AMR Rejects Unions' Proposal For Early-Retirement Incentives

Feb. 28, 2012
American, however, is willing to consider alternative proposals that could result in fewer layoffs than the 13,000 announced Feb. 1.

Feb. 28-- American Airlines cannot offer early-retirement incentives to its unionized mechanics and flight attendants because the cost to the bankrupt company would outweigh the benefits, company executives said.

American, however, is willing to consider alternative proposals from the Transport Workers Union and the Association of Professional Flight Attendants that could result in fewer layoffs than the 4,600 mechanics and 2,300 flight attendants the company proposes to cut, officials said.

American spokesman Bruce Hicks said company negotiators "reminded the unions that we have a long-standing record of mitigating involuntary reductions through voluntary programs and remain willing to explore alternatives, at the appropriate time in this process, that don't exacerbate our cost challenges."

Hicks said time is short for management and the unions to reach consensus on layoffs and cost reductions.

American's parent, AMR Corp., filed its Chapter 11 bankruptcy reorganization petition in U.S. Bankruptcy Court for the Southern District of New York on Nov. 29.

Negotiators for American, the TWU, the APFA and the Allied Pilots Association are beginning their fourth week of restructured contract talks in Fort Worth.

On Feb. 1, American executives said the company intends to lay off 13,000 employees and cut annual expenses by $2 billion.

American proposes to close the Alliance Fort Worth maintenance base, laying off its 1,200 mechanics, and outsource up to 40 percent of aircraft maintenance, officials said.

Among the job cuts, American proposes to lay off 4,600 mechanics, including 2,100 at American's Maintenance & Engineering Center in Tulsa, 4,200 fleet service and other TWU workers, 2,300 flight attendants, 1,400 management and support staff, and 400 pilots.

The total number of jobs cut in Tulsa actually could be several hundred above the 2,100 estimate after other employee categories are trimmed, officials have said.

The company says it wants 20 percent annual cost savings from every employee group, including $210 million from mechanics and related work groups, to emerge from bankruptcy and compete successfully in the airline industry.

John Hewitt, chief of maintenance for TWU Local 514 in Tulsa, said TWU negotiators have offered management a counter proposal to the early-retirement incentives rejected by the company.

"Our intent is to put something on the table to minimize the force reduction," Hewitt said. "Hopefully, they will respond with a counter-proposal."

Hicks said American last week received initial proposals on contract items from each of the seven TWU-represented work groups -- mechanic and related, maintenance control technicians, fleet service clerks, ground school and simulator pilot instructors, dispatch, simulator technicians, and stores.

"The company is reviewing the proposals and their associated cost-saving values," Hicks said, adding that the company hoped to receive from the TWU this week additional proposals covering pension, active and retiree medical and sick leave.

"Upon receipt of the additional proposals, we will evaluate all of the proposals in aggregate to determine the next step," Hicks said. "Our challenge is clear: work quickly to restructure our contracts, achieve the targeted cost savings and begin implementing the changes so we can emerge from restructuring in the near term, or remain on our current path and jeopardize our business plan and ultimate success.

"The company continues to seek to reach consensual agreements with all of its unions and hopes that union leaders will recognize the urgency of our situation and help us quickly resolve negotiations."

Hewitt said he has reserved his hotel room in the Dallas-Fort Worth area through the week and into the weekend.

"I don't have anything to compare this to because nobody has been through this before," Hewitt said.

On Wednesday, members of the TWU and APFA are planning demonstrations protesting the proposed job cuts at Tulsa International Airport, DFW International Airport and 10 other U.S. airports.

"We're standing firm for our families and for the future," said James Little, president of TWU International. "AMR's draconian plan to offshore maintenance work and outsource other jobs is bad for American and bad for America and must be challenged."

D.R. Stewart 918-581-8451

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