by Glenn Jones DWH TWU Local 565 Section Chairman

The saying goes, that a chain is only as strong as its weakest link. Production companies can onFree Maintenance for American Airlines! The saying goes, that a chain is only as strong as its weakest link. Production companies can only produce as much as its slowest subassembly line (weak link). A faulty joist can cause a house to fall. And for the union, the weakest link seems to be the strongest quality of the individual AMT- his sense of can do.

This sense of can do that is found in all of us American Airlines AMT’s is the weak link in our negotiations with the company; and management knows and exploits this to the fullest.

 When was the last time, during a PS inspection you tightened a bolt and nut, changed a light bulb or installed a missing screw into a panel, without making a write-up because you knew by writing it up, it would take 3 times as long, than just doing the minor corrective action alone. How many times have you found yourself balancing precariously on a ladder, reaching for that last bolt or screw to tighten, instead of getting down and moving the ladder? How many times have you forgone the computer before doing a job because you have done the same job numerous times before?

These are just some of the actions a “Can Do” AMT performs without hesitation or thought. It is in his DNA. He knows it is the right thing to do; safety of the aircraft is always on her/his mind. And for that I do stand up and salute my fellow AMT’s. GREAT JOB TO ALL OF YOU! But beware.

These same undocumented minor fixes not only go against federal regulations (beware you can be fined), these undocumented minor fixes provide the company FREE maintenance. That’s right FREE! Undocumented work is just that, undocumented and know one will know except you. Talk is cheap, put it in writing!

With more and more rules and regulations being handed down and constantly changed, the lonely AMT almost needs his own secretary to know what is going on. Eye protection, fall protection, chemical cleaners not to use, new and improved procedures, AD’s, part numbers, torque values, pulling up the proper paperwork for the job, gathering the proper equipment, performing the maintenance task, cleaning of your area, hazardous waste disposal, SIDA Badge regulations, local company rules; the list goes on and on and on. With all this and more to know and abide by, it leaves the lonely AMT with less and less time to do maintenance in an 8 hour shift. And this is where the short cuts start to happen, the giving away of maintenance; undocumented work.

Whether management sees or knows all of what is going on, I’m am not going to argue that because they know. But what I will argue is for my fellow AMT‘s to stop giving away free maintenance. Document what you have done. By documenting you are telling your supervisor and upper management what you as an AMT are doing on a daily/weekly bases. By documenting your work, you are justifying your time as to why the same task can take longer than normal sometimes. By documenting your work, you are justifying your right and need for fair negotiations with the company.

Write these small discrepancies up .Get the proper paper work from the computers. Revue safety procedures so you are not put into bad positions because you do not know. These small tasks we do now makes us all strong later on.

Remember, you are responsible for being in the know. And you are getting paid for what you know, not just what you do. Take the proper time and do it by the Book!

Glendon Jones Hangar 5 Section Chairman

Differences Between the Texas Democratic Platform &

Republican Party of Texas

The text below contains language directly quoted from the TDP & RPT platforms.

EDUCATION

Texas Democratic Party Platform (TDP)

Solve the Dropout Crisis

“Proper funding of all our schools to meet the

needs of students who are most at risk of

dropping out is essential. Specific solutions

include:

• school-community collaboration that

brings educational and social services

together under one roof to help at-risk

students and their families;

• expanded access to early childhood

education, targeting at-risk students;

• dual-credit and early-college programs

that draw at-risk students into college

and career paths while still in high

school;

• equitable distribution of highly qualified

teachers, to change current practices

that too often match the most at-risk

students with the least experienced and

least prepared teachers;

• enforce daytime curfew laws to reduce

truancy; and

• providing access to affordable programs

for adults who have dropped out of the

education process.”

Republican Party of Texas Platform (RPT)

Ignore the Dropout Crisis

[Nothing]

TDP… Maintain Class Size Limits

“To make public education our highest priority,

we believe the state should…enforce and

extend class size limits to allow every student

to receive necessary individualized attention.”

RPT… Eliminate Effective Class-Size Limits

“Create flexibility for school districts under the

class size limit mandate.”

TDP… SBOE: Put Experts in Charge of Curriculum

“Any substantive changes to curriculum must

be reviewed by non-partisan experts, and that

review must be made public prior to any

changes in curriculum by the State Board.”

