Concession Talk Coming Tuesday

RV4

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Unions await AMR''s plans
By Trebor Banstetter
Star-Telegram Staff Writer
FORT WORTH - Union leaders representing American Airlines employees expect executives with the struggling carrier to present a long-awaited, comprehensive package of concession requests Tuesday.
American has scheduled a meeting at 8:30 a.m. that day with labor leaders, officials with the Allied Pilots Association, the Transport Workers Union and the Air Line Pilots Association said Friday. Based on recent meetings with management, labor officials said the session will probably focus on specific employee concessions.
They''ve wrapped up the informational phase, and it''s clear they''re ready to cut to the chase and get down to the specifics, said Gregg Overman of the Allied Pilots Association, which represents 13,500 American Airlines pilots.
Jim Little, international vice president of the Transport Workers Union, which represents 37,000 mechanics and ground workers at American, agreed.
Finally, we''re going to have a discussion about concessions, he said. That''s certainly the direction they''ve been heading, and it''s about time.
American Chief Executive Don Carty is expected to speak with American''s unions, while Peter Bowler, president of American Eagle, will meet with unions representing those employees, said James Magee of the Air Line Pilots Association, which represents 2,600 American Eagle pilots.
American officials confirmed that the meeting is scheduled but declined to detail what''s on the agenda.
We''re continuing our process of active engagement with the unions, and this is part of that process, said Bruce Hicks, an American spokesman.
It was unclear Friday what the proposed concessions might entail, but they are likely to include changes in work rules as well as wage and benefit reductions for some employees.
Fitch Ratings, a financial service that provides ratings on corporate debt, said in a recent report that American''s labor costs must be reduced 20 percent to 25 percent for the company to compete.
Carty has said on numerous occasions that the airline must cut labor costs substantially before American can return to profitability. Last year, he said the airline must cut $4 billion in annual expenses to survive.
So far, the airline says it has identified about $2 billion in operational cuts. Most of the remaining $2 billion will have to come from employees, the airline has said.
On Jan. 9, Carty told the Senate Commerce, Science and Transportation Committee that concession talks with unions would be well under way within 30 to 60 days.
And he warned employees in a recent recorded message that the solution to American''s woes inevitably will include the restructuring of our labor agreements.
Any concessions must be approved by the unions that represent employees at American and American Eagle. It is likely that the labor groups will carefully analyze any proposal before putting it to members for a vote.
Unions representing flight attendants, ground workers and mechanics have contracts in place that won''t expire until 2004. Only the American Airlines pilots are currently negotiating for a new contract.
Any concessions could have a major effect in North Texas. American is the area''s largest employer, with 28,000 workers.
Pilots said they hope executives present a complete business plan instead of a simple list of concessions.
As far as I''m concerned, any request for concessions is dead on arrival without a real business plan that points to a real recovery, said Sam Mayer, a 14-year American pilot who is chairman of the APA''s New York domicile. If all we''re going to do is postpone Chapter 11 from March to June, there won''t be much interest [in cooperating].
American, like other major airlines, is struggling to overcome the worst financial crisis in the industry''s history. Last year, the carrier lost $3.5 billion, and it''s expected to lose more than $800 million during the first three months of 2003.
Airline executives and many airline analysts say that American, which has among the highest labor costs in the industry, could be forced into bankruptcy if it can''t bring its costs down.
American has been under intense pressure in recent weeks to start moving on its vow to slash labor expenses. Many Wall Street analysts have chastised executives for failing to request specific contract changes.
We are quite disappointed that [American] management continues to approach the key issue of eventual labor-related cost savings very gingerly, to say the least, Reno Bianchi, an airline analyst in the corporate bond department of Salomon Smith Barney, said in a recent report. [American] runs the risk of running out of time.
On Tuesday evening, Carty is scheduled to be the keynote speaker during a dinner at the annual transportation conference in New York hosted by the Wall Street firm Goldman, Sachs & Co. The speech is expected to be well-attended by airline industry analysts.
Employees at rivals United Airlines and US Airways, both in bankruptcy, are negotiating major cuts in wages and benefits. United pilots, for example, have agreed to 29 percent wage cuts and flight attendants to 9 percent cuts. Ground workers are likely to have a 14 percent cut imposed by the bankruptcy court.
American has already presented two of its three major unions with a small concession request. In late December, Carty asked flight attendants, mechanics and ground workers to forgo 3 percent raises scheduled for 2003. Pilots, who are negotiating a new contract, have no raise scheduled this year.
The flight attendants and ground workers unions are considering the proposal and plan to decide soon whether to have members vote on it.
 
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RV4

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Interesting Quote from the above Article:

Jim Little, international vice president of the Transport Workers Union, which represents 37,000 mechanics and ground workers at American, agreed.

"Finally, we're going to have a discussion about concessions," he said. "That's certainly the direction they've been heading, and it's about time."
 

flyhigh

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...even more interesting was the quote from the NY APA rep...it's DOA without a business plan.

