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- Jan 21, 2007
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Airline union to plan strategy
By D.R. STEWART World Staff Writer
2/28/2007
Union members want to be rewarded for American Airlines' rebound.
Negotiations could get ugly this time around at AMR Corp.'s American Airlines.
As representatives of the Transport Workers Union, American's mechanics union, gather Wednesday in suburban Fort Worth to plan strategy for negotiations on a new five-year contract, there is evidence that American's hard-won labor-management cooperation is fraying at the seams.
Although American, which employs more than 6,000 aircraft mechanics in Tulsa, has avoided bankruptcy and posted a $231 million profit last year, its unionized mechanics, pilots and flight attendants say their sacrifices -- $1.6 billion a year in wage and benefit concessions since 2003 -- are not being shared by management.
While company executives say AMR's financial problems are not over, its stock price has soared during the past four years, closing at $33.95 Tuesday, making hundreds of executives eligible for millions of dollars in stock-based incentive payouts in April, officials said.
"Our position is that moving forward, we need to have a contract in place by the (May 2008) amendable date, and it's not going to be a concessionary contract," said Gary Yingst, the director of TWU's Air Transport
Division. "All of us will be expecting a return for our sacrifices -- and it will be monetary."
James C. Little, president of the TWU International, said the profits and share price of AMR are up because of the concessions agreed to in 2003 by the mechanics, pilots and flight attendants.
In addition, due to the work, planning and cooperation of the mechanics, American's maintenance bases in Tulsa, Fort Worth and Kansas City, Mo., have become major profit centers for the company, Little and the mechanics say.
The partnership between management and the mechanics is expected to bring in $100 million in revenue from outside sources this year and $175 million in 2008.
"We're pleased the company is doing so well," Little said in a written statement. "We know that much of this success is directly tied to our highly profitable partnership with the company that has streamlined the maintenance process and brought more than 50 customers, including many foreign airlines, into American's hangars for repairs.
"American's leadership has told us in recent years that workers and managers should 'share the gain' as well as 'share the pain.' The gains are there; it's time to share."
At an appearance in Tulsa earlier this month, AMR Chairman and CEO Gerard Arpey was asked whether the management stock incentives might jeopardize the cooperative relationship forged between labor and management.
"We are not paying (management) bonuses this year," Arpey said. "We have a stock-based incentive plan. If the stock does poorly -- as it did in 2002 through 2005 -- there are no incentives."
Arpey and American's management say the company's executive are paid less than comparable U.S. airline executives. The stock incentives help redress the differences between executive pay at American and the market, they say.
But American's labor groups and some industry observers aren't buying it.
Mike Boyd, an industry analyst with the Boyd Group in Evergreen, Colo., and a consultant for American's pilots union, the Allied Pilots Association, said a management payout this year would be a major mistake.
"When you're lavishing money on management at the same time you're telling employees that regardless of the profits, we're not out of the woods, you've lost all credibility," Boyd said in a telephone interview. "If Arpey believes these are two separate issues, he needs to come back to earth."
Lori Bassani, spokesman for the Association of Professional Flight Attendants at American, said morale is suffering because of the perception of unequal sacrifices by labor and management.
"Our membership feels top American Airlines executives are getting paid bonuses on the sacrifices employees made in 2003," Bassani said in a telephone interview. "I see a huge opportunity that's being missed. They could have led by example to really pull employees together.
"This is an opportunity to equitably share with employees the profits made by the airline due to the sacrifices made by all employees. That would have engendered employee loyalty that would have spilled over to our customers.
"Happy employees produce happy customers. It just seems so obvious to me."
--------------------------------------------------------------------------------
D.R. Stewart 581-8451
[email protected]
By D.R. STEWART World Staff Writer
2/28/2007
Union members want to be rewarded for American Airlines' rebound.
Negotiations could get ugly this time around at AMR Corp.'s American Airlines.
As representatives of the Transport Workers Union, American's mechanics union, gather Wednesday in suburban Fort Worth to plan strategy for negotiations on a new five-year contract, there is evidence that American's hard-won labor-management cooperation is fraying at the seams.
Although American, which employs more than 6,000 aircraft mechanics in Tulsa, has avoided bankruptcy and posted a $231 million profit last year, its unionized mechanics, pilots and flight attendants say their sacrifices -- $1.6 billion a year in wage and benefit concessions since 2003 -- are not being shared by management.
While company executives say AMR's financial problems are not over, its stock price has soared during the past four years, closing at $33.95 Tuesday, making hundreds of executives eligible for millions of dollars in stock-based incentive payouts in April, officials said.
"Our position is that moving forward, we need to have a contract in place by the (May 2008) amendable date, and it's not going to be a concessionary contract," said Gary Yingst, the director of TWU's Air Transport
Division. "All of us will be expecting a return for our sacrifices -- and it will be monetary."
James C. Little, president of the TWU International, said the profits and share price of AMR are up because of the concessions agreed to in 2003 by the mechanics, pilots and flight attendants.
In addition, due to the work, planning and cooperation of the mechanics, American's maintenance bases in Tulsa, Fort Worth and Kansas City, Mo., have become major profit centers for the company, Little and the mechanics say.
The partnership between management and the mechanics is expected to bring in $100 million in revenue from outside sources this year and $175 million in 2008.
"We're pleased the company is doing so well," Little said in a written statement. "We know that much of this success is directly tied to our highly profitable partnership with the company that has streamlined the maintenance process and brought more than 50 customers, including many foreign airlines, into American's hangars for repairs.
"American's leadership has told us in recent years that workers and managers should 'share the gain' as well as 'share the pain.' The gains are there; it's time to share."
At an appearance in Tulsa earlier this month, AMR Chairman and CEO Gerard Arpey was asked whether the management stock incentives might jeopardize the cooperative relationship forged between labor and management.
"We are not paying (management) bonuses this year," Arpey said. "We have a stock-based incentive plan. If the stock does poorly -- as it did in 2002 through 2005 -- there are no incentives."
Arpey and American's management say the company's executive are paid less than comparable U.S. airline executives. The stock incentives help redress the differences between executive pay at American and the market, they say.
But American's labor groups and some industry observers aren't buying it.
Mike Boyd, an industry analyst with the Boyd Group in Evergreen, Colo., and a consultant for American's pilots union, the Allied Pilots Association, said a management payout this year would be a major mistake.
"When you're lavishing money on management at the same time you're telling employees that regardless of the profits, we're not out of the woods, you've lost all credibility," Boyd said in a telephone interview. "If Arpey believes these are two separate issues, he needs to come back to earth."
Lori Bassani, spokesman for the Association of Professional Flight Attendants at American, said morale is suffering because of the perception of unequal sacrifices by labor and management.
"Our membership feels top American Airlines executives are getting paid bonuses on the sacrifices employees made in 2003," Bassani said in a telephone interview. "I see a huge opportunity that's being missed. They could have led by example to really pull employees together.
"This is an opportunity to equitably share with employees the profits made by the airline due to the sacrifices made by all employees. That would have engendered employee loyalty that would have spilled over to our customers.
"Happy employees produce happy customers. It just seems so obvious to me."
--------------------------------------------------------------------------------
D.R. Stewart 581-8451
[email protected]