The Pryor Times

State News

February 2, 2012

American wants to cut 13,000 jobs

TULSA (AP) — State officials say Tulsa could lose as many as 2,850 jobs as a result of a bankruptcy reorganization plan released by the parent company of American Airlines.

Citing figures from the nation's third-biggest airline, U.S. Sen. Jim Inhofe said Wednesday Tulsa is expected to lose 2,850 jobs. An American Airlines spokesman did not immediately return a telephone call seeking comment.

The company employs about 6,800 workers at a maintenance facility in Tulsa.

AMR Corp. filed for Chapter 11 bankruptcy in November, and released a proposal Wednesday saying it planned to slash about 13,000 jobs, or 15 percent of its workforce.

Inhofe and other state officials said they were disappointed, but not surprised by the airline's announcement. They expressed optimism that the maintenance facility in Tulsa will remain operational.

The parent of American Airlines is seeking to remake itself under bankruptcy protection.

The company proposes to end its traditional pension plans, a move strongly opposed by the airline's unions and the U.S. pension-insurance agency, and to stop paying for retiree health benefits.

AMR Corp. said Wednesday that it must cut labor costs by 20 percent. It will soon begin negotiations with its three major unions, but the president of the flight attendants' union quickly rejected the company's ideas as unacceptably harsh.

CEO Thomas W. Horton said Wednesday that the company hopes to return to profitability by cutting spending by more than $2 billion per year and raising revenue by $1 billion per year.

AMR lost $884 million in the first nine months of 2011, and on Tuesday it disclosed a $904 million loss for December alone. It has lost more than $11 billion since 2001.

"We are going to use the restructuring process to make the necessary changes to meet our challenges head-on and capitalize fully on the solid foundation we've put in place," Horton said in a letter to employees.

AMR's 88,000 employees have braced for bad news for weeks. AMR, American and short-haul affiliate American Eagle filed for bankruptcy protection in November.

Horton said in December that the company would emerge from bankruptcy with fewer workers.

Laura Glading, president of the Association of Professional Flight Attendants, said the proposal was more drastic than she expected. She claimed that the annual reduction in employee costs, which AMR put at $1.25 billion, would be closer to $2.8 billion.

"This is an absolute outrage," Glading said. "There's nothing in here that's remotely acceptable."

Transport Workers Association President James Little declared, "We're going to fight this." His union represents American's mechanics and bag handlers.

The biggest job cuts would come from the ranks of maintenance workers — about 4,600 — and baggage handlers, around 4,200, according to company spokesman Bruce Hicks. About 2,300 flight attendants, 1,400 management employees and 400 pilots would lose their jobs under the plan as well, he said.

If American and its three unions can't agree on changes, the company could ask a bankruptcy judge in New York to throw out existing labor contracts and impose the company's conditions on workers. Federal law requires the company to first make a good-faith effort to negotiate agreements with its workers.

The company also wants union approval to drop its traditional pension plan, which covers 130,000 employees and retirees. It would replace them with 401(k)-type plans.                       

nance-overhaul facility in Fort Worth, with 1,700 workers would be closed, and some maintenance and bag-handling work would be outsourced.

Text Only | Photo Reprints
State News