RPT… SBOE: Put Ideologues in Charge of Curriculum

“The SBOE must have sole authority over all

curricula content and state adoption of

educational materials and ancillaries,

(regardless of methods of delivery, including

but not limited to textbooks, laptops and

electronic delivery systems.”

TDP… Support Pre-K & Early Childhood Development

“To make public education our highest priority,

we believe the state should provide universal

access to pre-kindergarten and kindergarten.”

“Proper funding of all our schools to meet the

needs of students who are most at risk of

dropping out is essential. Specific solutions

include…expanded access to early childhood

education, targeting at-risk students.”

RPT… Oppose Pre-K & Early Childhood Development

“We believe that parents are best suited to

train their children in their early development

and oppose mandatory pre-school and

Kindergarten. We urge Congress to repeal

government sponsored programs that deal

with early childhood development.”

Provide Necessary Public Education Funding

Texas Democrats believe:

• the state should establish a 100%

equitable school finance system with

sufficient state revenue to allow every

district to offer an exemplary program;

• the state should equitably reduce

reliance on “Robin Hood” recapture;

• state funding formulas should fully

reflect all student and district cost

differences and the impact of inflation

and state mandates.

Provisions that Restrict Education Funding

“We urge the Legislature to abolish property

taxes for the purpose of funding schools.”

“The Party calls upon the Texas Legislature to

repeal the revised franchise tax.”

Oppose School Vouchers

“We believe the state should oppose private

school vouchers.”

TRP

Support Tax Dollars for Private Schools

“We encourage the Governor and the Texas

Legislature to enact child-centered school

funding options – which fund the student, not

schools or districts – to allow maximum

freedom of choice in public, private or

parochial education for all children.”

HEALTH CARE

Texas Democratic Party Platform Oppose Republican Attempts to Repeal Rights

of Health Care Reform

“Texas Democrats:

• oppose Republican attempts to repeal

the ban on preexisting conditions;

• oppose Republican attempts to repeal

sweeping small business tax credits;

• oppose Republican attempts to repeal

the ban on rescissions, where insurance

companies shove individuals off their

health insurance coverage if they

develop a catastrophic illness;

• oppose Republican attempts to repeal

tax breaks for Americans to aid in the

purchase of health insurance;

• oppose Republican attempts to repeal

the closure of the Medicare prescription

drug donut hole that forced seniors to

pay exorbitant prices under the

Republican Medicare Part D plan;

• oppose Republican attempts to repeal

the expansion of health insurance to

uninsured Americans, including 4 million

Texans;

• oppose Republican attempts to repeal

the ability of parents to insure their

children up to age 26;

• oppose Republican attempts to repeal

the creation of health insurance

marketplaces where consumers can

shop for and compare affordable,

quality health insurance plans; and

• oppose Republican attempts to repeal a

healthcare system based on prevention

and wellness.

RPT… Repeal Rights of Health Care Reform

“We urge the Congress to defund, repeal, and

reject the national healthcare takeover, also

known as “ObamaCare” or any similar

legislation.”

JOBS & ECONOMY

Texas Democratic Party Platform

Raise the Minimum Wage

“To improve wages and working conditions, we

believe the minimum wage must be raised,

enforced, and applied across-the-board

meaningfully to restore lost purchasing power

of all workers. It must be indexed to keep it

from eroding again. Employees should be paid

a living wage with provisions for decent health

care and retirement benefits.”

RPT… Repeal the Minimum Wage

“We believe the Minimum Wage Law should

be repealed.”

DPT… Oppose Sales Tax Extension and Increases

“Enact a constitutional amendment to prevent

extending the sales tax to food and medicine

and oppose efforts to impose a national sales

tax.”

RPT… Increase & Expand Sales Tax

“We recommend a national sales tax.”

“We urge the Legislature to abolish property

taxes for the purpose of funding schools and to

shift the tax burden to a consumption-based

tax while maintaining or reducing the overall

tax burden.”

SOCIAL SECURITY

Texas Democratic Party Platform

Protect and Preserve Social Security

“We oppose privatization of the Social Security

program as fiscally irresponsible, and consider

the use of our tax dollars as capital to invest in

the stock market as a threat to the income

security of working Americans.”

