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Won't AA's Troubles Ever End?!

Tue Apr 29, 2003 7:22 am

Take a look at this, from today's St. Louis Post-Dispatch. Won't AA's troubles ever go away?

What will be the outcome of this latest stunt? Will this send AA back to the brink of bankruptcy?


Mechanics get extension in AMR contract dispute
updated: 04/28/2003 02:08 PM

A federal judge today gave some New York-based mechanics until May 13 to decide if they want to vote on a new contract that gives American Airlines $620 million in annual concessions.

A lawyer for Local 562 of the Transport Workers Union said the membership asked for more time to get details about the contract that is expected to take effect Thursday.

The extension also buys more time for the airline, which on Friday avoided bankruptcy for the second time in two weeks when union leaders agreed to accept new proposals that, when combined, give the airline $1.6 billion in annual concessions.

American said it would honor the proposals and not file bankruptcy only if none of the unions voted on the new contracts.

Harvey Mars, a lawyer for the mechanics represented by Local 562, said that condition by American violates members' rights because they never got a chance to vote on the new contract.

The mechanics asked the court for more time to get details about the deal because "the factual scenario changed radically" since the local first sought a review in the courts.

Local 562 originally had intended to seek a new vote on a contract approved April 15. The members wanted to vote again because they said the union failed to follow its own procedures. As a result, they said, some members didn't have a chance to vote.

A week later, American offered union employees a new deal after employees objected strongly to executive perks that would be paid even in bankruptcy while employees faced layoffs and cuts in pay and benefits.

To appease employees, American reached new deals with union leaders last week, hours after Donald J. Carty resigned. Carty was chairman and chief executive of AMR Corp., the parent of American Airlines.

The new deals shortened the length of the contracts to five years from six and allows them to be renegotiated after three years instead of six. American also agreed to use the same criteria to increase employees wages that it uses to increase management pay.

Local 562 said American has yet to outline the criteria for the wage increase so members don't know if the new proposal is a better one.

"It's my obligation to bring back the complete full text language so they understand what's in the proposal," said Chuck Schalk, president of Local 562. "We can't move forward on a request to vote until we have a full understanding of the package... We have to know what we have to do to get these incentives and if it's obtainable."

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