TWU Is Committed to Partnership with American Airlines

DALLAS, April 11 /PRNewswire-USNewswire/ -- In major trade publications and daily newspapers around the country this week, American Airlines will be advertising its partnership with its largest union, Transport Workers Union of America (TWU), whose members have generated hundreds of millions in recurring cost savings and more than $100 million in new revenue. At the same time, American is informing its "partner" that it will not distribute any additional stock to TWU members or other employees nor compensate workers for the "dilution" of stock due to a large management reward scheduled for April 18. On that date, a select few company managers will split an estimated $177 million in stock. The annual profit for American Airlines in 2006 was $231 million.

"The company is passing up an opportunity to acknowledge our members' efforts," said TWU International President James C. Little. "American's CEO Gerald Arpey told workers back in 2003 that we would 'pull together' and that 'we would share the pain and share the gain.' TWU members have obviously shared the pain and should now share the gain. The action of splitting nearly $200 million in stock with officers and key management employees does not demonstrate a willingness to share in the gain. Rather than pulling together, their policies are pulling us apart."

TWU, which represents more than 27,000 mechanics and ground workers at American, presented a proposal on March 15 calling for more stock to be distributed to TWU workers. Part of the union's proposal was "dilutive effect analysis" showing that the rich rewards to company managers were making other American Airlines employees poorer by reducing the value of current stock holdings. "The company responded this week to the TWU proposal saying it was unattainable. Even though there may be another alternative that makes sense for American and the employees, the company response is a flat N O to our proposal," said John M. Conley, TWU International Representative and AA System Coordinator.

"Profits are up, the share price is up and our members have improved the airline's bottom line by in-sourcing work from other carriers and finding new ways to boost productivity," said Little. "The company knows that this partnership is working. They're telling the world through newspaper ads it's working. At least half of last year's profits are due to the TWU/American partnership. But this greed on the part of the company's managers is putting the cooperative model in jeopardy. Workers are demoralized and having a hard time making it on reduced salaries and benefits. They need to be made whole or at the very least provided a fair share of the gains they generated."

Over the past three years, American Airlines' management and TWU members have partnered on a redesign of the airline's repair facilities, boosting efficiency. Instead of 800 mechanics working for 25 days on an aircraft overhaul, the process now is completed in 13 days with just 450 personnel. The cost has been reduced by 55 percent.

Many U.S. airlines send their planes to South America for major repairs. Because of the partnership between TWU and American and the resulting new efficiencies and cost competitiveness, South American airlines are flying their planes to American's facilities in the U.S. for maintenance. American's repair facilities are becoming a major profit center for the airline. This partnership produced $100 million in revenue from outside sources in 2006 and a projected $175 million in 2007.

In an April 10 news release highlighting the success of the TWU/American partnership, Bob Reding, American's Senior Vice President of Technical Operations said, "We are changing the way we are doing business, not only for our external customers, but in how we work with our employees and union partners. The only way this transformation is possible is through the ingenuity of our talented workforce. This is why, for this ad campaign, we chose to focus on our employees. They are the reason for our current and future success as a leading MRO [maintenance, repair and overhaul] provider."

Advertisements are scheduled to appear in newspapers in Chicago, Dallas/Fort Worth, Oklahoma City, Okla., Tulsa, Okla., Kansas City, Mo., and St. Louis. Wider circulation is scheduled for this summer.

Transport Workers Union of America (TWU) represents 130,000 workers, primarily in commercial aviation, public transportation and passenger railroads. More than half the union's membership work for commercial airlines. The union is an affiliate of the AFL-CIO.