RPT… Privatize Social Security

“We support an immediate and orderly

transition to a system of private pensions

based on the concept of individual retirement

accounts, and gradually phasing out the Social

Security tax.”

INSURANCE

Texas Democratic Party Platform

Reform Insurance Regulation; Roll back Rates

“Texas Democrats support the strict

enforcement of policies requiring insurance

companies to roll back their rates to provide

Texas homeowners, renters and drivers fair and

affordable insurance.”

“We support providing the Insurance

Commissioner the authority to deny or approve

rates.”

“Democrats support measures to reduce and

eliminate unfair underwriting and rate setting

practices, such as the use of credit scoring,

redlining and other discriminatory practices.

We support the enforcement of penalties when

such practices are used. Texans must have

access to affordable insurance to protect our

homes and businesses from flood and

windstorm damage. We also support more

thorough oversight and regulation of

homeowner’s insurance through greater

consumer representation in the form of an

official advisory committee or requirements

that the Insurance Commission include

consumer representatives.”

RPT… No Regulation of Insurance Rates, Companies

“Free Market for Utilities and Insurance – We

encourage free market solutions for providing

utilities whenever possible. We support that all

property insurance rates should be set through

free-market forces alone. We support efforts

to shrink the Texas Insurance Association to

reduce the liabilities it imposes on state

taxpayers.”

UTILITIES

Texas Democratic Party Platform

Responsible Regulation of Utilities

“Texas Democrats support responsible

regulation of utilities to provide a level playing

field for regulated industry, through reasonable

policy to prevent predatory pricing. Texans

should not be expected to become experts on

all the factors that determine energy costs in

order to pay lower, reasonable prices for utility

services.”

RPT… No Regulation of Utility Rates, Companies

“Free Market for Utilities and Insurance – We

encourage free market solutions for providing

utilities whenever possible. We support that all

property insurance rates should be set through

free-market forces alone. We support efforts

to shrink the Texas Insurance Association to

reduce the liabilities it imposes on state

taxpayers.”

IMMIGRATION

Texas Democratic Party Platform

Oppose State Law That Could Deny the Rights

or Endanger the Safety of Citizens

“Texas will not become Arizona, and we

strongly oppose…any law that would…

• through its enforcement, result in

discrimination; intimidation or

victimization of citizens based on their

race, ethnicity or appearance;

• force law enforcement agencies to

divert limited resources and manpower

from their primary duty to protect

citizens and prevent crime.”

RPT… Create a New State Offense for “Illegal Aliens”

“Create a state offense (Class A misdemeanor)

for an illegal alien to intentionally or knowingly

be within the State of Texas.”

“We support…empowering state and local

law enforcement agencies with authority and

resources to detain illegal immigrants.”

VOTING RIGHTS

Texas Democratic Party Platform

Protect Voting Rights for All Texans

“We support redistricting standards and

practices that demand compliance with the

Voting Rights Act, discourage savaging regions

and communities for partisan gain, and

preserve the constituent-representative

relationship to the extent possible to give

voters the right to elect their representatives

instead of letting representatives pick their

voters.”

RPT…  Eliminate Minority Voting Districts

“We oppose any identification of citizens by

race, origin, or creed and oppose use of any

such identification for purposes of creating

voting districts

by John Hewitt, Negotiating Team Member

The Table Committee met with the Mediators and Company December 14 – 17. Members of the Table Committee are J.R. Ruiz (LAX), Vinnie Argentina (NY), Bob Owens (NY), Larry Pike (AFW), John Carlisle (TUL) and John Hewitt (TUL).

Being this was my first exposure to the negotiating table, I can tell you my vision of negotiations was a little different than real life. We are not only dealing with the Company, we are also, dealing with the Mediator. Since we are in “mediated negotiations” under the Railway Labor Act, we don’t necessarily get to discuss articles of the contract in the order that we choose. Read more at twu565.wordpress.com  Instead, the mediator has the authority to set the agenda and order in which both sides discuss open issues.

The Tentative Agreement was voted down. That means the Whole TA was voted down and all articles need to be TA’d again. So our first task was to TA the articles that could be agreed to without any revision. After that we took care of articles that needed minor changes in order to be agreed to.

