AA retiree committee aims to guard pensions
BY D.R. STEWART World Staff Writer
Saturday, February 04, 2012
2/04/12 at 4:30 AM
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It's deja vu all over again for Paul Mazzara.
A former Transport Workers Union benefits representative with Trans World Airlines, Mazzara watched helplessly as billionaire Howard Hughes' former airline filed bankruptcy and terminated employee pension plans in 1992.
Mazzara lost 50 percent of his TWA pension in the bankruptcy.
In 2001, TWA was acquired by AMR Corp., parent of American Airlines.
On Nov. 29, AMR filed a Chapter 11 bankruptcy reorganization petition in U.S. Bankruptcy Court in New York, less than a year after Mazzara retired from the company.
AMR executives said this week the company proposes to terminate its four defined benefit pension plans as part of $2 billion in cost reductions it needs to emerge from bankruptcy and compete successfully in the airline industry.
"I already had my pension cut with TWA, and I'm retired from American now, so I'm reliving something I have already been through with TWA," Mazzara said.
This time, however, he is fighting for the pension benefits.
Mazzara has been elected chairman of the American Airlines Retirees Committee, the lobbying arm of AMRRC Inc., a nonprofit organization formed by American retirees to represent them in AMR's bankruptcy case. Nonprofit status gives the organization tax benefits and legal protection for its seven board members, officials said.
The committee's objectives are to secure rights and benefits for American's retirees and the appointment to a seat on the committee for unsecured creditors in AMR's bankruptcy case, Mazzara said.
More than 1,500 supporters have signed as members of the American Airlines Retirees Committee on its website at tulsaworld.com/retirees
"It represents all retirees - management, non-management, service support staff, passenger service agents, reservations, TWU, flight attendants, pilots and any organization that wants to work with us towards the same goal," Mazzara said. "Our organization wants to work with everybody. We need to protect retirees and we can only do it together."
From Monday through Wednesday, Mazzara, committee Treasurer Stephen Granat and board member Jill Frank Smoak were in Washington, D.C. They met with executives at the Pension Benefit Guaranty Corp., the federal agency that insures defined benefit retirement plans.
The three also conferred with members of the Senate Committee on Health, Education, Labor and Pensions as well as the Senate Judiciary Committee's Subcommittee on Administrative Oversight.
"We met with Michael Rae, the PBGC's deputy chief insurance information officer, and we discussed where we are at and where American is," Mazzara said. "He said American hasn't shown the need or provided any documentation other than 'somebody else did it.'
"Because American's competitors did it (terminated pension plans), American feels like they should also."
American is the fifth U.S. airline to file bankruptcy since 9/11. But only United Airlines and US Airways terminated all employee pension plans, court documents show.
Northwest Airlines retained its plans but froze them. Delta Air Lines terminated its pilots pension plan and froze the plans for salaried employees.
Meeting with senators and aides on Capitol Hill, the committee members outlined the $1.6 billion a year in wage and benefit concessions agreed to by mechanics, pilots and flight attendants in 2003 to help American avert a bankruptcy filing.
Nine years later, the unions are still working under the concessionary contracts that cost them 25 percent of their wages and benefits.
"In exchange for these concessions, AA management was to increase revenue and create a business plan that allowed this now competitive work force to work for a profitable company," Mazzara wrote in a letter the committee members left with senators and Capitol Hill staff members. "The unsecured creditors committee has informed the court that AMR failed to meet its part of the bargain and has not successfully generated the revenue necessary to become profitable.
"It is in everyone's interest that corporate America succeeds, but this should not come at the cost of the millions of workers who have bargained in good faith and met their side of the contract. ... We ask that you pass legislation which compels AMR and other corporations to meet their obligations to retirees rather than use the courts as a means of shedding them."
Mazzara said the committee board is asking supporters for a $50 a year membership fee that will pay organization costs and legal fees.
Dean M. Gloster, a San Francisco attorney who heads the restructuring, insolvency and creditors rights practice at Farella Braun and Martel LLP, has agreed to represent the committee in AMR's bankruptcy. Gloster has represented retiree groups and committees in the bankruptcies of Delta Air Lines and Delphi Corp., the law firm's website says.
Gloster, who was traveling, could not be reached for comment.
"American has to fix their business, not take away more benefits from employees," Mazzara said. "Your employees are your asset. You need to take care of your employees."
American Airlines Retirees Committee (AMRRC Inc.)
What: Nonprofit corporation formed
to represent American Airlines retirees
in AMR Corp.’s bankruptcy case.
Where: P.O. Box 1178, Bedford, Texas
76095; website: tulsaworld.com/retirees
Why: AMR proposes to terminate
four employee pension plans as part
of bankruptcy restructuring.
Who: Committee has 1,500 retireemembers
with an elected, nonsalaried
seven-member board of
How: Committee has retained Dean
M. Gloster, a San Francisco attorney
and bankruptcy specialist, who will
petition the court for a seat on the
committee of unsecured creditors.
Sources: American Airlines Retirees Committee,
U.S. Bankruptcy Court for the Southern District of
Original Print Headline: AA retiree committee seeks co-pilot role
D.R. Stewart 918-581-8451