American mechanics' 'no' vote attributed to anger toward company

BY D.R. STEWART World Staff Writer
Wednesday, May 16, 2012
5/16/12 at 7:42 AM

See previous stories about American Airlines and its Tulsa operations.

Nine years of living with wage and benefit cuts of 25 percent and the prospect of six more years of substandard industry compensation doomed a "final best" contract offer by American Airlines to its Transport Workers Union mechanics, union officials said Tuesday.

Although five of seven TWU work groups voted to accept the bankrupt company's offer, its maintenance & related work group and stores clerks rejected it.

"It appears to me they (mechanics) voted out of anger," said Rick Mullings, spokesman for TWU Local 514 in Tulsa. "We knew it was going to be close. We were hoping for a "yes" vote, but it didn't surprise me. We've gone the last six or seven years trying to negotiate a (new) contract and not getting one.

"We also voted to give American $1.6 billion a year in (wage and benefit) concessions" in 2003 to help the company avert a bankruptcy filing.

The mechanics, including 5,600 workers based at American's Tulsa Maintenance & Engineering Center, voted down the company's final offer by a count of 5,307 "no" votes (56 percent) to 4,179 "yes" (44 percent).

The stores clerks rejected the final offer, 521 (51 percent) to 495 (49 percent).

Five bargaining units, representing fleet service clerks, dispatchers, ground school instructors, maintenance control technicians and simulator technicians, voted to accept American's offer. It includes 7.5 percent wage increases over six years, fewer layoffs and less outsourcing of aircraft maintenance now performed in-house compared with a more severe "term sheet" offer in March. The latest offer also has provisions for early-retirement incentives and other benefits, company and union officials said.

The five work groups that accepted the offer will work under its provisions as a new contract, officials said.

The mechanics & related and stores clerks groups will confront American's efforts in bankruptcy court to reject their collective bargaining agreements and impose provisions of the March term sheet.

The term sheet includes layoffs of 13,000 people companywide, 2,600 of them in Tulsa, outsourcing of 40 percent of aircraft maintenance, changes in work rules and job classifications that likely will mean longer hours and less pay, and $1.25 billion a year in labor cost reductions.

James Little, president of TWU's International division, said the union's goal was to create options for its members and to give them a voice in the bankruptcy process.

"The bankruptcy courts are designed to protect assets, not people," Little said. "Some of our members found the company's last offer to be a safer bet than waiting on the court to make a decision. The members in bargaining units that voted "no" thought the proposals were not in their best interests. We respect our members decision regardless of how they voted."

American spokesman Bruce Hicks said the company is pleased five work groups ratified the company's offer.

"These consensual agreements preserve about 1,300 jobs and provide an early-out package, a profit-sharing plan, future pay increases, a 401(k) company match and a potential company (retirement medical) prefunding refund," Hicks said. "We are disappointed that the mechanics & related and stores work groups did not ratify the company's latest settlement proposals. For these groups, we will continue to pursue our (bankruptcy court) 1113 motion to reject the current labor agreements.

"It's important to note that if the 1113 motion is approved, American will move forward with implementation of the March 22 term sheets, which do not offer the job savings and improvements offered in the settlement proposals. In addition, American will be prepared to continue to negotiate in good faith with the TWU with the goal of reaching consensual agreements."

Also expressing disappointment at the vote of the mechanics and stores clerks was Mike Neal, president and CEO of the Tulsa Metro Chamber.

"Turning down this proposal could alter the future of the American Airlines Tulsa MRO (maintenance, repair and overhaul) base, including the potential loss of more than 2,100 jobs at the facility," he said. "However, we will continue to work towards the best outcome for the most number of people at the Tulsa facility.

"The chamber and its regional partners will find workable solutions to keep the region's aerospace industry thriving, including aggressively marketing our valued aerospace facilities and highly skilled work force to prepare for work that could ultimately be lost during this restructuring process."

Mayor Dewey Bartlett said the city-owned facilities operated by American must be kept up to date to generate jobs and economic development.

"These facilities will require investment and modernization to keep them competitive with the demands of the global aviation and aerospace industry," Bartlett said.

Ken MacTiernan, an American mechanic in San Diego, said high costs of living on the West and East coasts caused mechanics in those areas to vote overwhelmingly to reject the company's offer. His Local 564 represents mechanics in San Diego, Los Angeles, Santa Ana, Calif., and Las Vegas.

"I knew it was going to fail," MacTiernan said. "We gave up how much in 2003 and they want to give us 7.5 percent over six years? No way."

George Rojas, president of TWU Local 561 in Miami, Fla., said his members were concerned about increased medical insurance costs and lack of clear language in the final offer committing American to keeping Airbus and Boeing Next Generation aircraft maintenance in-house.

"For one thing, the medical insurance increases wipe out the wage increase," he said. "In aircraft maintenance, we are sitting at the bottom of the industry when you look at United, Southwest, Delta and US Airways. We would not improve our position in six years, and when you look at funding for your own retirement (American proposes freezing the TWU's pension plan) and increased medical insurance, it was too much.

"Hopefully, we will go back to negotiating something better."

Several mechanics said the increased medical insurance costs were a deal killer.

"Our medical deductibles go from $150 per person to $1,000 a person," said Chuck Schalk, vice president of Local 562 in New York. "If you have three kids and you go to a doctor, you would pay $3,000 in deductibles before your insurance kicked in, which wipes out the raises and more."

Del Cotton, a machinist at the Tulsa M&E base, said he wasn't surprised by the mechanics' vote.

"All the years of give-backs and concessions made a lot of people upset," he said. "There are a lot of uncertainties. It's probably more so now with the "no" vote."
Original Print Headline: 'No' vote attributed to anger at airline

D.R. Stewart 918-581-8451
don.stewart@tulsaworld.com

Associated Images:

Rick Mullings: "We've gone the last six or seven years trying to negotiate a contract and not getting one," the TWU spokesman said