American Workers Tighten Belts … On Management


American Airlines workers nearly got all the pain and the company’s top managers got the gain after unions agreed to massive concessions in a bid to keep the airline out of bankruptcy. Union leaders said it’s unlikely their members would have voted in favor of salary and benefit cuts of $1.8 billion had they known that fat bonuses and pensions were intended for the company’s top executives. “We are appalled and just disgusted,” John Ward, president of the flight attendants’ union, told the Associated Press. “It’s the equivalent of an obscene gesture from management.” The revelation caused such upheaval that American Friday dropped the bonus plan. Initially defended by company spokesman Bruce Hicks, the bonus and pension plans were said to be the cost of doing business at that level. “Retention benefits are designed to keep key senior management who are constantly being wooed by other companies …” said Hicks. Under the plans, the six top managers would have received retention bonuses that double their salaries provided they stay with American through January of 2005. The airline is also funding 60 percent of a pension fund trust for 45 senior staff. Meanwhile, non-flying staff are taking 16-percent wage cuts and pilots are losing 23 percent of their salaries to keep the airline out of bankruptcy. The union staff says they didn’t know about the management perks until American put them in a Securities and Exchange Commission filing made right after the concessions were ratified. “This … leaves the issue to us whether they were actually bargaining in good faith,” said James C. Little, president of the Transport Workers Union.