January 14, 2010

This week the American Airlines and Transport Workers Union Mechanic & Related negotiating committees resumed negotiations with Mediator Jack Kane. This was the first time to meet since the mediator requested the TWU to establish a smaller committee and the company bring additional M&E management to the session.

-So in other words their committee grew while ours shrank

On Wednesday, American gave the TWU a comprehensive proposal in response to the union’s table position from November 2008. The company’s proposal aimed to address the current state of both the airline and the industry while also addressing many of the union’s interests.

-they addressed very few of the unions interests, they only addressed things that benefited the company as well.

Since American’s last comprehensive proposal, the company has worked with the union in an attempt to narrow the issues and establish priorities. The company’s proposal offers some improvements aimed at recognizing the needs of our TWU-represented employees while also allowing American to better manage its labor unit cost and be competitive.

-So what they are saying is that we must remain at the bottom of the industry in pay so AA can pay its other work groups a wage that’s more in line with industry standard.

We look forward to continuing negotiations with the TWU at a later date to be determined and scheduled by Mediator Kane.

The proposal includes:

· Compensation: Provide lump sums each of the four years of the contract for an aggregate of 10 percent over the four years, beginning date of signing.

-This is a lie. Annual three percent lump sums do not add up to 10% in any way ever. If we get three percent of $70K in year one, and three percent in years two, three and four we still only got three percent of our total.

 The lump sums are convertible in whole or in part to structural increases to keep American’s relative standing in the industry for the maximum hourly rate for each of the employee classifications.

-This is also misleading. The committee was told that we would remain number 6 according to the companies charts, but if we are limited to a max of three percent increases then our standing will decline to the bottom.

· Holidays: Increase total number of holidays from five to eight by the second year of the contract. Increase holiday work rate of pay from one-half times to double time on date of signing. This brings American in line with the industry average.

-       Another lie, the current industry average is 8 only because we only have five. 10 is the most common. So when we move up to 8 we will still have less than most in the industry and the new average will be higher. We will still have the least amount of paid holidays.

· Sick Leave: Restore the 100 percent SK leave payment for the first two days of absence. In addition, modify the accrual rate to increase to eight days by the year after the date of signing, bringing American in line with the industry average.

-Another lie for the same reasons as above, we will still have the least amount of sick time in the industry and the 100% only brings us up to what the rest of the company has.

· Retirement Benefits: Provide a defined contribution 401(k) plan for new hires, making American more competitive in the industry. Only one AA competitor currently offers a defined benefit plan while others have terminated or frozen their plans. New Hires would be automatically enrolled in the $uper $aver Plus 401(k) plan to include a 100 percent company match for employee contributions up to 5.5 percent.

-Whenever the company uses the term “making American more competitive in the industry” and it relates to the employees it essentially means that AA will be giving you less than all the other airlines.

· Retiree Medical: American’s proposal guarantees access to coverage, regardless of employee health status – both before and after age 65 – but modifies the funding of those programs to better align American with the industry and corporate America.

o Pre-65 – Post-funding retiree medical premiums to match the current management rate of 25 percent of retiree medical plan costs.

o Post-65 – A company sponsored, guaranteed issue, employee paid Medigap plan will be available to replace the current age 65 and over plan. 100% of premiums to be paid by retiree.

o New Hires – Pre-65 retirees will have access to retiree medical coverage. Post-65 retiree coverage will be replaced by a company sponsored, guaranteed issue, employee paid Medigap plan. Retirees will receive no company subsidy and pay 100 percent of the premium.

o Pre-funding balances – Balances will be refunded as part of the proposal

-Yet another of AAs broken promises,they took our money for the last twenty years and now they want to renege on the deal.

· Profit Sharing: Replace the current financial component of the AIP plan with an uncapped annual profit sharing plan rewarding employees at the first dollar earned and matches the richest plan in the industry.

-       So they want to take away the AIP which has paid out money to enhance a Profit Sharing plan that hasn’t.

· Workrule Changes: Modify workrules where American has a competitive disadvantage in order to provide the operating management with more flexibility and to increase productivity. Areas of interest include the American/American Eagle ASM letter, Title II mechanic station staffing and overseas maintenance at international AA locations.

-They want to reduce our workforce here and increase it overseas. They also want to increase Eagle and reduce AA headcount.