TWU

The TWU-represented Stores workgroup voted to ratify its tentative agreement on August 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 our 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 Stores Implementation Schedule

• Annual, Permanent Cost Savings: 17 percent of total salary and benefits costs
• Provides pay increases throughout the life of the agreement, including a 3.5% increase on date of signing (effective Sept. 12)
• Reduces workforce by approximately 215 positions
• Changes with the Mechanic & Related workgroup will have a direct impact on job reductions anticipated for Stores
• Modifies work rules to improve productivity and efficiency
• Allows for flexibility to schedule work on weekends without restriction (effective Sept. 13)
• Eliminates the ASM cap (effective Sept. 12)
• 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)
  
  

Rationale

• Modifying work rules allows for improved productivity and efficiency, thus lowering the overall cost to perform in-house aircraft maintenance. This ensures we are better positioned to meet operational needs and allows us to maintain our Material Logistics Specialists’ (previously Stock Clerks’) competitive pay rates.
• Outsourcing allows us to run a maintenance operation with a cost structure better aligned with the industry as a whole, while still preserving key in-house maintenance functions.
• Eliminating the ASM cap from all TWU contracts lets American optimize its network and schedule. We will 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.