Workers divided on American Airlines' final offer
American Airlines ground workers split over a final contract offer from the company that would spare some jobs targeted for elimination.
The Transport Workers Union said Tuesday that five work groups voted to accept the company's offer but two others, including the biggest, aircraft mechanics, rejected it.
Pilots, flight attendants and the TWU have already thrown their support to a bid by US Airways to take over American and create a bigger combined airline.
AMR Corp.'s American Airlines is trying to throw out other union contracts to cut costs as it goes through bankruptcy protection. A hearing on that move continued Tuesday in federal district court in New York.
The split in weekend voting underscored the difficult choices facing American's 73,000 employees, including whether to support the company's plan to remain independent for now or to favour an immediate merger.
The Transport Workers Union did not take a position on the contract offer, although some local officials opposed the deal. "Some of our members found the company's last offer to be a safer bet than waiting on the (bankruptcy) court to make a decision," said TWU President James C. Little.
American filed for bankruptcy protection in November and announced in February a plan to eliminate 13,000 union jobs and cut other costs to emerge a profitable company.
Company spokesman Bruce Hicks said Tuesday's voting results would save 1,300 jobs, pay raises, early retirement incentives and other benefits for the five groups that accepted the deal. The company also had promised to save 1,900 maintenance jobs, but that offer could be dead after mechanics rejected the offer 56 per cent to 44 per cent.
TWU said workers whose groups approved the offer would see no changes in jobs, wages or working conditions until the bankruptcy court judge rules on American's request to throw out current labour contracts for pilots, flight attendants and mechanics. A ruling is expected in early June.
Union lawyers and officials continued their defence of the contracts in court on Tuesday. They have told the judge that American's restructuring plan is more aggressive than needed to make the company profitable, and that overreaching will hurt workers. They say that such deep cuts aren't needed if American merges with US Airways to create a bigger airline that could compete better with United and Delta.
The Allied Pilots Association said in a court filing that American Airlines executives want to break their union contracts to gain more bargaining power in negotiating mergers with other airlines. The union charged that American executives could either block a merger to remain in control of American or negotiate bigger payments for themselves to approve a deal.
The unions also complain that American proposed concessions last fall but made much tougher demands once it went into bankruptcy — from $50 million US per year last fall to $370 million per year now in the case of the pilots.
Company executives testified last month that the smaller savings would have been enough to kick American's problems down the road — "the limp-along strategy," they called it — but that deeper cuts are needed for the airline to be profitable.
American's attorneys also argued that the pilots' union had made concessions to US Airways, such as outsourcing more small-jet flying to partner airlines, that it opposed when suggested by American.