Posted on 04/15/2003 12:23:53 PM PDT by Illbay
Could be a long summer for airline travel!
I have a feeling these flight attendants are going to be very sorry about the way they voted.
April 15, 2003 3:41 p.m. EDT |
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American Attendants Vote By SCOTT MCCARTNEY The flight attendants union at AMR Corp.'s American Airlines narrowly rejected $340 million of contract concessions by only a few hundred votes, people familiar with the situation said, but the company and union are discussing whether to hold a new vote because of problems in balloting. The board of the Association of Professional Flight Attendants is meeting to discuss the results. People familiar with the matter say there have been discussions between the union and AMR management on the possibility of allowing a new vote, perhaps in as short a time as 24 hours, because flight attendants weren't allowed to change their vote even as contract terms changed last week. Unions representing pilots and ground workers approved concessions earlier today. Without ratification by all three unions of the plan to slash $1.8 billion in annual labor costs, American has said it will file for bankruptcy reorganization. Late Monday, the Association of Professional Flight Attendants asked senior executives at American for an extension on the company's self-imposed noon EDT deadline today because of ``problems with the balloting process, including the delay in the delivery of the contract language to the APFA membership." American rejected that request, but people familiar with the matter said the company left open the possibility that if the vote was close, and only the flight attendants union rejected the deal, another vote would be allowed. Such a move would have to be approved by the union board, which last week had made the decision not to allow members to change their votes. Leaders of both the Allied Pilots Association and the Transport Workers Union allowed their members to change votes in the Internet and telephone balloting supervised by the American Arbitration Association. That proved critical when American agreed to several contract enhancements late last week, including shortening the duration of concessionary contracts for pilots and flight attendants by four months and adding a wage bonus plan of up to 4.5% annually if AMR regains an investment-grade credit rating. The flight attendants union, however, didn't allow members to change votes because of a requirement in the union's constitution. Many flight attendants voted early, union officials said earlier, when anger over the contract cuts was running deep and the company's offer to sweeten the pot wasn't yet known. Flight attendants have been asked to cut their wages by 15.6% and reduce other benefits to save American $340 million a year in labor costs. The company has asked its workers for a total of $1.8 billion in annual savings over the next six years. American has said it will seek reorganization under the U.S. Bankruptcy Code if the tentative agreements aren't all ratified. Pilots voted 69% in favor of the contract concessions, which will cut their pay 23% on May 1 and improve productivity. The pay cut will revert to 17% after one year. Mechanics at American voted 52.6% in favor, and baggage handlers and other ground workers passed their concessions with 54.1% of the vote. Overall, the Transport Workers Union voted 53.3% to 46.7% in favor of the concessions. Separately, AMR's auditor, Ernst & Young LLP, raised doubt about the company's ability to continue as a going concern in its report on the company's financial statements. The report, included in the company's annual report filed Tuesday with the Securities and Exchange Commission, said the auditor issued the going concern doubt because of the company's recent history of "significant losses," negative cash flows from operations, uncertainty regarding its ability to reduce operating costs, the potential failure to satisfy the liquidity requirements in certain credit agreements, and its diminishing financial resources. --Dow Jones Newswires contributed to this report. Write to Scott McCartney at scott.mccartney@wsj.com1.
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