Maybe if pilots stuck to flying instead of thinking their premier business execs...that might help. Add to that the fact that they still haven't presented a case to say what is wrong with the current system. I would say the largest problem we have is too complex a pricing structure. However, wage rates (especially those of the pilots) needs to be adjusted to a level that meets the current revenue environment. The business plan is not going to be dramatically different. Carty has said the basics many times already...focus on cities that make a profit...ratioanlize the fleet (remove F-100's, and from what I recall 762's)...Remove 3-class service form most a/c...serve more int'l (where low cost guys aren't)...

This is a lot. Keep in mind that AA can't overnight change the company to be Southwest or even AirTran (another hub-and-spoke carrier). If they walked in and told the TWU that to be what AA needs to be overhaul will be completely outsourced...would TWU buy that? I'd like to see AA adopt some of the TWA 'focus city' idea. Take for example Colorado Springs...why fly AA? They got to three hubs ALL OF THE EASTWARD! To gain any loyalty from business you have to have a westward option. Maybe less reliance on hubs (still use them...but less) and more on focus cities.
 

Red Forman

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Dec 15, 2002
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Ahh---another pilot-bashing post that totally ignores the fact that AA pilot pay is only slightly higher than the now-reduced UAL rates and significantly below DAL rates.
AMR mgmt constantly states that the industry has changed permanently but so far have not made any major changes to their apparently obsolete business model. The pilots of AA are more than willing to do what it takes to ensure the airline's survival, but none of the employees are very interested in subsidizing a broken business model and lousy mgmt decisions like the TWA debacle. If he wants the $$$ then Mr. Carty had better produce a plan or we'll all sink anyway.
 
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On 2/2/2003 11:03:33 PM Red Forman wrote:

AMR mgmt constantly states that the industry has changed permanently but so far have not made any major changes to their apparently obsolete business model.

Would that be the business model that supporetd our contracts these many years?

The pilots of AA are more than willing to do what it takes to ensure the airline's survival, but none of the employees are very interested in subsidizing a broken business model and lousy mgmt decisions like the TWA debacle. If he wants the $$$ then Mr. Carty had better produce a plan or we'll all sink anyway.
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I'd like to think Carty does have a plan and one way or another we are going to participate in it.Be it now while we still have a voice in the process or in front of a bankruptcy judge where our options are far fewer.

I have to shake my head with all this constant *****ing about "The TWA debacle".Whats done is done, we are past the point of no return as far as that goes.

Had Islamic extremists not used AMR and UAL aircraft as weapons against this nation we'd be singing a different tune regarding TWA.

There is no more TWA,the former employees have their fate tied to AMR as much as we do.

I'm sure they aren't too thrilled with the "AMR Debacle" at this point either.

We seem to be too busy looking over our shoulders at the past as we run headlong towards a cliff.
 
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On 2/2/2003 7:30:54 PM RV4 wrote:

Interesting Quote from the above Article:

Jim Little, international vice president of the Transport Workers Union, which represents 37,000 mechanics and ground workers at American, agreed.

"Finally, we're going to have a discussion about concessions," he said. "That's certainly the direction they've been heading, and it's about time."

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[/blockquote]


They've tap danced around the issue long enough,time to hear exactly what they want.
 

s80dude

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[blockquote]
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On 2/2/2003 10:10:34 PM flyhigh wrote:



This is a lot. Keep in mind that AA can't overnight change the company to be Southwest or even AirTran (another hub-and-spoke carrier). If they walked in and told the TWU that to be what AA needs to be overhaul will be completely outsourced...would TWU buy that? I'd like to see AA adopt some of the TWA 'focus city' idea. Take for example Colorado Springs...why fly AA? They got to three hubs ALL OF THE EASTWARD! To gain any loyalty from business you have to have a westward option. Maybe less reliance on hubs (still use them...but less) and more on focus cities.
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[/blockquote]

I though COS service was to LAX (westward) and STL and DFW (two hubs eastward)
 

WingNaPrayer

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AA is going to file bankruptcy, no matter what. I look for them to make extremely unreasonable wage concessions and work rule change demands, not because they expect to get them, but most likely because they hope they don't! That way when they file the bankruptcy (that surely is already in the works) they will have found their scapegoats to blame - labor, and then executive management can sit back and play "not me" when the stockholders come knocking at their doors for answers.

This isn't about getting 2 Billion from labor in concessions to prevent bankruptcy from happening....this is about finding a very public, documented scapegoat to blame when a bankruptcy that is already in the works DOES happen, no matter what.

Stand Tough! NO givebacks! NO concessions!
 

Hopeful

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I have to agree with WINGNAPRAYER!
We are headed for the BK courts no matter what. When the company gives the unions their wish list, the unions might say "see you in court." I would think, however, that the TWU would feel the greatest pain in terms of work rule changes. They represent many different work groups that the company undoubtedly would love to contract out. You may see contracting out of cabin service, automotive, bulding maintenance, aircraft maintenance heavy checks, stores operations.
You may see "de-staffing" of non-major airports in all categories. This is judgement day for the company. They finally are on the way to permanently breaking the unions.
 

planemech669

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Just what I need to hear. wing, I'd like to hear your complete anaylis on what would happen through out the US economy if airline workers through out the industry were to take, let's say a 10% to 20% paycut across the board. That would be approximately 2 to 3 million affected, with an average yearly income of around 35,000 a year. Keep in mind that this is a broad generalzation and only intended as pure speculation. I also would like to hear your views on how such cuts would affect other industries that provide srevices, indirectly and directly to those 2 to 3 million people.
 

