Reuters: Bankruptcy News: UPDATE 2-AMR wins labor deals with five union work groups

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UPDATE 2-AMR wins labor deals with five union work groups May 15th 2012, 15:38 Tue May 15, 2012 11:38am EDT * Airline looking for $1.25 bln in savings * Bankruptcy court must still approve deals By Kyle Peterson May 15 (Reuters) - Five out of seven work groups represented by the largest labor union at AMR Corp's American Airlines voted to accept contract terms offered by the bankrupt airline, the Transport Workers Union (TWU) said on Tuesday. The union said the deals eliminated the need for the airline to void their contracts and saves jobs. T wo other TWU work groups rejected the airline's contract proposals. The vote on AMR's last and best proposal came amid a court battle in which the airline is seeking permission to impose temporary, unilateral contract terms on its unionized workers, including the TWU and unions representing pilots and flight attendants. "Some of our members found the company's last offer to be a safer bet than waiting on the court to make a decision," TWU President James Little said in a statement. "The members in bargaining units that voted 'no' thought the proposals were not in their best interests." The airline, which went bankrupt in November amid high labor costs, has said it needs $1.25 billion in annual labor-related savings to become profitable. Fleet service clerks, dispatchers, ground school instructors, maintenance control technicians and simulator technicians approved the airline's offer. Aircraft maintenance and related workers along with stores clerks voted to reject the terms in the offer, the union said. The proposal had been sent directly by union leaders to the workers, an unusual step because unions frequently bless an offer as a tentative agreement before submitting it for a vote. The union has said AMR's last proposal would reduce by 2,600 the number of proposed union layoffs at the airline. Under AMR's proposed unilateral work terms, the TWU would have lost around 9,000 jobs. The bankruptcy court still needs to approve the deals. "We realize this was a very difficult decision for our TWU-represented employees," AMR said in a statement. The carrier said it would still try to win deals with the two TWU groups that rejected the offers even as it seeks court permission to void the existing contracts with the units. AMR said last week it would explore its merger options, including a deal with US Airways Group, which has the support of the company's unsecured creditors. AMR had previously resisted US Airways' merger interest. All three of AMR's labor unions are among the creditors. The bankruptcy is In re AMR Corp et al, U.S. Bankruptcy Court, Southern District of New York, No. 11-15463. Link this Share this Digg this Email Reprints

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