Past TWU Concessions Concern AA Employees

American Airlines remains the only major U.S. air carrier never to have filed for bankruptcy.

In the view of American executives and the leadership of the 18,661-member Transport Workers Union, which represents its unionized mechanics, the airline also is pioneering a new model in labor-management relations.

It has been three years since the TWU agreed to wage and benefit concessions of $620 million a year over five years to avert a bankruptcy filing by American. Mechanics and American management are working together to cut costs and streamline operations.

At a time when its major competitors are in bankruptcy or outsourcing aircraft maintenance, American is soliciting third-party aircraft overhaul work. The company is seeking to turn its maintenance bases in Tulsa, Kansas City, Mo., and Fort Worth into profit centers.

Fuel prices remain high. The company has posted only two profitable quarters in the last three years.

American executives and TWU leaders, however, believe the airline's financial health is improving, and they are optimistic about the future.

But based on interviews and e-mail communications with several union members, the TWU remains deeply divided over the 2003 concessions and whether their union has been co-opted by management.

Dennis Burchette, president of TWU Local 514 in Tulsa, said he senses an improved outlook in many mechanics. Local 514 represents more than 6,000 mechanics at American's Maintenance & Engineering Center at Tulsa International Airport.

"There is definitely a change in mood -- not just in our membership but in all American employees who are starting to see some hope," Burchette said. "In 2003 and 2004 we didn't know if we were going to make it. Delta (Air Lines) was a hell of an airline -- look what happened to them. Northwest Airlines was a hell of an airline -- look what happened to them.

"Now people have hope. We have an obvious direction here in Tulsa. The company has posted a couple of profitable quarters. We have some money in the bank. You see people working together now. We're starting to work together as a team."

Some TWU members, among them line station mechanics in Dallas, San Diego, New York and other high-cost cities, say their union fails to represent their interests and has become too close with management.

Burchette said his critics aren't realistic.

"The proof is in the pudding: They still have jobs to go to every day," Burchette said. "They have a paycheck coming in. The company is still here. There are a lot of people in our industry who don't have jobs as a result of the traditional head-banging with management.

"We want the company to do well, and when the company does well, we'll do well also. It's that simple. We're doing all we can to make this company healthy. The $620 million a year the TWU gave up made the difference between bankruptcy and not being in bankruptcy."

The $620 million a year in wage and benefit concessions agreed to by the TWU was part of $1.8 billion a year in concessions agreed to by American's unionized mechanics, pilots and flight attendants. The Airline Pilots Association agreed to cuts of $660 million a year; the Association of Professional Flight Attendants gave up $340 million a year in pay and benefits.

The concessions are equivalent to a 25 percent pay and benefit cut per mechanic, officials said.

Did the TWU give up too much?

"The obvious answer, for a traditional labor leader, is to say, 'Yes,' " Burchette said. "Have we made sacrifices to save the company? There is no doubt. But I wasn't there (as president of Local 514) when those concession agreements were made in 2003, and I'm not going to armchair quarterback them. They had to do what they had to do.

"It was the most prudent thing to do. We're still here. The Northwest, United and Delta mechanics' ranks have been devastated. Quite frankly, our people had a voice in what happened, and the majority chose this route."

But TWU critics, who include supporters of the Aircraft Mechanics Fraternal Association, said Burchette and the TWU leadership are out of touch with union members.

In a membership drive two years ago, AMFA signed up 9,274 American mechanics, 57 authorization cards short of the 9,331 needed to hold a union representation election.

"AMFA is not the major issue. The major issue is the labor movement itself," said Chuck Schalk, an American mechanic at John F. Kennedy International Airport in New York and a member of TWU Local 562.

"The TWU said we should vote for the concessions because we didn't want to go into bankruptcy. But with the concessions, we fulfilled most of the bankruptcy plan anyway. I voted against the concessions without any snap-back clauses (wage restorations if American's finances improve).

"American made a lot of poor decisions: buying TWA (for $4.2 billion in 2001), selling their fuel hedging positions, not changing their business plan after 9/11 and losing $1.8 billion.

"Labor is continually getting the blame for things that are not our fault. I'm all for saving jobs, but at what point do we stop giving?"

Ken MacTiernan, an American mechanic in San Diego, said he is an AMFA supporter because the TWU has become "bloated and out of touch with the membership."

"We still have jobs, but at what cost?" MacTiernan said. "We can't live outside of Tulsa on the money we're making. AMFA supporters are not the enemy. They're people who want to bring accountability back to organized labor. AMFA is democratic. They recall people if they don't pull their weight.

"American mechanics are worth more than they're making. We gave concessions, and management took millions of dollars in bonuses."

Bob Owens, an American mechanic at JFK in New York, takes issue with Burchette's comment that TWU members still have jobs.

"So do workers at Wal-Mart," Owens said. "Is Mr. Burchette implying that employment under any circumstances is acceptable? We fork over $500 a year to a union that uses the same arguments to justify their incompetence that the companies use to argue against organizing.

"The facts are that Southwest Airlines is still here -- even United Airlines, Delta, USAir and Northwest Airlines are all still here. Mechanics at Southwest, doing the same thing we do, earn much more than we do.

"Lower wages, less benefits and no voice within autocratic, unaccountable organizations that cozy up to management are going to destroy what is left of organized labor."

Burchette, 47, who is in his third term as president of Local 514, is familiar with these sentiments. But times have changed, he said, and American Airlines' survival is dependent on labor and management working together instead of being confrontational.

"Over the last 20 years, all we have seen is organized labor's numbers decline," Burchette said. "Labor can be an asset for the company rather than a cost. Organized labor, if it is to survive, must change its traditional model, which means the companies we deal with also have to change.

"If this model succeeds, I hope it spreads because this model is a lot better -- it's harder -- but it's a lot better for workers and the company. If we kept going at the company in a confrontational manner, there's no doubt we would lose and the company would lose.

"There are both management and union people trying to break this cycle. And it's not because we want to make new friends. It's strictly economic."



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