WingNaPrayer

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Plain and simple, on the average, 65% of those affected will end up in personal bankruptcy, which can mean loss of home, healthcare, and more. Now, as far as how it will affect other industries, I'm sure you can guess that one on your own.

The only problem you'll have to understand is that 10 to 20% is an unrealistic figure, even for "example" purposes. I believe that AA will ask for a flat 30% across the board, and mediate that amount from there.

Unfortunately, the bulk of AA's employees are in unprotected non-unionized classes, which basically means AA can slash their wages without reprocussion, and those groups are going to suffer the bulk of the concessions and reprisals. Many of them in those unprotected classes/groups don't fall under the annual income figure you give of 35K, there are a lot of agents out there that are barely breaking 20K, and part time employees even less. When you start talking 30% of 20K, then you're talking deep financial trouble for those affected employees. . . they simply couldn't afford to work for AA anymore.

Everyone either stands together as a single class and refuses pay cuts until certain criteria is met by the company, or they fall individually by class.

Either way you look at it, AMR WILL file for bankruptcy protection, even if they get wage concessions and work rule changes. They still have to file, or die from pride disease.
 

TWAFA007

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Sep 2, 2002
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Aloha,

The Unions have no power. Carty and AA will get what ever they want and the Unions can do nothing to stop them. What are they going to do strike? Ya right. If the Unions balk at anything AA wants its instant bankrupcy and they will get what they want there. These so called, "talks," are just a PR trick. Carty & AA will make the Unions appear as if they are greedy and dont really want to help. That it was the Unions unwillingness to, "work," with the company that forced AA into bankrupcy. Blame the Unions! history will repeat itself.

ALOHA, 007
 
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On 2/3/2003 10:39:45 AM WingNaPrayer wrote:

Plain and simple, on the average, 65% of those affected will end up in personal bankruptcy, which can mean loss of home, healthcare, and more.

[/blockquote]

And what basis do you have to back up that wild guess?

AA has about 90,000 employees in the US. 65% filing for bankruptcy would be equal to about 4% of all bankruptcies filed in Y2001, or slightly less than half of the number of filings in California.

Me thinks you've overestimated by quite a large factor...

[blockquote]
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On 2/3/2003 10:39:45 AM WingNaPrayer wrote:

Unfortunately, the bulk of AA's employees are in unprotected non-unionized classes, which basically means AA can slash their wages without reprocussion,

[/blockquote]

Baseless crap.

AA's non-management workforce is almost 80% unionized.

TWU represents 38.5%, APFA 19.5%, and APA 11.5%.

[blockquote]
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On 2/3/2003 10:39:45 AM WingNaPrayer wrote:

and those groups are going to suffer the bulk of the concessions and reprisals.

[/blockquote]

Just when you though it was getting deep, even more baseless crap...

There's simply not all that much to be gained in terms of agent/rep productivity because there just aren't that many workrules in place.

If there are pay cuts, I'd expect it to be applied similar to how federal taxes are levied, and not as a flat across-the-board cut. UAL's negotiated paycuts (and those for management) were done on a sliding scale: those at the low end got lesser cuts; those at the upper end got bigger cuts.
 
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RV4

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Sounds like Little Jim of the TWU is about to break out those "snake and skull-n-crossbone" T-shirts and prove a point.

Immediate Posting
To: All AA Local Presidents and Members 501-590 02-04-03



Dear Sisters and Brother,



The Company has indicated to us that on Tuesday (February 4, 2003) it will unveil its plans to restructure the airline and will tell us the contractual relief it believes is necessary. After many months of beating around the bush, I will be glad to find out exactly what American’s position on these matters is, and I will be particularly interested in the sacrifices AA intend to impose on staffing and pay of its bloated management ranks.


As I’m sure all members understand, the fact that the Company believes relief is necessary does not mean it has made a case for it or, more important, that such relief would do anything to secure the figure (sic [future]?) of the carrier or our members’ careers. The burden of proof on these matters is squarely on the Company and our organization is required to and will review such requests with a skeptical eye. We will keep members and officers fully informed and, obviously each contract group will have the final say in the event the Company makes a proposal worthy of consideration

Sincerely and fraternally,

James C. Little

Director Air Transport Division.

**********************************************************************
***********

I am anxious to see the plan, but also fear that at least the intial reaction will be shock and dismay.

AA has always been inovative in adverse times, it will be a dissapointment if the airline is simply following others paths.
 

DFWFSC

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Aug 20, 2002
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I hate to say it but Mr Little needs to bring along a good pair of knee pads and a big box of kleenex. I would venture to guess that if your a TWU member not working in a hub or major station like LAX/JFK/LGA/etc...your about to get outsourced. I don't see much that Little or the TWU can do to stop it, plus a pay cut to boot.
 

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