3.03.12 – (LAA) – Bankruptcy Update

Bankruptcy Update

March 3, 2012

In yesterday’s Negotiations Update American criticizes APFA for “opting” to attend an annual Board of Directors meeting and being insufficiently committed to reaching a consensual agreement. The company’s opinion has to be separated from the facts that actually comprise the events of the last several weeks. First, American claims that it is “negotiating” over its Section 1113 term sheet. Bargaining assumes flexibility not intransigence. A stance of “take or leave it” is rarely a formula for success. Yet that is precisely how the company is acting. In response to APFA’s proposals AA has just said “no” and not made a single counter-offer. Our “face time” with the company has indeed been short but that is attributable to American’s disinterest in discussing our proposals. Silence or unfairly debunking our ideas is not a constructive bargaining tactic.

APFA’s ability to make proposals depends in large part on having adequate information to determine what is truly necessary and fair and equitable. However, many of American’s responses to APFA’s information requests are incomplete, or have yet to be answered at all. For example, although we asked for American’s analysis of the cost difference between a pension freeze and termination weeks ago, we only received it late on March 2. A letter we e-mailed on February 22 detailing other inadequacies in American’s responses remains unanswered. In responding to our inquiry about the sacrifices management and non-represented employee will make, American has yet to identify the first penny these work groups will contribute. Instead the company has only indicated that changes will be made to their benefits and staffing that will purportedly equate to the requisite cost reductions. In contrast, the Flight Attendants, the Pilots and all the TWU-represented workers, American has specified every contract modification and calculated to the dollar their savings. Finally, we have yet to see a single analysis showing that the company’s demands are in line with the labor costs of its competitors.

Contrary to American’s claims APFA has responded to virtually all of the items in AA’s term sheet; and next week we will make other proposals assuming we have the necessary information and analysis. A consensual agreement is of course our objective, but if it is to be realized American must acknowledge that its term sheet is not written in stone but can and must be molded and transformed by creative and mutually beneficial solutions.

Finally, American’s criticism of the Negotiating Team choosing to attend a Board of Directors meeting is particularly ill-founded. American knows that membership ratification is essential to the success of these negotiations. In turn, if approval of a tentative agreement is to take place, we must meet with our leaders, keep them informed and respond to their questions and concerns.

By next week we hope American has provided complete responses to all our requests for information and has abandoned its “take or leave it” approach to negotiations. If they have done so, it is far more likely that we will achieve a consensual agreement.

In Unity,
Laura Glading