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American CEO says contract proposals to ground workers to have “double-digit” pay increases

American CEO says mechanics contract offer will include double-digit pay increases

American chief executive Doug Parker recently told employees that the company plans to offer mechanics a double-digit pay increase during joint contract talks which have yet to start. (Video provided by an American employee)
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American chief executive Doug Parker recently told employees that the company plans to offer mechanics a double-digit pay increase during joint contract talks which have yet to start. (Video provided by an American employee)

American Airlines ground workers and mechanics will be offered “double-digit” pay increases in the upcoming contract negotiations, chief executive Doug Parker told employees last month.

During a town hall meeting in Dallas/Fort Worth, Parker was asked by a fleet service clerk if his work group would get the same 4 percent raises that flight attendants, pilots and non-unionized employees received at American earlier this year.

“It’s a lot bigger than 4 percent, because you are already below Delta [pay rates] and we’re going to take you to Delta [pay rates] and add 7 percent so it’s a double-digit increase,” Parker told the employee, which is in a video provided by an American worker.

Prior to US Airways’ merger with American and to get union support for the proposed deal, Parker and his management team promised 3 percent raises to unions and in exchange eliminate profit-sharing plans. At the time, American had not paid out profit-sharing to union employees in years since the airline was posting annual losses.

The three percent raise plus the additional 4 percent raise that American announced last December has prompted American’s management team to adopt the phrase "Delta plus 7" when talking about contract negotiations. Flight attendants and pilots have already reached joint contract bargaining agreements that have included the new pay rates.

But talks with its mechanics, ground workers and customer service representative work groups have progressed slowly.

In fact, there have been no contract talks between American and the Transport Workers Union-International Association of Machinists alliance that represents the majority of fleet service clerks, mechanics and other ground workers.

“As soon as the TWU-IAM Association gives us the green light, we’ll be at the table to negotiate a joint contract,” the company said in an email statement.

The union alliance was certified as the collective bargaining agent in May and has spent all summer creating negotiation committees and combining contract language from both the American and US Airways contracts.

The TWU declined to comment on the lack of contract talks.

American workers are starting to complain on the alliance’s Facebook page, asking union representatives what is taking so long.

“Lets go already the other groups have had a contract for a long time already,” wrote Leroy Jenkins in the union’s comments section. “The company is ready to negotiate so lets get to the table.”

Fleet service workers at legacy American did receive a contractual 4.7 percent pay increase earlier this month, bumping the starting pay for a ground worker to $9.84 per hour. Workers with more than ten years of seniority earn $24.09 per hour with the increase. Employees at the former US Airways locations received a 6 percent increase and are paid between $10.59 to $24.39 per hour depending on seniority.

And they are hoping for much more as Parker has promised "double-digit" pay increases.

Parker’s comments, however, were made in August, before Delta Air Lines announced a 14 percent pay increase for its ground workers and flight attendants. The significant raise for these workers, who are not unionized, came as Delta recalculated its profit-sharing plan so it would not pay out as much in profit-sharing to its employees.

It’s unclear if American will offer its mechanics and ground workers Delta’s new pay rate plus the 7 percent or if that may change as contract talks get underway this fall.

In a letter sent to union members on Wednesday, TWU leaders said it expects the “highest base hourly rates in the airline industry.”

“Now that Delta has announced pay increases of up to 14.5 percent, we expect Mr. Parker to live up to those promises,” said Garry Drummond, TWU director of the air transport division, in the letter.

Here is Parker’s full response to the fleet service clerk:

“The short answer is yes, but let me explain. The 4 percent was an increase that was given to everyone that had joint collective bargaining agreements at the time which was only the flight attendants. They had just gotten theirs done. They had voted and it had gotten ratified and we added 4 percent to it. It was for all non-contract employees so whatever you were making then we added 4 percent. What we said at the time was anyone who gets a joint collective bargaining agreement, anyone who already has it...what that was doing was taking the flight attendants to Delta plus 7 percent. We also were in negotiations with the pilots and we raised their offer on the table from Delta plus three percent to Delta plus 7 percent. So that 4 percent was taking everyone, taking both those contracts what was Delta plus three to Delta plus seven.

“So as I’ve said our proposal to your work group and the mechanics is going to be, I think, Delta, the higher of Delta or United, plus seven. So yes, you will get it when you get to a joint collective bargaining agreement. The whole point of this was to try and encourage all of us to get the joint collective bargaining agreements. So that’s what it is. So when we get an agreement done, it’s in there. It’s in the 7 percent that I’m talking about. It’s not 4 percent. It’s a lot bigger than 4 percent, because you are already below Delta and we’re going to take you to Delta and add 7 percent so it’s a double-digit increase.”

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