The session on Friday, December 17, around Noon, as planned.

We have a dialogue started with the company, which is an important first step since the rejection of the Tentative Agreement. As much as we wanted to put monetary articles on the table, the Mediator felt a different direction was better. He told us that the normal approach in RLA mediation is to resolve the non compensation issues before taking on the core economic issues and that is how he wants to handle matters. We are hopeful about discussing money articles in the near future.

Our next session has been scheduled for the week of January 10, where we will be leading off with Article 12.

United launches perfect attendance program for employees

by khou.com staff khou.com Posted on December 15, 2010 at 5:17 PM HOUSTON—

United Airlines is launching a perfect attendance program to recognize United and Continental employees for their dependability and their contributions to the company. The new program will begin on January 1. Employees with perfect attendance for six months will be eligible to participate in an annual drawing to win a new car, with the company awarding 11 new cars annually. Also, employees will be eligible for a rolling six-month attendance award of $50 cash, a $50 donation to United’s employee relief fun on the award-recipient’s behalf or 5,000 frequent flier miles. “We want to make sure that everybody is focused on running a clean, safe and reliable airline,” President and CEO Jeff Smisek said in a bulletin to employees Wednesday. “Perfect attendance helps United provide consistent, reliable service to customers, and it also reduces our costs.” Before its merger with United, Continental Airlines had a perfect attendance program in place for more than a decade.

Search Department of Labor LM2 Report



Article from the AP…

WASHINGTON (AP) — President Barack Obama scheduled a short-notice news conference Tuesday to sell a new tax cut compromise that makes big concessions to Republicans as the White House scurried to assuage angry Democrats.

Vice President Joe Biden traveled to the Capitol to lobby senators as liberal groups attacked the proposal that would extend Bush-era tax cuts for all Americans, including the richest, for two years. They argued that Obama had abandoned a long-held position in fashioning the compromise.

Obama promised in his 2008 campaign — and many times since — that these breaks would be continued only for the middle-class. But some in his own party and liberal groups attacked it, and even the Democratic leadership in Congress gave it a cool, noncommittal reception.

Obama’s question-and-answer session was scheduled to take place before a closed House Democratic caucus, where liberal lawmakers were all but certain to lambaste it.

Besides holding current tax rates in place for all, the proposal would extend unemployment benefits and reduce payroll taxes for a year, which would help many lower-income Americans.

The liberal group MoveOn said its 5 million members oppose the plan, saying the wealthiest Americans don’t need tax cuts that were scheduled to expire this month. “The president’s commitment to bipartisanship should not mean leaving principles behind,” MoveOn said.

Biden urged congressional Democrats to quickly embrace the plan, saying Congress needs to move on to other issues before the Democrats lose control of the House in January.

House Speaker Nancy Pelosi said the compromise plan shows that Democrats want to help low- and middle-income workers while the GOP’s chief concern is the wealthiest Americans.

“We will continue discussions with the president and our caucus in the days ahead,” Pelosi, D-Calif., said in a statement issued 18 hours after Obama laid out his plan.

Top Democratic staffers speculated that, for now, more than half of House Democrats seem inclined to oppose the plan. Republican aides said many GOP members probably would back it, because it grants their chief goal of extending income tax cuts for all Americans.

Obama has said that he still prefers to let the tax cuts expire for households earning more than $250,000 a year. Obama, while acknowledging Democratic unrest, agreed to extend all the tax breaks for two years, noting that Republicans wanted a permanent extension.

Obama said Monday the concession was the only way to prevent a congressional impasse that would cause the tax cuts enacted in 2001 and 2003 to expire, as scheduled, for all taxpayers. With 9.8 percent of Americans unemployed, he said, that would be “a chilling prospect.”

Liberal groups were furious at his willingness to bend, but Obama said he rejects “symbolic victories” that hurt average Americans.

His plan also would renew jobless benefits for the long-term unemployed, and grant a one-year reduction in Social Security taxes paid by workers but not by employers.

The president had barely stopped speaking Monday before top Republicans applauded his proposals, while most Democrats kept a sullen silence.

Senate Minority Leader Mitch McConnell, R-Ky., thanked Obama for “working with Republicans on a bipartisan plan to prevent a tax hike on any American and in creating incentives for economic growth.”

