Union Launches National Ad Campaign Criticizing Management Bonuses at American Airlines

Apr. 2--The union representing thousands of American Airlines ground workers is launching an advertising and Internet campaign blasting executive bonuses and likening the airline to AIG and Merrill Lynch, two poster children for corporate greed.

The Transport Workers Union is running newspaper ads in North Texas, including in the Star-Telegram, as well as in Chicago, Miami and other major American Airlines markets. The ads will run for several weeks.

Jim Little, the union's international president, said American's executive bonuses are a slap in the face to workers who have been trying to negotiate a new contract for 18 months.

"Enough is enough," Little said. "Time and time again, when we try to solidify an agreement, the company drops the ball. And now we're faced with another round of these bonuses, and we're sick of it."

American spokeswoman Missy Latham said the company's executive compensation plan was designed to place a significant amount of management compensation at risk. Compensation packages are intended to offer median pay compared with positions inside and outside the airline industry, she said.

She also noted that the annual stock bonuses will be significantly smaller this year than in 2008.

"Performance-based compensation plans are considered good corporate governance, something that we believe in strongly," she said.

Airline officials have said that the comparison with AIG is unfair, given that American has never accepted a federal bailout.

In addition to the ads, the union launched an Internet site, www.americanexeccheck.com, where users can play a game that compares the 2007 compensation of Gerard Arpey, American's CEO, with that of executives from Southwest Airlines, Google Inc. and Apple Inc. The game's graphics show a cartoon of Arpey carrying a bag of money and state that "it's too late to stop outrageous checks to corporate execs at Merrill Lynch and AIG, but we can stop the corporate greed at American Airlines."

It includes a petition urging the board of AMR Corp., American's parent company, to cancel the bonuses.

Union frustration

Unions representing pilots and flight attendants have already criticized the bonuses in public statements and compared American to disgraced insurance giant AIG. But the TWU is the first labor group to cite the much-maligned company in an ad campaign aimed at American.

All three of American's unions are in contract negotiations. Many American employees are incensed by the annual bonuses, pointing out that rank-and-file workers are still laboring under reduced wages and benefits stemming from concessions that were approved in 2003 to keep the airline out of bankruptcy.

The annual bonus plan rewards about 1,000 top executives and managers and is based on the performance of AMR's stock compared with other airlines'. The final value of the bonuses will be based on the closing price of AMR shares on April 15.

It has paid out richly in previous years, but the 2009 bonuses are likely to be paltry when they're awarded this month. That's because AMR shares have plunged in value during the past year.

For example, if based on Wednesday's closing price of $3.37 a share, the airline's top five executives would share a stock bonus totaling about $725,000. That's down from $3.2 million last year, and $18 million in 2007.

The decrease "demonstrates the downside of at-risk compensation and serves as a reminder that we have more work ahead to build a stronger financial foundation for our company," said Latham, the airline spokeswoman.

The TWU, which represents about 26,000 mechanics, dispatchers, fleet service clerks and other ground workers, has been less critical of American management in recent years than other unions. Labor leaders worked closely with management after the 2003 concessions on a plan to bring in outside contracts to keep maintenance bases open in Fort Worth, Kansas City and Tulsa.

Little said that effort is part of the reason for frustration over the lack of a new contract that improves wages and benefits for ground workers.

"We actually took [the maintenance bases] and turned them into profit centers for American," he said. "And we have yet to reap any reward."

He noted that Dallas-based Southwest Airlines recently inked contracts with flight attendants, pilots and mechanics that include raises and other benefits.

"That shows that it's possible to sit down and get it done," he said. "Lately we feel like American just isn't really interested in getting it done."

TREBOR BANSTETTER, 817-390-7064