aerospace Industries (IAI) has sold to countries as varied as Nigeria, Russia and Mexico. IAI has also reportedly sold a ‘loitering weapon’ called the Harop to India, Turkey, France, and Germany.”

Interesting, but not sure what it is doing here.

Meanwhile, it has been turbulent time for many of the 2,600 workers who lost their jobs and had to wait almost two years to hear any news of their severance pay or pensions. Some workers are hopeful that Air Canada will drop its appeal and bring maintenance jobs back to Canada. Many others, however, are not holding their breath.

While the transfer of jobs is suspicious, and severance pay and pensions are very much at issue in the courts, and I wish them well, the maintenance jobs are not coming back any time soon.