Executive jobs to be cut by up to 3% Separately, American pilots picket as contract talks heat up

Dec. 3, 2007

AMR Corp. and its American Airlines Inc. unit will cut their management ranks between 2 percent and 3 percent by the end of the year, eliminating 100 to 200 positions, a company representative said Friday.

Spokesman John Hotard said the number of people laid off probably will be somewhat less than the number of jobs eliminated.

"Most departments have headcounts that they must reduce every year, but the department can choose how they do this," he said. "They may not fill vacancies when they occur, especially if they're later in the year."

Mr. Hotard said the job cuts are part of AMR's continuing efforts to reduce its costs.

"It's what we've been doing every year since 2001," he said.

AMR, which lost more than $8 billion between 2001 and 2005, posted a $231 million profit last year and has earned $573 million this year through Sept. 30. However, fuel prices have continued to rise, wiping out cost savings in other areas.

Separately, American Airlines pilots criticized the carrier's management Friday, as several hundred picketed at Dallas/Fort Worth International Airport and then took their criticism into a general employee meeting with Gerard Arpey, American's chairman and chief executive.

The pilots carried signs bearing messages such as "Management Greed Is Destroying AA" and "AMR $acrificing Customer $ervice."

The Allied Pilots Association, which represents American's pilots, is negotiating a new contract with management. As part of its demands, it has proposed raising pay rates more than 50 percent by next year, with additional raises in 2009, 2010 and 2011.

In remarks prepared for Mr. Arpey's meeting, union official Mickey Mellerski called on Mr. Arpey "to negotiate in good faith a contract that shows you truly value the professional leadership we bring to this airline every day."

"It is time to move forward to becoming a company that is first in customer service, that is first in on-time performance and that is first in employee happiness and trust," he said.

"Finally, it is time to move forward and away from being an airline primarily driven by management greed - greed that is destroying this airline," said Mr. Mellerski, chairman of the D/FW pilot base.

American executive Jeff Brundage released a statement saying the airline respected the right of employees to express their views.

"The company is focused on achieving a positive outcome for everyone through agreements that serve the long-term interests of the company, our employees and shareholders," he said.

"American remains dedicated to the collaborative processes that have benefited the airline and its employees in so many ways. We continue to believe that meaningful employee involvement and dialogue provides far more benefits than less collaborative models - and our track record proves it," said Mr. Brundage, senior vice president of human resources.