American Airlines employees awoke Tuesday to learn that the airline's parent company, AMR Corp., had filed for Chapter 11 bankruptcy reorganization. It was an action they had long feared but many expected.
"The timing surprised us," said Tom Hoban, a longtime American pilot who is communications chairman for the Allied Pilots Association.Two weeks ago, high-profile negotiations between American and the pilots union fell apart as union leaders rejected a proposed contract. But Hoban said that was not the straw that broke the airline's back."For this day to have been avoided, all the stars would have had to line up," he said. "It was a long shot at best."A similar view was voiced by Laura Glading, president of the Association of Professional Flight Attendants."Given the company's deteriorating performance over the last several years, coupled with the precipitous decline in its market capitalization and the troubled world economy, it always seemed ... that the question was not whether the company would file for bankruptcy protection, but when," Glading said in a statement.After years of mounting financial losses -- $12 billion in the last decade -- reducing labor costs will be at the top of the to-do list in the bankruptcy process. The result could be cuts in wages, benefits and pensions and new work rules and schedules."The process will be agonizing for employees," Hoban said. "Every single [labor] contract is going to be adjusted."Jim Little, president of the Transport Workers Union, which represents mechanics and other ground workers, said bankruptcy is "likely to be a long and ugly process.""Our union will fight like hell to make sure that front line workers don't pay an unfair price for management's failings," he said in a statement.Just reducing labor costs "can't fix the problems at American," Hoban said. For whatever reason, he said, American's management has been slow to replace its fleet of aging, fuel-guzzling jets, has allowed competitors to take market share and has failed to articulate a coherent strategy.Leaders of all the unions pledged that their members will continue to work diligently to assure that American passengers travel safely in the months to come.American workers have an enormous reservoir of ill will toward management. Union members, facing the threat of bankruptcy, made wage and benefit concessions in 2003. They hoped that new CEO Gerard Arpey would bring a fresh approach and heal labor-management relations.But the era of goodwill was short-lived. In 2006, after five consecutive money-losing years, the company awarded $100 million in stock bonuses to executives. The action left a bitter taste that still lingers."If you want cuts from your employees, you better step up and take yours too," said Paul Ritz, a 22-year veteran ground worker for the airline.Bob Cox, 817-390-7723Have more to add? News tip? Tell us
