American union rejects wage concession proposal


Aug 20, 2002
DALLAS, March 5 (Reuters) - The union representing ground and airport workers at American Airlines has rejected a wage concession proposal by the carrier, which considers it a key part of a cost-cutting program that will keep it flying.
James Little, director of the Air Transport Division at the Transport Workers Union, said in a communication with his members late on Tuesday that his union did not agree with the amount of concessions sought by American, a division AMR Corp. (NYSE:AMR - News).
The company asserted in their proposal that our advisors and consultants have concluded that the company requires the $620 million relief, Little wrote. Our consultants and advisors have concluded that the company does need relief, but have not yet confirmed the specific amount.
On Monday, American said it presented a TWU negotiating team comprehensive proposals as part of its request for $620 million in annual employee-cost reductions from the union that represents the airline''s 33,000 ground and airport workers.
The carrier said the proposals lay out options to achieve the needed cost savings and provide the framework for collaborative discussions.
We have, therefore, sent back yesterday''s proposal to the company, Little wrote.
The airline said talks will continue with the union on wage concessions.
Our proposal was not intended as a take-it-or-leave-it matter. It expressed our view as to the sorts of modifications necessary to avoid bankruptcy, American said in a statement.
The union has stated it was prepared to work with us in good faith to accomplish this objective. We believe they are sincere and we intend to continue to work with them, it said.
Last month, American asked its employees to accept $1.8 billion in annual employee-cost reductions. The company is losing about $5 million a day and has said its current losses were unsustainable.
AMR Chief Executive Don Carty has said the airline must slash $4 billion in annual costs, including $1.8 billion in wage concessions, in order to stay in business.
All three of the major unions at American have said they are meeting the carrier''s call to consider wage concessions, which analysts said were essential if the world''s largest airline wants to avoid bankruptcy.
AMR shares edged up about 0.8 percent, or 1 cent, to $2.51 early on the New York Stock Exchange (News - Websites).