Because they hold solid majorities in both chambers, Democrats must provide many votes for the tax package to become law, even if Republicans overwhelmingly support it.

Some Democrats quickly denounced the plan. “Senate Republicans have successfully used the fragile economic security of our middle class and the hardship of millions of jobless Americans as bargaining chips to secure tax breaks for the very wealthiest among us,” said Sen. Tom Harkin, D-Iowa.

Urging his colleagues to quickly back the compromise was Sen. Joe Lieberman, I-Conn., who caucuses with the Democrats. “This tentative agreement is an example of Washington working across party lines to confront the challenges facing our nation,” said Lieberman, who is up for re-election in 2012.

The emerging agreement includes tax breaks for businesses that the president said would contribute to the economy’s recovery from the worst recession in eight decades.

The proposed Social Security tax cut would apply to virtually every working American. For one year they would pay 4.2 percent of their income, instead of 6.2 percent, to the government retirement program, fattening U.S. paychecks by $120 billion in 2011.

Someone earning $40,000 a year would receive a $800 benefit, and a $70,000 earner would save $1,400, officials said. More than three-fourths of all Americans pay more in these so-called payroll taxes than in federal income taxes.

The White House said money from other sources would be shifted so the Social Security trust fund loses no revenue.

Obama said he reluctantly made another concession to Republicans, concerning the estate tax. It would tax estates worth more than $5 million at a rate of 35 percent, a GOP goal. Democrats favored a $3.5 million threshold, with a 45 percent tax on anything higher.

Obama’s willingness to compromise with Republicans comes a month after the GOP won resounding victories in congressional, gubernatorial and state legislative elections.

Addressing his liberal critics Monday, Obama said, “Sympathetic as I am to those who prefer a fight over compromise, as much as the political wisdom may dictate fighting over solving problems, it would be the wrong thing to do.”

“I’m not willing to let working families across this country become collateral damage for political warfare here in Washington,” he said.

Under his plan, unemployment benefits would remain in effect through the end of next year for workers who have been laid off for more than 26 weeks and less than 99 weeks. Without an extension, 2 million individuals would have lost their benefits over the holidays, the White House said, and 7 million would have done so by the end of next year.

Obama’s proposal also would extend a variety of other tax breaks for lower and middle-income families, including the Earned Income Tax Credit and the child tax credit.

Associated Press writer Julie Pace contributed to this report.

Sunday, 08 June 2003 

This article from the Dallas Morning News suggests that Gerard Arpey was the architect behind American’s 2003 restructuring plan. The article further points out that the key behind this “strategy” was to get the unions to help promote the company’s position by incorporating a technique the company refers to as “active engagement.”

Jun. 08, 2003

Arpey predicted American’s predicament

By Trebor Banstetter

Star-Telegram Staff Writer

FORT WORTH – Gerard Arpey couldn’t have made his case more strongly: “One of the greatest threats confronting the established carriers today,” he wrote, “is competition from low-cost, highly productive” airlines such as Southwest.

It could have been an excerpt from American Airlines’ 2002 annual report, a year when the carrier lost $3.5 billion amid stiff competition from discounters.

But Arpey, who recently became American’s chief executive, wrote those words 20 years earlier — in a 1982 dissertation he submitted for his master’s degree in business administration at the University of Texas at Austin.

At the time, the industry was newly deregulated, and the major airlines were still adapting to the changing environment. Low-fare king Southwest Airlines had just begun adding flights outside of Texas, and the industry “was in a panic” over the emerging, low-fare airlines, said consultant Michael Boyd of the Boyd Group of Evergeen, Colo.

“It was almost like the Red Scare of the 1950s,” Boyd said. “It was the low-fare scare.”

In his thesis, The Airline Industry in Transition — from Regulation to Deregulation, Arpey outlined a long-term strategy he believed that the established carriers could use to adapt to the growing competition and survive in a low-fare environment.

Arpey concluded that the major carriers should focus on reducing labor costs and increasing productivity to better compete with low-fare carriers. He also wrote that airlines should increase the efficiency of their aircraft fleets and adjust routes.

And he recommended that airline executives win the cooperation of union members by warning them about the poor financial state of the industry, and use other failed carriers as an example of what would happen if changes weren’t made.

