American Airlines and American Eagle employees prepare to march to U.S. Bankruptcy Court to protest against American's plans to cut jobs and labor costs while under bankruptcy court protection. The airline's three major unions, while opposing the company's restructuring plans, announced Friday that they would support a potential takeover bid by US Airways.
Spencer Platt / Getty Images
Spencer Platt / Getty Images
American Airlines and American Eagle employees prepare to march to U.S. Bankruptcy Court to protest against American's plans to cut jobs and labor costs while under bankruptcy court protection.
US Airways has been wooing labor unions to support a possible bid for bankrupt American Airlines.
Last week, the Transport Workers Union — which represents about 2,100 workers targeted for layoffs at American’s maintenance base in Tulsa — joined pilots and flight attendants unions in supporting a US Airways takeover.
Under a US Airways agreement with the TWU, the airline would cut 450 jobs at American’s maintenance base in Tulsa and grant two-year furlough protection to the 4,500 workers who remain, according to union documents, reports the Tulsa World.
Officials with AMR Corp., American’s parent, say they want to emerge from bankruptcy protection as an independent carrier. AMR is asking a bankruptcy court to void its current labor contracts.
For a decade, major airlines have used bankruptcy to accomplish what couldn’t be negotiated: “reduce wages and benefits to ‘market’ levels,” writes Washington Post columnist Steven Pearlstein:
Back in the days when fares and routes were regulated by the government and compensation was effectively set in an industry-wide pattern, there wasn’t much incentive for airlines to resist above-market wages, gold-plated benefits and inflexible work rules. And even after the industry was deregulated and the major carriers faced competition from lower-cost, non-union upstarts, the threat of a crippling strike gave the airline unions the upper hand in contract negotiations.
Bankruptcy gave airline executives a way to void labor agreements, change work rules, fire thousands and impose lower wages — effectively neutralizing the threat of a union strike, Pearlstein writes.
All of which makes what is happening at American Airlines deliciously ironic.
The company hoped to win speedy court approval for a plan to eliminate 13,000 positions, reducing benefits to current employees and retirees and reforming work rules that have made American’s productivity the lowest in the industry. Instead, the unions did an end run and struck new labor agreements with US Airways, which will use it as the basis for launching a bid to buy its larger rival out of bankruptcy.
Airline unions’ new message, Pearlstein writes: “both sides can play the bankruptcy game.”
