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If you’re wondering, the honeymoon lasted about four months:
Those loans require us to pay the banks’ interest quarterly, and to improve our performance annually to a level that assures the banks that we will be able to pay back the principal on our loans. Based on our current 2006 projections, we will meet our interest obligations for 2006, but will fall short of the performance expectation. Without immediate and dramatic changes to the business, in 2007 we will not only miss our performance requirement, but we will also not have enough cash to make our interest payments. [...]
If we are going to survive and grow, we need to significantly restructure our labor contracts and our workforce. We have been working with our labor unions to reach a deal by October 31. We have reached agreements and made significant headway with some unions, but are very far apart with some others. We need to reach agreements that allow us to achieve the savings to meet our loan obligations, and to reinvest in and to grow our business. However, even with those savings, some layoffs are unavoidable. We must reduce our workforce so that it is in line with our reduced revenue. To the extent we don’t get the savings, those layoffs will be larger.
If you’re wondering what that last sentence means, it’s sort of like this: If you union guys don’t let us do what we want, we’re gonna lay off even more people! Ha ha ha ha ha!
Full memo sent to employees after the jump.
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