For the most part, American and other big carriers didn’t adapt, and discounters continued to expand and acquire market share for two decades.

But today, the big airlines are restructuring to meet low-fare competitors head on. And American’s turnaround strategy — crafted last year with Arpey’s close involvement and now under his complete control — bears a remarkable resemblance to the steps he recommended as a 23-year-old business student in 1982.

Though all of the major airlines have cut costs to some extent, American was the first out of the gate last year and has been the most aggressive. It has slashed $4 billion in annual expenses through steep labor concessions, cutting flights, by smoothing out schedules at its hub airports and by retiring nearly 100 airplanes.

Many industry analysts have lauded the strategy as a model for reshaping a traditional carrier.

“The company has set the stage for a recovery,” said analyst Ray Neidl of Blaylock & Partners in New York. “With the right cost structure, it should be a tough competitor.”

But others caution that cost-cutting alone might not be enough to save the large carriers. Traffic remains weak, the airlines are still saddled with enormous debt loads, and their ability to borrow more money has been sharply curtailed.

“Continued cost progress is imperative, as is industry recovery and access to capital,” said analyst Jamie Baker of J.P. Morgan Securities. “Lacking any of of the three likely results in a Chapter 11 challenge by this time next year.”

American has also resisted some of the bold actions taken by Delta Air Lines. Delta decided to take on discount carrier JetBlue by launching a low-fare unit called Song, which not only challenged JetBlue on East Coast routes but echoed the discounter’s laid-back style.

Delta has also dramatically increased its use of cost-efficient, regional jets, particularly at Dallas/Fort Worth Airport, where the Atlanta-based carrier operates a small hub.

Arpey, who declined to be interviewed for this article, has shown little interest in the “airline-within-an-airline” concept. Though American plans to ramp up its use of regional jets, it hasn’t yet launched an initiative to match Delta’s.

American also chose not to file for bankruptcy earlier this year, unlike its rival United Airlines. Although bankruptcy can be a “horrible and costly” process, said William Warlick, a bond analyst with Fitch Ratings in Chicago, avoiding it may leave American at a permanent cost disadvantage on items like aircraft leases and debt service costs.

Under Arpey, American has introduced some innovations, such as a $299 walk-up fare from JFK International Airport in New York to three California destinations. And he recently reversed American’s “More-room-in-coach” campaign on 25 percent of its aircraft.

But, like Carty before him, Arpey’s chief focus is on slashing costs — something the major airlines have been unable to do on a large scale until now.

Consultant Boyd said American and other executives talked endlessly about adapting to low-fare competitors during the 1980s. They were unable to make significant cost reductions, however, because of labor battles and a continued focus on business travelers, which requires more expensive operations to reduce connection times.

“It’s one thing to say it, and another thing to do it,” Boyd said. “It may have taken a catalyst like 9-11 to really bring change to this industry.”

Growing threats

In the early 1980s, discount carriers were just beginning to emerge as a industry force. Southwest, New York Air and People’s Express offered no-frills, cheap flights for people who couldn’t afford the expensive fares on big carriers like American or United.

But at the time, the discount carriers were still minor players. For example, in 1982, American Airlines carried 12 times more passengers than Southwest, according to the Air Transport Association.

Last year, American had just three times more passengers than Southwest, and the Dallas-based discounter now competes with American on more than 85 percent of its routes, according to American officials.

Arpey, however, recognized that the low-cost operating structure of these carriers had the potential to make them aggressive competitors on a national scale.

“Because of their comparatively low cost structures, [discount carriers] can charge fares well below the level at which [major airlines] can operate profitably,” he wrote in his thesis.

The discounters had steep advantages in labor costs, productivity, cost-efficient city-to-city route structures and no-frills marketing, he said. He predicted that the established carriers would eventually have to change dramatically to compete against the new wave of nimble, cost-efficient upstarts.

“As these new carriers grow and continue to gain market share, it is clear that the existing carriers will have to adapt to the new cost structures against which they must compete,” he wrote.

Bob Crandall, who headed American when Arpey was hired, said the young executive’s analytical abilities were evident early and helped distinguish him as someone who had the potential to climb to senior management.

