Latest AMR offer could salvage 2,600 TWU jobs

Tue May 1, 2012 6:50pm EDT

A US airways plane takes off behind an American Airlines jet at Ronald Reagan National Airport in Washington April 23, 2012. REUTERS/Kevin Lamarque

A US airways plane takes off behind an American Airlines jet at Ronald Reagan National Airport in Washington April 23, 2012.

Credit: Reuters/Kevin Lamarque

(Reuters) - Members of the Transport Workers Union, one of bankrupt AMR Corp's (AAMRQ.PK) primary labor groups, will vote later this month on a proposed contract from AMR that would reduce by 2,600 the number of proposed union layoffs at the airline.

The offer would also allow 500 to 700 workers to reclassify themselves to preserve their jobs.

The union, which represents 26,000 ground workers, dispatchers and other groups at the American Airlines parent, is slated to vote on the offer between May 10 and May 14.

The proposed contract was made public on Tuesday by the TWU.

The vote comes amid a court battle in which AMR is seeking permission to impose temporary unilateral contract terms on the TWU if the union does not approve the offer. AMR is also looking to impose temporary unilateral labor terms on two other unions representing its flight attendants and pilots.

The unilateral terms would be in place as the sides work to negotiate long-term consensual contracts.

The airline, which went bankrupt in November amid high labor costs, has said it needs $1.25 billion in annual labor-related savings to become profitable.

In a letter to his constituents on Tuesday, the president of AMR's flight attendants' union, the Allied Pilots Association, said the APA was circulating a petition of "no confidence" in that business plan.

"Everyone should be asking ... are the managers who drove American Airlines into bankruptcy the ones to lead us out?" David Bates said in the letter.

Under AMR's proposed unilateral work terms, the TWU would lose around 9,000 jobs. The airline's latest offer would cut only 6,400 jobs at the TWU.

AMR's unions are urging the airline to pursue a different track altogether, namely a proposed merger with US Airways LCC.N that, according to the unions, would save a total of 6,000 jobs, including 3,500 at the TWU.

The TWU did not endorse AMR's latest contract offer, but its president, James Little, stressed that stakes were high. Both the contract and AMR's unilateral terms would be "concessionary and painful," Little said in a Tuesday letter to union members.

"But there are huge differences between these two outcomes," he said.

AMR and its three primary unions -- the TWU, the Association of Professional Flight Attendants and the APA -- are in the midst of a two-week hiatus in a court battle over the company's bid to abrogate its collective bargaining agreements and impose its own work rules.

The sides are allowed to use the two-week window to negotiate consensual deals, but neither the APFA nor the APA were actively bargaining as of Tuesday afternoon, AMR spokesman Bruce Hicks said.

"There are no negotiations scheduled at the present with the APA and APFA, although the company remains available to meet at any time and we are anxious to do so," Hicks said.

A spokesman for the APFA confirmed that the union was not bargaining with AMR.

AMR's bankruptcy is In re AMR Corp et al, U.S. Bankruptcy Court, Southern District of New York, No. 11-15463.

(Reporting by Nick Brown in New York and Kyle Peterson in Chicago; Editing by Phil Berlowitz)