Every union leader expressed surprise by the large number of job cuts American Airlines says it needs to survive. They plan to fight back. KERA’s Bill Zeeble reports that 13,000 figure could shrink before negotiations end, and the plan heads to bankruptcy court.
James C. Little, International President, Transport Workers Union: I definitely was surprised, I was surprised at the depth of the cuts.
James Little, International President of the Transport Workers Union, says his union is set to take the biggest hit in American’s restructure plan. 8,800 people altogether, between fleet service workers, mechanics and others. American’s 20 year-old maintenance operation at Fort Worth’s Alliance Airport is slated to close, taking its 2,200 employees. Little thought the number would be smaller because the union had already agreed to some job losses.
Little: The trouble I have sleeping is what happens to all the families that we represent and the employees at American impacted by us? It also impacts the community as well. You know, the loss of jobs, loss of the economic buying power in the region these people live in.
Because these cuts are proposed, not final, Little has hired economists, investment bankers and other experts. He says they’ll mine American’s restructure documents, looking for ways to refute what the company says it must have to emerge from bankruptcy. Little says maybe the carrier won’t need as many layoffs as outlined.
Patrick Hancock, with American’s flight attendants union, believes attendants may have a valid argument against the proposed 2,300 cuts.
Hancock: Our wages and work rules are fairly competitive with the other carriers we have to compete with. We’re nowhere near the top of pack in terms of wages or benefits, and I don’t think they’re going to be able to make the case.
The Allied Pilots Association also plans to challenge American’s proposed furlough of 400 pilots. Veteran Pilot Tom Hoban knows this is just the beginning of negotiations.
Hoban: It’s an opening proposal. We expect to bargain off it. We’ll move the ball to mid-field and hopefully have a consensual agreement.
Hoban calls the proposed end of American’s retirement plan a non-starter for pilots. American wants to replace pensions with a 401K retirement plan, saving a lot of money. Hoban says money isn’t everything.
Hoban: This is a customer-service business and if you’ve got disgruntled employees and they feel like they’ve been put through the shredder in this process they’re probably not going to treat the customer very well.
American Airlines spokesperson Bruce Hicks says the carrier knows its plans are painful, and negotiable. But he says they’re designed for the long-term health and growth of the carrier and its remaining employees.
Hicks: While we’re reducing jobs, there’s no sugar coating the fact that we’ll be much smaller than in the past. We’re also going to preserve many more thousands of jobs through this business plan. We also include in our plan the proposal for pay raises beginning a year after the new contracts, to start that soon.
Hicks also says there’ll be 15 percent profit sharing for all employees, beginning with first dollar of profit. It’s not all bad. But in the end, he says, big changes are inevitable. The carrier’s in bankruptcy. Hicks says it needs to reduce $2 billion in expenses and add another $1 billion in revenue by 2017. And it cannot afford to wait too long.
More Info: RestructuringAMR.com