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American Airlines Plans to Slash Jobs, Cut Pensions in Bankruptcy Filing

Any unions that don’t reach deals with the airline in the next two weeks may have their new contract terms, and the number of layoffs, set directly by a bankruptcy judge.

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AMR's proposal would terminate 130,000 workers' pensions—the  largest such termination in U.S. history.  Rather than terminating pensions, TWU proposes to freeze them, meaning that no additional workers will vest in the pension, and new employer contributions will cease. 

Asked whether offering this concession has generated controversy within TWU’s membership, Little says he isn’t aware of any. He says the pension plan was “one of the pillars of what our members wanted us to hold onto” in 2003, and that having maintained it this long has made a great difference in members’ lives. He slams AMR for threatening members’ already-earned pension benefits by proposing to eliminate the pension entirely. “They ought to be putting one of those crime scene tapes around the building,” says Little, “because that’s exactly what’s happening: it’s a crime.”

But asked whether the pension plan, if frozen, could be revived for future workers in future contract negotiations, Little says, “From a personal standpoint, I don’t see that that would be the way of the future…I think defined benefit plans are going to be few and far between.”

Josh Eidelson is a freelance writer based in Philadelphia. He worked as a union organizer for five years. Check out his blog or follow him on Twitter.

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