American: an Airline with Baggage

By Ken Silverstein

Back in 2003, when the airline industry was still reeling from 9/11, American Airlines CEO Gerald Arpey called on workers to make sacrifices and promised that company executives “would share the pain and share in the gain.” Workers agreed to take pay cuts to keep the airline out of bankruptcy and during the past few years American's stock price has soared. Last year, the airline made a profit of $231 million.

Now it was time for both sides to “share in the gain.” Executives did their share, announcing earlier this month that 875 senior and midlevel managers would be awarded stock shares worth about $177 million. After learning about the payout to higher-ups, the Transport Workers Union (TWU) representing American employees asked the company to make some sort of bonus payment to workers and hourly employees. But it seems there just wasn't any additional money to go around, and so the workers got stiffed.

What's especially galling about all this is that American took out full-page ads in many newspapers this month, hailing its “groundbreaking business relationship” with the TWU that has “allowed American to generate outside business for its maintenance department,” according to a story in the Kansas City Star. The story says that “work rules were changed to create a more cost-efficient operation” at three maintenance bases. This has already netted the firm $500 million at its Tulsa facility alone.

“We have one path of working together and cooperating, but there's also traditional labor relations and bargaining,” Roger Frizzell, American's vice president of corporate communications and advertising, told the Star. “We're going to have issues we don't agree on, but overall the work we're doing together is a win-win situation.” In other words, American expects cooperation when it comes to workers making sacrifices, but on “traditional” matters like salaries and benefits, the company will be as hard-nosed as ever. Win-win.

This is a fairly stunning level of hypocrisy. “The greed of the company's managers is putting America's hardest working families in jeopardy,” says an online petition being circulated by the TWU. “Top executives should not take millions when employees made personal sacrifices to save the company from bankruptcy and still have not had their wages and benefits restored.” So far, more than 16,000 people have signed the petition.