American Nixes Union Renegotiation Effort
By DAVID KOENIG 04/08/2003 15:58:24 EST
Labor leaders at American Airlines warn that workers could reject concessions designed to save the
world's largest carrier from bankruptcy, but the company has declined to renegotiate the deals.
Results of the voting by employees are expected by April 15, and a company spokesman said
Tuesday that American would file for bankruptcy "very soon" if any of the unions reject concessions,
which total more than $1.6 billion a year.
Leaders of unions representing pilots, flight attendants and mechanics struck last-minute deals March
31 as American executives warned that the company's lawyers were minutes from marching into
bankruptcy court.
Now, the deadline deals are running into sharp criticism, particularly from pilots in Miami, American's
third-largest base, and New York.
"If the balloting closed tonight, I'd say we're in trouble. The initial reaction has been extreme anger,"
said Sam Mayer, an airline captain who voted against the deal as a board member of the Allied Pilots
Association.
Mayer and other pilots said they acknowledged American's need to cut costs but were unhappy about
the length of the deals - six years - and what they view as an inadequate payoff if the company returns
to profitability.
Last week, officials from the pilots union, the Association of Professional Flight Attendants and the
Transport Workers Union met with American's chairman and chief executive, Donald J. Carty, to ask
that the concessions deals be limited to three years instead of six.
The company declined to comment on the meeting, but union officials say Carty flatly turned them
down and indicated he'll wait for the results of voting by union members.
"If those deals are voted down, there is no renegotiation, there is no negotiating table to return to," said
airline spokesman Bruce Hicks. "We came precipitously close to bankruptcy (last week). We must
have agreements from all three groups to continue to avoid bankruptcy."
Employees say they believe American's threat to file for bankruptcy if the concession packages are
voted down but might force the company's hand.
"Bankruptcy is not a pretty option, but it won't be a worse deal that what we're voting on now," said
Greg Shayman, a Fort Worth-based pilot and member of a group opposed to the the concessions
agreement.
The deal would result in layoffs for 2,500 of American's 12,000 pilots. Those remaining would take a
pay cut of 23 percent the first year and a slightly smaller 17 percent cut the remaining five years. They
would get stock options and small raises in later years of the contract.
Even if the unions ratify the wage and benefit cuts - part of American's plan to cut overall spending by
$4 billion a year - the company could still wind up in bankruptcy, "and then those stock options would
be worthless," Shayman said. American's parent, AMR Corp., has lost nearly $5.3 billion the last two
years.
The pilots' union has been explaining the tentative agreement to members at meetings around the
country - the reaction at a meeting of about 100 pilots Monday in New York was mostly critical.
American says the deal would cut spending on pilots by $660 million a year.
A similar deal with mechanics and other ground workers would save the company about $620 million a
year by cutting up to 1,400 jobs and slashing pay by about 16 percent. An agreement with flight
attendants would save American $340 million a year by eliminating 2,400 jobs and cutting pay by 15.6
percent.
The attendants' union plans to explain the deal to members in a Webcast on Wednesday. George
Price, a spokesman for the group, said union leaders won't try to sell the deal.
"We've tried to give them all the information they need to make a decision, and we've told them the
alternative," Price said.
Last week, the company briefed union officials on even deeper cuts that could be expected if American
files for bankruptcy protection, which Price said would be "much worse than what's in this proposal."
Still, union leaders have tried to distance themselves from the deals now being voted on.
John Ward, the president of the flight attendants' union, told members in an e-mail over the weekend
that negotiations leading up to the tentative agreement were not negotiations "in the real sense of the
word."
"The company determined the amount of cuts in flight attendant labor costs - $340 million - and it
determined how those costs would be valued," Ward said. "We are angry with the company for taking
this approach and we're sure you are as well. But we can't afford to let that anger dictate our actions."
In trading on the New York Stock Exchange, shares of AMR fell 65 cents, or 15.2 percent, to close
Tuesday at $3.63. |
