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American''s unions looking for strong turnaround plan
Carrier says questions raised by labor groups have been addressed
02/21/2003
By ERIC TORBENSON / The Dallas Morning News
American Airlines Inc.''s labor leaders say they want assurances that management has a sound turnaround strategy in place before they consider $1.8 billion in annual concessions.
The Fort Worth-based airline has asked for the givebacks as part of its plan to stem $5 million a day in losses. While each union has taken the challenge seriously, each is in a different stage of negotiations.
• The pilots'' union – asked to give back $660 million in pay or productivity improvements – is willing to talk about concessions. It is already in negotiations over a new contract, and those discussions will now address the need for concessions.
• The ground workers'' union – asked to come up with $620 million a year in concessions – is set to begin intense, face-to-face talks next week.
• The flight attendants'' union – asked for $340 million a year in givebacks – is still assessing the request internally and said it isn''t ready to meet with management.
All three unions say American needs to show them that their concessions would be a requirement in its restructuring plan, and some union leaders say they aren''t convinced American''s plan will work, even after the labor concessions.
The Allied Pilots Association resolution passed last week requires any concessions be contingent upon an [American]-provided restructuring plan that would reasonably ensure the short-term survival and long-term viability of American Airlines.
American executives have said the airline can keep its longtime strategy of appealing to business fliers if it can cut costs by $4 billion a year. Some pilots'' union leaders aren''t impressed.
Until I see a viable revenue plan that isn''t just a shot in the dark, no, I don''t think that the pilot group should jump just because AA management says at the last minute, ''we need you to jump,'' Gary Boettcher, a board member who represents American pilots based in Washington, D.C., wrote in a message to members on Wednesday.
The pilots'' union wants more details: How will the airline reduce its nearly $20 billion in debt? How much money will American spend on new aircraft? How will it combat low-cost competitors?
American spokesman Bruce Hicks said the strategic information has been provided to the unions. All of their questions, at this point, have been addressed, Mr. Hicks said. Meeting the restructuring requirement set by the labor groups isn''t going to present a problem, he said.
Investing in the future
American''s pilots say they view concessions as an investment in American''s future.
We will invest what we believe is prudent to invest based on the viability of management''s financial plan, the state of our airline''s future, the need for savings, the amount we believe is palatable as compared to the alternative (bankruptcy) and the return on our investment, wrote APA President John Darrah in a message to pilots Wednesday.
To meet the $660 million annual goal, the pilots could agree to take 30 percent pay cuts, but Mr. Darrah said that probably won''t be their first choice.
They also could agree to fly more hours with fewer pilots, which would result in 3,300 additional furloughs. As of now, 1,048 American pilots are out of work. As of September, American had 12,748 pilots on its roster.
Calls to union representatives weren''t returned Thursday.
Talks between the Transport Workers Union representing 33,000 ground employees and the airline start Monday, and the talks will continue daily until March 7.
Despite the accelerated negotiation pace, the ground workers'' union also has concerns about American''s strategic plans for the future.
In letters to members, Jim Little, vice president of the union''s international body and director of the air transport division, said any relief given must be part of an overall plan to reorganize the company. We will be paying close attention to the steps being taken to eliminate the immense waste observed by our members in the course of every workday, he said.
American''s Mr. Hicks declined to comment on Mr. Little''s letter.
Complicated talks
Negotiating concessions with ground employees will be more complicated because the union negotiates for eight employee groups. Those agreements don''t expire until next year; the union isn''t obligated to change them.
American''s flight attendants'' union is in a similar situation. The Association of Professional Flight Attendants doesn''t have any face-to-face meetings scheduled with the airline to talk concessions, said spokesman George Price. We''re working internally right now, he said Thursday, with hopes to be ready to negotiate when it''s been determined we need to.
The pilots'' union''s Mr. Darrah said the time to talk is right now. Addressing some of the thousands of questions he''s received, he tried to lay out what''s ahead.
Are we going bankrupt? Given no change in any of the factors affecting the airline''s financial performance, the answer is yes, Mr. Darrah wrote. Can labor concessions prevent us from going into bankruptcy? We don''t know yet.
Shares of American parent company AMR Corp. dropped 5 cents to close Thursday at $2.87.
E-mail etorbenson@dallasnews.com