It was Friday, Nov 22nd, the last payday of the month before rent was due. Most of the CFIs, including myself, are on direct deposit. I woke up that morning expecting to find my paycheck in my account, but it wasn't there. I wasn't too surprised by it becasue the same thing had happened two weeks before when the company decided to change payroll companies and they ended up giving us paper checks around midnight that day (only about 7 hours late...) I went to work expecting to find my paycheck at the dispatch office. Arriving at work, I found many of my co-workers pacing the hallways... the paychecks hadn't arrived. Needless to say, the atmosphere amongst all the employees that day was less than positive. In order for you to understand the rest of this story, you'll need a little run-down of the weeks prior.
We were advised that there would be pay cuts, but we weren't told how much, or when they would go into effect. The fully rated CFIs were earning $20 an hour, the CFIIs were earning $17, and the CFIs were getting $16. When the next pay period began, we recieved no notification that our reduced pay rate was in effect and we all continued working under the understanding that we were earning our normal wages. No one knew that the reduced rates were $15, $14, and $12 for MEI/CFIIs, CFIIs, and CFIs respectively until we were a week into the pay period where they had already taken effect. The mechanics' wages had been similarly reduced- some of them cut up to 33%... all without noticifation. One of the employees went into the VPs office and voiced her opinion, albeit unprofessionally, and was fired on the spot... she got a lawyer and is suing the school for a half million, last I heard.
Naturally, slashing wages has ill effects on the enthusiasm of your employees. The maintenance department immediately slowed down because A&Ps left the company in droves. Airplanes started to drop off-line because they reached their scheduled inspections and could not be serviced quickly enough to keep them flying. Soon, all of the multi-engine airplanes were offline, all of the Cessna 172s went down, and only a handful of Cessna 152s remained for private pilot instruction. I frantically tried to find ways to keep my students progressing, but with no airplanes, I was helpless. I had to cancel numerous flights, as did most of my colleagues. No flights=no pay.
By the time november 22nd rolled around, our fleet of 50+ airplanes was non-existent, they were all uselessly tied town to the ramp awaiting 50- and 100-hour inspections that would never come. By 2pm the paychecks still were no where in sight. The crowd of anxious, perturbed CFIs, mechanics, and office clerks gradually grew as more and more came into the building seeking their wages only to meet disappointment. The dispatchers said that they had been taking calls all morning from creditors across the nation seeking dues that we never knew that our school owed. Around 3pm, the airport management came into our wing of the terminal building and changed out all the locks on the academy's doors. Talk about a big red flag! A call came from corporate. They called an emergency meeting for 5pm and requested the presence of all employees. This was it, we all thought. We are all out of a job.
During the tense hours that passed as 5pm crept nearer, we passed the time exchanging phone numbers, filling out applications to other flight schools, talking about what went wrong, what we were going to do if who said what during the meeting, etc. Five oclock came and went. If they were going to lay us all off, they could at least do it on time.
Finally, the VP and the CFO walked into the building carrying a large stack of envelopes and paper. The VP stood before us with the CFO at his side, asked for our attention, and began reading from a prepared statement. In the statement, he explained that our school was $800,000 in debt and that we could not continue operations until we recieved the next payment from our chinese clients expected on December 1st. He declared the flight school closed until then, with a disclaimer that our return-to-work date could be even later than that. After finishing, he opened up for questions. The first question: What about our paychecks? He explained that we would leave the meeting with paychecks, but they would be for a greatly reduced rate. With that, the CFO began calling out our names one by one to come forward and take our pay. This was when things got really ugly. We opened up our checks and found that for our last pay period, our pay had been adjusted to roughly minimum wage. I was expecting around $1,000, but opened the envelope and found a sickly $348 check inside. The room exploded with protests and profanities. People demanded to know why the CEO was absent to tell us this for himself, whether we would be paid the remainder at a later date, and so on. No satisfactory answer was given for any of our questions. We were already into the middle of the next pay period, and that week would go completely unpaid.
I suddenly found myself without the money to pay for next month's rent. I had to call the folks for help just to make it through. My wife and I decided to try to make the best of it and just call it an extended vacation for thanksgiving. We drove up to her family's house where we are still to this day, Dec 16th awaiting the date that I can return to work. I never thought that I would be furloughed as a CFI... I always thought that situations like these were for airline pilots. I filed for unemployment, but great was my surprise when I discovered that the academy had never payed into our unemployment benefits.
A word from experience for all you CFIs out there. Build up a healthy savings account. Store up some food. Keep some "get out of dodge" cash tucked away at home to prepare for times like these.
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