AMR shares fall as union outrage renews threat of bankruptcy filing
DALLAS, Apr 21, 2003 (The Canadian Press via COMTEX) -- Investors pushed shares of American Airlines parent AMR Corp. down sharply Monday as labour-management friction simmered at the carrier, which barely avoided bankruptcy last week.
The union representing American''s flight attendants plans to hold a new vote on cost concessions following disclosure that the company quietly approved special benefits to shield managers from any bankruptcy filing while seeking deep givebacks from unions. Insiders believe a new vote would result in defeat for the world''s biggest airline.
The Fort Worth-based company has said it will file for bankruptcy immediately unless all its major unions agree to concessions, which total about $10 billion over six years.
In trading Monday on the New York Stock Exchange, shares of parent company AMR Corp. fell $1.15, or 23 per cent, to close at $3.85 US. The shares jumped 52 per cent last week, as American edged back from the brink of bankruptcy after securing nearly $1.8 billion US in concessions from its three major unions.
But the Association of Professional Flight Attendants has threatened to throw out results of last week''s balloting, in which 52.7 per cent of its members approved $340 million in annual concessions, reversing a "no" vote a day earlier when pilots and ground workers unions approved their share of the concessions.
Officials of the airline said they have a ratified contract with the attendants union.
American could try to get a federal judge to enforce last week''s vote, said Neil Bernstein, a labour law professor at Washington University in St. Louis. But he predicted a tough and possibly drawn-out fight.
"I would think that the flight attendants'' lawyers could very easily extend the company''s effort to enforce the contract for a good three years in court," Bernstein told the Dallas Morning News.
"I think the union here has a damn good argument that the vote was taken under false and misleading premises, and therefore they''re entitled to some relief."
Union leaders reacted with outrage when American belatedly disclosed bonuses for seven top executives and partial funding of extra pension benefits for 45 executives that would be protected from creditors should the company become insolvent.
The perks were approved last year - but not disclosed until after the voting by employees on layoffs and deep cuts to wages and benefits. American rescinded the bonuses Friday, but maintained the funding of the executive pensions.
Leaders of unions representing pilots and ground workers say they are consulting lawyers before deciding on their response.
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53 AM FA Mikey wrote: 
