American Wants To Cut 13,000 Jobs, Close Alliance Facility
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FORT WORTH (CBSDFW.COM) - Fort Worth-based American Airlines announced Wednesday that it hopes to cut 13,000 jobs across the company as part of a restructuring plan that is still under development.
The breakdown of cuts is listed below.
- Mechanics: 4,600 jobs
- Fleet Service: 4,200 jobs
- Flight Attendants: 2,300 jobs
- Management & Support Staff: 1,400 jobs
- Pilots: 400 jobs
- Agents, Reps, Planners: TBD
AMR, the parent company of American Airlines, filed for bankruptcy protection in November of 2011.
Wednesday morning American Airlines CEO Tom Horton sent a letter to employees stating that “cost reductions will be deep” and “significant savings in employee-related costs” would be required. The letter also stated that all workgroups will have “total costs reduced by 20%, including management.” The letter said in order to achieve their goals American Airlines will have to cut yearly costs by $2 billion and increase revenue by $1 billion a year.
In addition to the letter sent by Horton, American has a new website, RestructuringAMR.com, that has more details on the company restructuring.
CBSDFW.COM reported Wednesday that some American Airlines administrative offices had been closed off to most of the workforce.
While American denied the claim, a separate CBS 11 source reported that the locks had been changed on the doors that access human resources at the AA maintenance facility at Alliance Airport in Fort Worth.
The same source also reports that there are additional armed guards at the Alliance facility.
Federal Aviation Administration spokesman Lynn Lunsford said the agency increases “our overall surveillance of airlines anytime they are in bankruptcy to make sure maintenance and other safety related tasks are being done properly.”
Lunsford added that it was inaccurate “to say that we have people standing around watching people today.” While surveillance has increased, Lunsford said the FAA has encountered no incidents nor seen any “areas of concern.”
A 20-percent cost reduction could mean the elimination of more than 13,000 American Airlines jobs, but airline analyst Denny Kelly told KRLD NewsRadio 1080 the true number of jobs lost will be considerably higher.
“You feel so sorry for the American Airlines employees, especially the ones that are gonna lose their jobs. But you have to remember that there a tremendous amount of people whose jobs depend on American, that aren’t American employees,” Kelly said.
The Allied Pilots Association, which represents American’s pilots, is calling the airline’s plan extreme. Officials say they will now begin negotiating for a better deal, which, as it stands, maintains 400 surplus pilots.
So far, American has not said if it plans on laying off any pilots. The union says pilots would be required to work about two extra days each month. They’re still working at 1993-era pay rates, the association says, and would have their pensions terminated and replaced with a 401k.
The union says its CEO was very direct during a meeting Wednesday.
“He wasn’t going to sugarcoat it,” said association spokesman Tom Hobon. “These cuts are going to be painful. There’s no way to put lipstick on this pig and dress it up. It’s going to be a very difficult process for all the employee groups.”
Lately AMR has been at odds with the Federal Pension Insurance Agency, after American raised the possibility it would freeze or terminate the pensions that currently cover some 130,000 employees and retirees.
The federal pension insurance agency recently filed $91 million in liens against American, because the company had only paid $6.5 million of a required nearly $100 million toward its pension plans last week.
In addition to changing or ending pension plans, with the bankruptcy filing and company ‘restructuring’, many are predicting an announcement of AA job cuts, and there are reports some U.S. maintenance positions may be moved overseas.
AMR employs about 25,000 people in North Texas.
Fort Worth Mayor Betsy Price says the impact on the region will be significant.
Price On KRLD:
Price says she had not heard any details on what the layoffs could mean for Alliance Airport, calling it ‘fluid’ situation that she has been in constant contact with American Airlines on.
Just after Price’s comments to KRLD, CBS 11 obtained a letter from AMR Senior Vice President for Human Resources Jeff Brundage to colleagues that said in part the airline would be outsourcing a portion of aircraft maintenance and would seek to close their operation at Alliance.
At 10 a.m. Wednesday AMR officials went into closed-door talks with representatives from the Allied Pilots Association (APA), the Association of Professional Flight Attendants (APFA) and the Transport Workers Union (TWU).
The group was scheduled to meet until Noon, return after lunch and resume talks until some type of tentative agreement is presented to the union reps.
In federal bankruptcy court on Tuesday AMR reported a $904 million loss in December, an amount that exceeded the first nine months of 2011 combined. American is the nation’s third-biggest airline.
AMR’s Alliance Maintenance Base has been in Fort Worth for 20 years. Long-time workers learned Wednesday that the base is on the company’s chopping block.
Mike Shults, who has worked at Alliance for 14 years, said the depth of the proposed cuts was surprising.
“I don’t believe anybody at the airport, at Alliance, really expected that many cuts,” he said.
Shults’s job repairing emergency exits will likely be outsourced, possibly overseas.
“I’m worried for all of us,” said Sherille Rivera, a flight attendant. “I would not like for any of us to lose our jobs.”
Employees said they know they have at least a few weeks of work while negotiations continue with the unions. The changes could even go to court, buying the employees even more time.
But in a year to 18 months, they’ll likely be faced with finding another job.
“We’re going to suffer from all this. A lot of guys at work are in a lot worse position than I am,” Shults said. “And I’m scared.”
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