The TWU Mechanic & Related workgroup voted to ratify its tentative agreement on Aug. 8, 2012. This ratification is an important step forward and provides American the cost savings necessary to be successful, while providing employees additional pay raises, an adjustment to industry pay rates after three years, and changes in active medical benefits.
This compromise demonstrates American's commitment to its people and the negotiations process, and also shows the TWU's efforts to collaborate in order to move forward and refocus our energy on building the new American.
Now we have court approval on the ratified agreement and can begin implementing the changes that will allow us to operate a more efficient, competitive airline.
All Employee Restructuring Objectives
- Reduce employee costs
- Our approach to employee savings is focused on preserving base pay rates as much as possible by increasing productivity or relying on outsourcing
- Implement universal changes to active and retiree medical for current employees (effective 2013 open enrollment)
- Remove and relax restrictions on business
- Remove structural barriers that limit flexibility and ultimately growth
- Replace pension benefit with a Defined Contribution Benefit (effective Nov. 1)
- Implement new first-dollar profit sharing plan (effective Sept. 12)
Overview of Mechanic & Related Implementation Schedule
- Annual, Permanent Cost Savings: 17 percent of total salary and benefit costs
- Provides pay increases throughout the life of the agreement, including a 3.0% increase on date of signing (effective Sept. 12, 2012; increases will begin showing in employee pay checks October 12, 2012)
- Reduces workforce by approximately 2,400 positions, with proposed scope changes preserving approximately 1,800 jobs that would have been outsourced in the original term sheet
Operations at the Alliance Maintenance Base will wind down by the end of the year, affecting approximately 1,090 positions. With the exception of the TAESL operation, the base is scheduled to close in April 2013.
- Work at TAESL will continue with 500-600 TWU-represented American employees
- Job reductions of as many as 900 positions in Tulsa (will occur in a phased approach as specific lines are outsourced)
- Job reductions of approximately 440 positions in the Line Maintenance organization
- Modifies ability to utilize OSMs at the Base operations
- Flexibility to outsource as much as 35 percent of aircraft-related maintenance spend
- Modifies work rules to improve productivity and efficiency
- Outsources specific Facility, Automotive and Plant maintenance work
- Allows for flexibility to schedule work on weekends without restriction (effective Sept. 13)
- Eliminates the ASM Cap (effective Sept. 12)
- Reduces max vacation of 30 days by one week (employees will receive 25 days for 2013)
- Eliminates system and station protections (effective Sept. 12)
- Offers an early-out incentive (eligible employees have until Sept. 25 to sign up for the incentive plan)
- Outsourcing allows us to run a maintenance operation with a cost structure better aligned with the industry as a whole, while still preserving some key in-house maintenance functions.
- For the work we maintain in-house, we have changed current work rules to give us the flexibility to operate in the same manner as a Maintenance, Repair and Overhaul (MRO) facility at a similar cost structure.
- Eliminating the ASM cap from all TWU contracts will let American optimize its network and schedule. We would be able to improve the use of our regional network by allowing mainline jets to be redeployed for new opportunities and to place smaller jets on lower demand flights.