“His analytical ability is one of his greatest strengths,” Crandall said. “He’s a good analyst, a good communicator and very comfortable with numbers and statistics.”

Arpey never forgot the central tenet of his graduate paper. He repeatedly warned analysts of the low-fare competition during the 1990s, when he was a fast-rising American executive, and accurately predicted that discount carriers would eventually expand into long-haul markets to challenge the major airlines.

“Southwest may be offering better value” than American, Arpey said during a 1992 conference with airline industry analysts, suggesting that American come up with a strategy to compete in those markets.

And in 1994, he said that “it’s just a matter of time before the Southwests of the world and new-entrant carriers get into long-haul markets.” Today, lengthy transcontinental routes are the area of fastest growth among discounters like Southwest and JetBlue.

American did attempt to bring its costs down at various times during the past two decades through tough labor negotiating or operational changes, but none of its efforts persisted.

By the late 1990s, the carrier had among the highest costs in the industry and spent billions buying bankrupt airline TWA. Southwest, meanwhile, retained its efficient structure.

When the economy slowed, and high-paying business travelers vanished, American stumbled into the worst losses in the carrier’s history.

Strategic flashback

In August 2002, American unveiled the first phase of its plan to deal with the growing financial crisis. As president and chief operating officer, Arpey was closely involved in the plan and, with chief executive Don Carty, co-signed letters in February to labor leaders requesting concessions.

The key elements of the airline’s turnaround strategy can all be found in Arpey’s 1982 thesis, including:

• Reducing labor costs. “Labor is probably the biggest cost advantage the new entrants have over larger [established] carriers,” he wrote. “[Airlines] must take significant steps in narrowing the divergence in labor costs between themselves and the new [low-cost carriers].”

Labor cuts made up nearly half of the American’s cost-cutting strategy, with $1.6 billion in payroll reductions through concessions approved this year.

• Enlisting the cooperation of workers by emphasizing the problems in the industry. Arpey wrote that “airline management must first adequately convey the seriousness of the problem to the rank and file union members,” and said the demise of Braniff Airlines could be used as an example of what could happen without a cut in labor costs.

Last year, American executives began an intense process of communicating the airline’s dire financial condition to union leaders and members through a process they called “active engagement.” Executives frequently cited bankrupt carrier United Airlines as an example of how much worse things would be without cost savings.

• Improving employee productivity. Arpey noted in his thesis that Southwest “obtains roughly 50 percent more actual flight time from its cockpit employees than do the established carriers.”

The new contracts will increase the amount of time pilots and other workers spend on the job by tightening and eliminating many long-standing work rules.

• Making operations more efficient. Arpey advised that airlines should increase the productivity of their aircraft and realign routes where needed. American has taken those steps by smoothing out hub schedules, reducing the different types of aircraft in its fleet and adding strategic city-to-city flights to compete with discounters like Southwest and JetBlue.

One point Arpey made as a student has not yet panned out. In discussing the need for airlines to reduce labor costs, he noted that, historically, it was extremely difficult to persuade union members to voluntarily reduce labor costs unless an airline was on the brink of collapse.

“It is to be hoped that in the future, airlines will not have to be in such a precarious financial position in order to obtain union concessions,” he optimistically predicted.

As American’s chief operating officer, Arpey and the rest of the carrier’s top management were unable to win concessions this year until airline lawyers were on the verge of filing a Chapter 11 case.

Staff Writer Jennifer Autrey Contributed to This Report.

ONLINE: AMR Corp., www.amrcorp.com

Trebor Banstetter, (817) 390-7064 tbanstetter@star-telegram.com

Last Updated ( Friday, 22 December 2006 ) 

The Transport Workers Union is not discouraging the due diligence of its membership in identifying and correcting safety concerns; however, it is important that one of the experts below make the determination of whether the report would be treated fairly in the current environment within ASAP before a report is submitted.

The Transport Workers Union is working diligently to ensure the integrity of the ASAP program is restored.

Once the Transport Workers Union feels the issues at the FAA AMR Certificate Management Office (CMO) are corrected and trust is restored, open reporting will once again be encouraged.

Safety of Flight and Compliance Coordinator Brad Brugger –TWU (918) 855-7825

TWU 565 ASAP Contact: Bob Van De Loo 817-874-0798