American Airlines Plans to Slash Jobs, Cut Pensions in Bankruptcy Filing
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Last Tuesday, APA filed a lawsuit arguing that the Railway Labor Act, which governs airline industry labor relations, may supersede the authority of the Bankruptcy Court to determine a settlement. APA has been in contract negotiations with AMR for five years, mediated – per the RLA – by the National Mediation Board.
“What we’re really trying to do is get the National Mediations Board involved in the process again, because we’re not going to reach a consensual agreement without them involved,” says APA Communications Chairman Tom Hoban. Hoban rejected comparisons between APA contract terms and those for other unions. “We’ve got different responsibilities and duties than a ‘ramper’ who cleans the aircraft,” says Hoban, an American Airlines pilot.
APFA did not respond to a request for comment. But in a Saturday bargaining update, President Glading retorted that AMR has rejected the union’s proposals without offering any counter-proposals and failed to respond to APFA’s information requests. Golding said that “American’s criticism of the Negotiating Team choosing to attend a Board of Directors meeting is particularly ill-founded,” because “membership ratification is essential to the success of these negotiations.”
Asked whether he agrees that AMR is trying to reach a deal in order to strengthen its position with the other two, TWU President Little says, “I hope so. I would hope it would be us…we would like to get it, and I’m sure the other [unions] would rather get a consensual deal” with AMR rather than see the decision reach a judge, because “when you put it in the hands of a third party that doesn’t know the job, you don’t know what you’re going to get.”
Last Wednesday, TWU and APFA members held coordinated demonstrations outside 14 airports around the country opposing job and benefit cuts. “This is one of the few jobs that are left with great medical coverage and pensions,” Los Angeles fleet service worker Derek Moore told the local Daily Breeze, “so we want to hold on as much as we can to keep our families safe.”
But even under TWU’s current proposal, workers would experience major cuts. A centerpiece of the TWU proposal is a plan for voluntary buyouts, under which employees could receive a one-time $75,000 severance in exchange for giving up their jobs. TWU says its proposal is similar to buyouts that took place in other airlines’ bankruptcies, and would give some employees the chance to re-train or retire while reducing the number of involuntary layoffs.
In a February 24 statement, AMR said that buyout proposals from both TWU and APFA “represent a significant cost to the company and could not be accepted on their terms,” but “we have a long-standing record of mitigating involuntary reductions through voluntary programs and remain willing to explore alternatives, at the appropriate time in this process, that don’t exacerbate our cost challenges.”
On retirement security, TWU had already reached tentative contract agreements prior to the bankruptcy announcement that would replace pensions with 401(k)s for new employees in some bargaining units.
Asked whether AMR is open to maintaining any of its current pension plans, an AMR spokesperson e-mailed a January 23 letter from Senior Vice President Jeff Brundage. Brundage’s letter tells employees that even if their pension plan is eliminated, most workers vested in the pension will continue to receive benefits due to the Pension Benefit Guaranty Corporation (PBGC), and employees will have “some form of retirement benefit going forward, regardless of whether the defined benefit plans are terminated or frozen.”
PBGC blasted this statement as "misleading" and irresponsible, and is expected to further amplify its criticism of AMR this month ( In These Times will have further reporting on the PBGC this week).