Congressman: AMR may have deal

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NEW YORK (CNN/Money) - Union and management negotiators at American Airlines have reached agreement on a framework to keep the company out of bankruptcy, but both sides need to win approval from their respective boards, according to a congressman who brought the two sides together.

Rep. Martin Frost, D-Texas, said Thursday the agreement was reached late Wednesday night after 12 hours of meetings between the presidents of the three major unions at the airline and top management of American. He did not know any of the details of the deal, which was reached after he and three other congressmen left the meeting earlier Wednesday, but he said representatives of both sides told him of the agreement.

Frost said it is not at all clear that the union presidents can win the approval of their boards of directors for the deals. And he said the board of directors of American Airlines parent AMR Corp. (AMR: Research, Estimates), which is meeting Thursday in Dallas, also is weighing a possible bankruptcy filing as well as the agreement that was worked out.

"Management conveyed if they didn't have certainty that things are settled with the unions, they will be looking at bankruptcy," Frost said.

Spokesmen for American Airlines and the Transport Workers Union, which represents American's ground workers, were not immediately available for comment on Frost's statement. George Price, spokesman for the Association of Professional Flight Attendants, and David Dominy of Allied Pilots Association had no comment on Frost's statement. The pilots' Web site did say its board of directors is meeting Thursday.
 
The three unions ratified concession labor pacts last week that would save the airline $1.6 billion a year over the next six years, which were central to the company's efforts to cut labor costs by $1.8 billion annually and return to profitability.

But when the unions found out that management had approved retention bonuses and pension guarantees for the airline's top executives, they threatened to pull out of the labor deals. Management dropped the retention bonus plan Friday, but the APFA and the TWU have said they will poll their members again on the contracts, causing a delay that could force the world's largest airline to file for bankruptcy protection. The concessions had been due to take effect May 1.

Wednesday's meetings took place the same day AMR announced a first quarter loss of $1.05 billion, which was almost twice the year-earlier loss and larger than analysts' consensus forecast.

Frost said the possibility of AMR Corp. Chairman Don Carty resigning due to union outcry was brought up at the meeting, but that Carty's departure was "never laid out as a requirement for deals."

The Wall Street Journal and Dallas Morning News have reported that some members of the AMR board want Carty to resign because they believe they, too, were misled into believing the unions had been fully briefed on the controversial executive compensation packages. Frost said that while there is a lot of union hostility to Carty, he believes he can still work with the unions.

"Prior to these recent disclosures, Carty had a good relationship with these unions," Frost said. "The mood [at Wednesday's meeting] was constructive. They all wanted to avoid bankruptcy. The question is if company could now put something else on table that would lessen the ill will and stop the unions from holding new ratification votes." Frost said that one thing the unions wanted to explore Wednesday was not having the contracts last six years.

The Wednesday meeting including Frost and three Republican congressmen from Texas, home of AMR Corp., as well as the unions. Frost said that he and the congressmen were acting as facilitators, not mediators.

"I have a good relationship with both sides. I tried to play the role of honest broker, get the sides together to talk," Frost said. "We at least were able to do that. We'll have to see how it turns out."

Frost said the future of American will probably be known Thursday. "I think there will be a resolution one way or another today," he said.
 

tonyw

Well-Known Member
Does the agreement include getting rid of the special pensions for the so called "talented" executives who have steered their company to the edge of bankruptcy and dumping the man who came up with the idea? Of course, dumping him will result in him taking a fat golden parachute, so I guess that won't do anything useful.
 

Kristie

Mama Bear....
Staff member
[ QUOTE ]
Does the agreement include getting rid of the special pensions for the so called "talented" executives who have steered their company to the edge of bankruptcy and dumping the man who came up with the idea? Of course, dumping him will result in him taking a fat golden parachute, so I guess that won't do anything useful.


[/ QUOTE ]

apparently, Don Carty just resigned... and since he resigned, he probably will get his retirement and big fat bonus... they should have known that he'd probably do that and fired his ass before he could resign...


smart little sh*t huh!! :)

although, he probably won't find such a cooshy or high paying job like this again.
 

A320_DUDE

Well-Known Member
[ QUOTE ]
although, he probably won't find such a cooshy or high paying job like this again.


[/ QUOTE ]

He'll probably end up the CEO of Air Canada
 
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