AMR Corp. CEO Tom Horton answered questions from reporters Wednesday. Here are excerpts.
On American's plan to cut 13,000 workers and close its Alliance maintenance base:"This in my view is a different kind of restructuring. It's not about shrinkage. It's about renewal and growth. We're going to go about restructuring the company I think we'll do this as well as anyone has done it before. ..."Our objective is to improve our profitability ultimately by $3 billion a year. That will come through revenue improvements associated with better scale, fleet optimization and some of the product improvements I talked about and cost savings of over $2 billion a year which will come from restructuring debt and leases, grounding older planes, improving supplier contracts and other initiatives and then of course necessary employee changes. Those are going to be very significant. We talked about that today. And those are going to be challenging but the objective here is to put the company back on the path to a successful and growing future."On why it chose to close its Alliance base instead of the one in Tulsa:"We have a good more maintenance facility capability than we need, and as part of this restructuring we will seek to outsource some of our heavy aircraft maintenance as our competitors do and do it in a more cost-effective way. It so happens that the airplanes that were most apt to outsource are the wide-bodies that are maintained at Alliance. ... So it's really a product of the demand for the type of service and so we will likely outsource that business, and I very much regret the closing of Alliance and I very much regret the effect it has on our employees."On convincing workers that the changes are necessary and that management isn't profiting from employee cost cuts:"We are going to go make these changes that I just described. When we do, this company is going to be a fierce competitor and we're going to be profitable and when we are, we are going to share the first dollar of our profits among our employees. So we envision a plan that will pay out 15 percent of pre-tax profits and I would anticipate that will be quite meaningful in the years to come. I would also say that I think we should not be paying out any bonuses to leadership unless we are paying profit-sharing to the employees."On growing revenue by $1 billion annually:"It's going to come from a handful of things. The first thing I would mention is from unshackling the company from the many strictures that we've had placed on us over the years. We will be able to better match the size of the aircraft to the market we serve and that will have very significant revenue impacts. We will have the ability to code-share more broadly as our competitors do. That will have a significant revenue impact. We will fully capitalize on our alliances and joint business agreements across the Atlantic and Pacific and now to Australia. Those things are very much in their infancy but we're already starting to see wins in corporate contracts associated with those joint business agreements."On potential bidders or acquirers that might emerge: "I think our plan will speak for itself. I think that is the best thing for our company. I certainly think it's the best thing for our people. You know there will be lots of M&A [mergers and acquisitions] speculation. There always is and always has been in these situations, but there has been a lot more M&A speculation than there have been deals inside of restructuring."Have more to add? News tip? Tell us
