Victor Li will not back AC

[ptbodale]

Victor Li has pulled his offer of $650 million for Air Canada after the Unions refused to knuckle under and change their pension plans. AC is free to look for other investors.

Mr Li wanted the plans changed from "direct benefit" to direct contribution". This would cut the AC shortage in the pension fund by $400 million dollars.

One Union, the IAM (groundworkers and MTC) had agreed to allow employees to choose which plan they wanted (many want the direct contribution). The U.S. parent of the IAM has suspended the head of Canadian division for making the deal (U.S. interference).

We will have to wait and see what happens.

[djarfur]

ouch...

[Noise]

DAMN!

[CathayPacific]

I think there is a separation fee that AC has to pay Trinity if the deal breaks down? And what about that ERJ and CRJ order that AC has made? And the A340-500s?

If he is serious about investing in aviation in Canada, he should now put that $650 million out now to open a new airline in Canada to compete with AC. That way, he can start clean and forget about all those union things. Planes are cheap lately anyway. With Li's financial backing and background (Li's father has an estimated assets of US$10 billion), he can easily get favorable deals from banks, plane manufacturers or leasers. As a Canadian citizen, he can start his own airline in Canada any time.

[YYG]

Are there any other perspective investors willing to put money in AC?

[ptbodale]

Not without concessions from the Unions especially over pensions.

The majority of the huge loss was due to restructuring and that was the severance paid to the departing employees. Lawa in Canada say that employees being severed are entitled to 2 weeks serverance per year of work to a maximum of 26 weeks. In many cases AC offered morethan that to entice people to leave.

The Union's position that they would rather see the airline die than give in (it would be a precedence for future bankruptcies) is lunacy. Put 30 odd thousand people out of work to prove a point.

And for those that say let it die, would you tell your father, your mother, your brother of sister or a friend that you are glad they are out of a job just because in your little mind you don't like the way their company is run! Think about it.

[Cam]

And for those that say let it die, would you tell your father, your mother, your brother of sister or a friend that you are glad they are out of a job just because in your little mind you don't like the way their company is run! Think about it.

Well, it's going to die. I would tell them that it would be for the better. As stated in another thread, someone will buy the assets and begin from scratch. Look at the airline now! they are a disgrace of a company, sorry if you have family that work at AC, but when you loose over a billion dollars a year, you aren't going anywhere...they are just accumulating debt and diggin a deeper hole.

Liquidate and restart...

[ptbodale]

No Cameron I work at Air Canada.

None of the employees deserve this. The Liberal government is to blame for their behind the scenes dealing with Gerry Swartz (spelt that wrong I think) and the governments subsequent restrictions they placed on AC. When cP and AC merged AC had about 12000 too many employees and the Liberals told AC to keep everyone for 2 years.

AC's executive is to blame too. There is no doubt they were trying to keep their jobs and perks and a made some poor decisions. But whether it is AC or US or UA or SR or even the people who make the "Little Red Wagon" nobody needs to be dumped on the street.