AMR Presents 'Last Offer'

May 01-- Members of bankrupt American Airlines' Transport Workers Union are reviewing terms of the company's "final best" contract offer, which proposes 7.5 percent wage increases over six years and fewer layoffs than originally stipulated, union officials said Tuesday.

More than 24,000 members of the TWU will vote to accept or reject the contract offer within the next two weeks, TWU executives said.

Among the prominent issues covered by American's final contract offer are: -- 1.5 percent wage increases for all TWU work classifications 12 months from the date of signing of the contract.

-- 1.5 percent wage increases 24 months from date of signing.

-- 1.5 percent wage increases 36 months from date of signing.

-- 1.5 percent wage increases 48 months from date of signing.

-- 1.5 percent wage increases 60 months from date of signing.

In addition, American final contract offer includes a series of job outsourcings, eliminations and reclassifications.

The final offer, however, proposes outsourcing less than the 40 percent of heavy maintenance the company said was necessary in February.

American proposes "to permit outsourcing of up to 35 percent of aircraft-related maintenance work currently done in house, measured in man-hours...." American said in its "final best offer." "(H)owever other work my be contracted out in the future so long as the 35 percent is not exceeded."

The company still plans to close its Fort Worth Alliance Airport Maintenance Base, at the cost of 1,200 jobs, and that work will be shifted to the Tulsa Maintenance & Engineering Center or Dallas/Fort Worth International Airport, American's offer said. But the total job losses under American's last offer -- originally proposed to be 13,000 in February -- is unclear, TWU officials said.

The company's February proposal included layoffs of 2,100 mechanics out of 5,600 mechanics employed at the Tulsa M&E base and layoffs of 8,500 mechanics companywide.

"That has been reduced significantly," said Rick Mullings, spokesman for TWU Local 514 in Tulsa. "I could tell you a number but it would never be close because there are so many conditions attached." The conditions that will affect the number of job cuts in Tulsa include seniority bumping rights of mechanics working at Alliance and other maintenance bases, changes of job classifications in Tulsa and early retirements of mechancs and related work groups, officials said.

American's final offer includes changes to work rules to permit management to establish work week, work cycles and frequency of shift bids, including implementing work schedules that "include Saturdays and Sundays without restriction," as well as eliminating all limitations on holiday work.

Maximum vacations earned by employees are reduced to 25 days from 30 days, the company's final offer says.

In a letter to union members, TWU International President James C. Little said the company's offer is a separate issue from a proposed contract agreement with US Airways, which seeks a merger with American.

"This vote has nothing to do with a possible US Airways merger," Little said, "and even a yes vote will not prevent the possible US Airways merger. The issues are legally unrelated. This vote is only about what conditions we will work under at AA (American Airlines), as there is no certainty a merger will take place."

American's "final best" offer also will not affect the Section 1113 bankruptcy court hearing in which American's lawyers are proposing that U.S. Bankruptcy Judge Sean Lane reject the company's collective bargaining agreements with its unionized TWU mechanics, Allied Pilots Association and Association of Professional Flight Attendants, Little said.

"The bankruptcy judge does not decide what the terms of our contract will be," Little said. "If he rejects our contract, we will have no contract. The judge does not pick and choose between the terms proposed by American or otherwise rewrite its proposal -- he will either grant AA's motion to reject it or deny it."

The Section 1113 hearing was adjourned Friday for two weeks while labor and management representatives continued negotiations on restructured labor contracts. The hearing will re-convene on May 14 when the unions will present their arguments against rejection of the collective bargaining agreements.

Tempe, Ariz.-based US Airways, the nation's fifth-largest airline, has proposed a merger with American before it completes the bankruptcy reorganization process. Under the US Airways scenario, only 450 mechanics jobs would be cut at the M&E base in Tulsa, no maintenance bases would be closed and no aircraft retired, company executives said.

US Airways executives said they would grant two-year furlough protection to the 4,500 workers who would remain in Tulsa after a merger.

Companywide, a merger between US Airways and American would eliminate the positions of about 4,900 mechanics, baggage handlers and other airport ground workers, US Airways and TWU officials said.

US Airways hasn't made an offer for AMR, but it has reached contract agreements with American's unionized mechanics, pilots and flight attendants in the event that a merger become effective, officials said.

American Chairman and CEO Thomas Horton said the company intends to remain a stand-alone company until it emerges from bankruptcy.

AMR filed for bankruptcy on Nov. 29 after more than $10 billion in losses over the previous decade.