American Wants To Scrap, Restart Union Negotiations

FORT WORTH (AP/CBSDFW.COM) – As promised, American Airlines has asked a bankruptcy judge to scrap its union contracts and restart negotiations from scratch.

Last week, the bankrupt airline threatened the action if a quick consensual agreement couldn’t be reached.

The unions involved are the Transportation Workers Union, which represent mechanics, baggage handlers and similar employees; the Allied Pilots Association; and the Association of Professional Flight Attendants.

The Associated Press reported American filed the request Tuesday in U.S. bankruptcy court in New York.

American plans to cut 13,000 jobs and reduce wages to emerge from bankruptcy with lower costs. The company says its annual labor costs are hundreds of millions of dollars higher than those at rivals such as United Airlines and Delta Air Lines.

Thomas W. Horton, the CEO of American and parent AMR Corp., said in a letter to employees Tuesday that the company was trying to speed up the bankruptcy reorganization process and avoid the chance that American could be sold or broken up. He said that AMR’s mounting losses and the rising price of oil added to pressure to act quickly.

Horton said he will continue to negotiate with the unions, but American must cut spending and job must be cut. “Failure to make the right changes is failure,” he said, “and that puts all jobs at American at risk.”

Union officials have charged that American never intended to bargain over cost-cutting –– that it planned all along to use the bankruptcy process to throw out contracts that they bargained for.

In a statement, Transport Workers Union president James C. Little said, “The 1113 motion does not change the fact that our negotiators are still at the table in Dallas trying to work out an agreement with AMR. If we are unable to reach an agreement, we are fully prepared to vigorously represent our members in court and explore all options.”

And here’s the full letter Horton sent out Tuesday:

(The Associated Press contributed to this report.)

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One Comment

  1. susan says:

    the way this is worded,they would just start from scratch in negotiations after the judge throws out the other does that help expedite the bankruptcy process as aa/amr wants to do? i was under the impression that the judge would make a ruling on contract issues with the proposals already in play, and with his checklist in hand, sayi yeah or nay to whatever is there..interesting …

  2. John says:

    I think that unions and the company can still continue to negotiate and perhaps reach agreements on their own. There is an imposed deadline, however, and after that I believe the judge will rule on the rejection and new terms if no deal is struck. Regardless, this should certainly light a fire beneath the various work groups to accept their new reality and compromise a bit more. The judge may not be so kind.

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