AMR wins labor deals with 5 union work groups

By Kyle Peterson and Nick Brown,Reuters

Five out of seven work groups represented by the largest labor union at AMR Corp.’s American Airlines voted to accept contract terms offered by the bankrupt airline that will cut thousands of jobs, the Transport Workers Union (TWU) said on Tuesday.

The vote ends a court battle between the groups and AMR over the airline’s bid to void its current collective bargaining agreements as it seeks to save US$1.25 billion a year in labor costs, including US$990 million from its unions. Had that request been successful, AMR might have been allowed to unilaterally impose even more stringent labor terms. That same court battle continues this week, however, for the TWU groups that turned down the deal, as well as two other unions representing AMR pilots and flight attendants who elected not to vote on the deal. Those groups are taking a higher-risk path, accepting the specter of deeper cuts on the hope Judge Sean Lane, in U.S. Bankruptcy Court in Manhattan, will deny AMR’s bid. The TWU groups’ vote does not alter the union’s overall support for a proposed merger between U.S. Airways and AMR, the union said in a statement on Tuesday. All three of AMR’s primary unions support a merger, saying it could save 6,000 jobs that would be doomed if AMR restructures on a standalone basis. AMR, initially resistant to a merger, said last week it was willing to explore its M&A options. The five TWU groups that accepted the deal — fleet service clerks, dispatchers, ground school instructors, maintenance control technicians and simulator technicians — will sustain about 7,300 job cuts, according to Bruce Hicks, a spokesman for AMR. But Hicks said the deal saves 1,300 fleet service jobs that would have been cut under earlier AMR proposals. He added that another 1,960 jobs could have been saved if two other work groups — aircraft maintenance workers and stores clerks — had accepted the plan. AMR filed for bankruptcy in November, citing an untenable labor structure. The US$990 million it has targeted in annual union savings has left its unionized labor force livid. Unions including TWU rallied last month outside Manhattan Bankruptcy Court, accusing the company of “blaming labor again” for lack of profitability. TWU President James Little at the time dubbed the court a “crime scene” for AMR’s perceived unfair position on labor talks.

But Little on Tuesday said in a statement that some of his union’s work groups “found the company’s last offer to be a safer bet than waiting on the court to make a decision.” “The members in bargaining units that voted ‘no’ thought the proposals were not in their best interests,” Little said.