American Airlines mechanics union voting on 'final best' offer
Before the clock strikes midnight Monday, American Airlines mechanics and related work groups will cast ballots that could decide their future, the shape of American's Tulsa maintenance base and the fate of the airline itself, industry officials say.
The voting on whether to accept or reject American's "final best" contract offer to 24,000 members of the Transport Workers Union could be close, union members say.
"American has never been in bankruptcy, and this is new territory for the TWU," said Del Cotton, a machinist at the Tulsa base. "Sentiment? I don't know. ... Fifty/fifty would be accurate."
On the surface, a "yes" vote would seem to be a lock: acceptance of 7.5 percent wage increases over the six-year contract, fewer job cuts, reduced aircraft maintenance outsourcing, early-retirement incentives and other benefits.
The alternative is voting down the company's "final best" offer, after which American will argue in bankruptcy court for rejecting the TWU collective bargaining agreement, AA executives said.
If the bankruptcy judge grants American's motion to reject the collective bargaining agreement, it would clear the way for American to impose its more drastic March 22 "term sheet."
The term sheet calls for 13,000 job cuts, including up to 2,600 in Tulsa, outsourcing of up to 40 percent of aircraft maintenance now performed in house, and changes in work rules and job classifications leading to $1.25 billion a year in labor cost savings.
An easy choice, yes?
Not necessarily.
Simmering below the surface of the debate -- and sometimes erupting into anger -- are memories of 2003 and the last nine years, workers say.
In 2003, with the airline industry in free fall from 9/11 and the slump in travel, American's unionized mechanics, pilots and flight attendants agreed to $1.62 billion in wage and benefit concessions to help American avert bankruptcy.
"Pull together, win together," American executives said. "Shared sacrifices, shared rewards."
The unions shared the sacrifices, TWU members say, while the executives shared the rewards -- hundreds of millions of dollars in bonuses.
Meanwhile, the company cratered to more than $10 billion in losses, ending in its bankruptcy filing Nov. 29.
"American management takes no ownership of the fact they screwed this up tremendously," said Steve Gukelberger, chairman of the stores negotiating committee at TWU Local 562 at JFK Airport in New York. "The company is taking advantage of the (bankruptcy) situation and running with it. But what's going to be left? People are at wit's end."
At this point, some TWU leaders and members believe they have to take a stand against the company and its final offer.
Gary Peterson, president of TWU Local 565 at Dallas/Fort Worth International Airport, said acceptance of American's final offer would leave American mechanics eighth out of eight major U.S. airlines for wages and benefits -- 25 percent below Southwest Airlines in pay alone.
"American Airlines AMTs (aircraft maintenance technicians) are the lowest paid in the industry, and if the final offer is ratified, they will be for another six years," Peterson said. "There is no mention of dignity or respect in AA's final offer, or what I would call 'the plan for demoralizing and wreaking six more years of havoc on employees' lives.' "
Some TWU leaders and members believe a "no" vote would lead to further negotiations that would result in mechanics winning many of the benefits of the "final best" offer or the term sheets.
But that is a false promise, said American executives and John Hewitt, TWU negotiator and chairman of maintenance at Local 514 in Tulsa.
Laura Einspanier, American's vice president of employee relations, said there have been "misstatements" about the March 22 term sheets made on various Internet blogs, YouTube videos and other material produced by TWU locals.
"They paint a very inaccurate picture of what will happen if the company (final offer) proposals are not ratified and the court rejects the current collective bargaining agreements," Einspanier said last week in a letter to TWU International President James Little. "Any provision in the March term sheet that was dependent on a ratified consensual agreement will not be implemented without the ratification of the consensual agreement."
Among the term sheet items that are available to TWU members only if the "final best" contract offer is ratified are:
--1.5 percent wage increases each of the last five years of the contract.
--Early retirement incentive allowance.
Workers 45 years old with at least 15 years at American are eligible for 13 weeks of severance pay and, depending on the year of hire, another $12,500.
--Company retiree medical prefunding refund.
American is ending its retiree medical plan. A "yes" vote will return an employee's contribution, plus interest, plus American's match.
--401(k) match up to 5.5 percent.
American is freezing TWU pensions, replacing them with 401(k) plans with American matching up to 5.5 percent of employee contributions.
--First-dollar profit-sharing plan.
TWU members will receive 15 percent of the company's profits after the first dollar.
--Gain sharing proposal.
American will distribute monetary rewards for meeting production, training levels and other performance goals at line maintenance and overhaul bases.
"A lot of misinformation has been put out" about the final offer and term sheet process, Hewitt said.
"Some of it has been put out by other locals that have a different agenda than Tulsa," Hewitt said. "They believe that the more jobs that go away in Tulsa will drive up wages in high cost-of-living areas."
Different strokes for different folks, TWU members say.
"It's so close as to which way it will go," said Louis King, executive board member at Local 514 and a stock clerk at American. "I don't tell anybody how to vote -- just vote what's best for you and your family."
Voting by telephone and internet balloting ends at 11:59 p.m. Monday.
Ballots will be tabulated by BallotPoint Election Services, which is expected to have the results Tuesday, TWU officials said.
D.R. Stewart 918-581-8451
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