Sep. 19--American Airlines' management and its unionized aircraft mechanics have begun discussions aimed at rewarding mechanics with "nontraditional" compensation in a cost-conscious industry.
The talks, which began Monday at American union locals around the country, including Transport Workers Union Local 514 in Tulsa, could head off divisive negotiations on a new contract and allow mechanics to share in American's recent profitability, officials said.
The seeds of the alternative compensation discussions were planted a month ago when TWU International President James C. Little wrote American Chairman, President and CEO Gerard Arpey about low morale among mechanics.
Since American's mechanics agreed to a 25 percent annual cut in wages and benefits in 2003 to avert a bankruptcy filing by American, the company has become profitable while management has taken more than $160 million in bonuses.
In 2003, the TWU agreed to $620 million a year in wage and benefit cuts. American's Allied Pilots Association took cuts of $660 million annually, and the Association of Professional Flight Attendants
agreed to cuts of $340 million a year.
American employs about 6,000 aircraft mechanics at the Tulsa Maintenance & Engineering Center, the company's largest maintenance base.
"Over the last several weeks I have had an opportunity to attend various events within the AA system at JFK (International Airport in New York), TUL (Tulsa) and ORD (Chicago O'Hare International Airport)," Little wrote. "The tone I heard in those discussions was very disturbing and prompted me to write to you directly.
"As International president, I am very concerned that all of the joint efforts we have undertaken (from 2004-2007) are beginning to wane, and that is putting it mildly. I attribute this erosion to American Airlines' failure to reward our members (your employees) for their efforts and successes in working together to bring about a positive turnaround through direct productivity initiatives and revenue gains."
Little wrote that as the company and the TWU negotiate a new contract before the April expiration date, it is Little's "belief that we have to explore the possibility of doing something tangible now. Therefore, I urge you to . . . recognize that we need to find nontraditional methods for encouraging our joint efforts through revenue sharing that is directly associated with each of the respective work forces."
A week after Little's letter was sent, Arpey replied, "We are interested in exploring nontraditional methods for encouraging joint work while creating a competitive cost structure and rewarding environment for your members."
The mood among American's mechanics darkened in April when American managers took stock-based bonuses totaling more than $160 million. In 2006, American parent, AMR Corp., reported a $231 million profit, its first since 2000.
"We have sacrificed a lot, improved their bottom line and we expect to improve our situation," Mike McDonald, former TWU Local 514 president, said in June. "We want to get back everything we have lost and then some."
Neither McDonald, now the union vice president, nor Local 514 President Steve Luis could be reached for comment Tuesday.
American executives would not elaborate on the scope nor the time frame of the compensation meetings.
"American Airlines and the TWU have agreed to a series of facilitated meetings over the next couple of weeks to discuss a limited number of issues," Mark Burdette, American's vice president of employee relations, said in a prepared statement.
"We view these meetings as a continuation of the collaborative efforts between the company and TWU."
Sep. 18--American Airlines has offered an unusual deal to its mechanics and ground workers that would extend their contract with pay increases that are tied to company performance. If union...
Line mechanics said they are struggling to pay their bills after 2003 wage and benefit concessions that took a bigger bite out of their standard of living than those imposed on mechanics in Tulsa.
12,000 mechanics and technical specialists join other TWU members at AMR along with pilots and flight attendants in federal mediation.
American Airlines is betting its future on cooperation between management and labor. But it remains unclear whether the airline can overcome decades of labor-management strife.