American Airlines' much-heralded cooperation between labor and management is quickly deteriorating amid an ongoing furor over a slate of management bonuses, union officials said Friday.
Board members of American's pilots union met with Gerard Arpey, the airline's chief executive, Friday morning, and warned him that the company's labor relations have soured substantially since the bonuses were detailed this month.
"For two years, we've worked to have a new relationship with management, then this came along, and it seems like everything has been undone," said Sam Mayer, president of the New York chapter of the Allied Pilots Association. "People are walking around muttering, 'They fooled us again.'"
Pilots officials told Arpey that the bonus plan jeopardizes cooperative efforts between management and the union. Mayer said Arpey seemed taken aback at how emotional the issue has become.
"We conveyed to him just how passionately our membership feels about this," Mayer said.
American officials declined to comment at length on the discussion Friday.
"We met with them this morning and listened to their concerns," said Lisa Bailey, a spokeswoman.
Arpey has made improving labor relations a centerpiece of his plan to turn around the struggling airline. Two years ago, the airline hired a consulting firm to help it craft a program that brought managers and rank-and-file employees together to develop strategies about how to save money, boost revenues and improve efficiency.
Dubbed "Pull Together -- Win Together," those joint efforts have resulted in millions of dollars in savings for American. The airline has been lauded by Wall Street for its rosy labor relations, while workers at other carriers, like Northwest Airlines, have been threatening to strike.
Late last year, American's pilots voluntarily agreed to consider altering work rules to make pilots more productive, even though it could result in pilots flying more hours and slow career advancement.
But the spirit of cooperation was shattered when Jeff Brundage, the airline's head of human resources, sent a letter to employees Jan. 5, letting them know that a performance bonus plan for about 1,000 managers and executives would pay off this spring, based on a run-up in parent company AMR Corp.'s stock price last year. Arpey is not participating in the program.
The total payout will depend on the stock's price April 19. If valued today, managers would receive bonuses totaling more than $70 million.
AMR disclosed the program to union officials two years ago and has outlined it in several filings with the Securities and Exchange Commission. Still, the size of the bonuses took many employees by surprise.
Earlier this week, Arpey defended the bonuses during a conference call with industry analysts and reporters. He said they stemmed from the company's philosophy that high-level managers should be compensated in part based on how the airline's stock performs.
Monday, the Dallas/Fort Worth chapter of the pilots union passed a resolution condemning the bonuses and barred management employees from attending union meetings until May.
The resolution evoked the memory of Don Carty, American's former chief executive, who was forced out in 2003 when a lucrative package of executive bonuses was disclosed just after employees had approved $1.6 billion in annual wage and benefit cuts. Arpey succeeded Carty in the top job at American and AMR.
"Management has once again shown their Don Carty-ish desire to protect and increase their income through the [performance] bonus program," the resolution stated. "Management had distorted the original intent of 'Pull Together -- Win Together' into 'You Pull -- We Win.'"
The Association of Professional Flight Attendants, which represents American's flight attendants, has also canceled a series of meetings with management that were intended to brief employees on efforts to improve productivity.
The Transport Workers Union, which represents mechanics and ground workers, has also condemned the bonuses.
A Jan. 12 meeting between Arpey and the presidents of American's three unions was "heated," according to a message to pilots from Ralph Hunter, president of the Allied Pilots Association. He also took issue with Brundage's assertion that union leaders had been informed about the bonus plan in 2003.
News stories provided by third parties are not edited by "Site Publication" staff. For suggestions and comments, please click the Contact link at the bottom of this page.
