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Airline catches flak for policy
By KRIS HUNDLEY
© St. Petersburg Times, While President Bush will fly to Chicago's O'Hare International Airport on Thursday to comfort airline employees affected by the Sept. 11 terrorist attacks, at least one group of workers will be left out in the cold. American Airlines, the nation's largest airline, said it won't give severance payments to the 20,000 workers it expects to furlough as a result of dramatically reduced air traffic since the disasters. Members of Congress, along with union leaders, were outraged by American's plans to deny severance pay, despite contractual agreements. The news comes just days after the Fort Worth, Texas, carrier helped to lobby Congress for a $15-billion industry bailout package. American is expected to receive about $808-million in direct cash assistance from the special relief package. "We treated the airlines with a great deal of fairness and generosity," said Rep. Mark Foley, R-West Palm Beach. "This kind of gesture was not what we expected." Said Rep. Jim Davis, D-Tampa: "The purpose of the bailout is to get the airlines back into business. If they are laying off workers, my question is: Where is the money going?" "It's outrageous," said Edward Wytkind, executive director of the AFL-CIO Transportation Trades Department. "We are strongly opposed, and we're going to do everything in our power to stop them," he said, adding that suing the airline is among several options under discussion. American spokeswoman Karen Watson said the airline needed to withhold severance in order to continue operating. She did not say how much the company expects to save by invoking a "force majeure" clause that allows it to sidestep contract agreements. The French term, meaning superior force, gives the company the right to waive the normal notice period and severance pay in times of national emergency, Watson said. It will apply to union and non-union workers. Watson could not say what the average severance payment would have been since it varies depending on salary, position and length of service. "While we'd love to be able to do something different, what's at stake here is our very survival," she said. "It was a very painful decision, but even with the furloughs and federal aid, we still remain in a situation where the airlines are in a perilous position." American is just one of about a dozen airlines that announced job cuts totaling nearly 100,000 in the wake of the terrorist hijackings. But it is the only one so far that has made public its intention to eliminate severance payments. United Airlines, which is cutting 20,000 jobs, and US Airways, which is eliminating 11,000 positions, said Tuesday they had no more details about their plans. Delta Air Lines, which has a work force of 82,000, is holding a news conference this morning during which it is expected to announce more than 10,000 layoffs, the New York Times reported. The only airline that reaffirmed its commitment to offer severance was Continental Airlines, which has targeted 12,000 jobs for elimination. Both union and non-union workers will receive severance payments; the amount varies by labor agreement. The exception: 65 reservation agents in Tampa terminated this week after less than six months with the company. "We can never make this process easy, but we hope to make it easier," said Rahsaan Johnson, a company spokesman. "Employees will continue to be paid for some time and they'll keep their flight benefits for some time." Meanwhile, at Southwest Airlines Co., which is not laying off employees, workers are offering to work for free. In the fourth quarter, employees will be able to work a maximum of 16 hours a month for free to help the carrier save money until more people resume flying. American's decision to eliminate severance payments was a surprise to several members of Congress and union leaders, who vigorously supported the federal rescue plan but had urged that it include worker protections. "When they are taking taxpayers' money -- $15-billion -- they ought to act responsibly," said Rep. Bob Filner, D-Calif., a member of the House Transportation Committee who voted against the bailout package. "We'll see in the next few weeks or months, they will use the money in all kinds of ways that (those who voted for the bailout) will regret," he said. A spokesman with Transport Workers Union, which represents many of American's workers, did not return phone calls Tuesday. But Frank Larkin, a spokesman for the International Association of Machinists, which represents workers with several airlines not including American, said American's decision to arbitrarily eliminate severance payments is unprecedented. "The law does not allow one side to reinterpret a contract on the spot," he said. "The radical reinterpretation of little used language is likely to lead to grievances and arbitration." Larkin said he would be watching to see if other carriers follow American's example. Meanwhile, he was unimpressed by a gesture by American's chairman, chief executive and president, Don Carty, who said Monday that he would forgo personal compensation for the remainder of the year. Carty's annual salary is $772,500. In 2000 he earned $772,500 and received a bonus of $1.375-million. Carty also said that American would welcome voluntary pay cuts by employees and would give 20 percent of such contributions to an educational fund for children of American employees who died Sept. 11. "This is uncharted water for everybody," union spokesman Larkin said of the airlines' fight for survival. "But the airlines walked out of Washington with pretty much everything they asked for. For the employees, it's like watching the boat get salvaged while the crew is left at sea." - Information from Times wires and Times staff writers Bill Adair and Sara Fritz was used in this report. Kris Hundley can be reached at hundley@sptimes.com or (727)892-2996.
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From the Times Business report
From the AP
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