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American Airlines pilots protest manager stock bonuses – 4.18.07

American Airlines pilots protest manager stock bonuses

By TREBOR BANSTETTER and DAVID WETHE
STAR-TELEGRAM STAFF WRITER

Nearly 900 top managers and executives at American Airlines will receive stock bonuses Thursday valued at about $160 million, a payout that has riled rank-and-file employees and spurred protests and picketing in recent days.

The bonus plan, which dates to the early 1990s, awards stock based on the April 18 closing price of AMR Corp., American’s parent. Most of the recipients will receive the maximum payout under the play, because AMR shares have performed well compared to other airlines.

The exact amount going to top executives, including Chief Executive Gerard Arpey, was unknown Wednesday, because their bonuses are also affected by other, undisclosed performance measures. Those are expected to be reported in a financial filing later this week.

But the airline’s unions estimate that Arpey could receive at much at $7.5 million in stock under the plan.

A total 874 top managers and executives qualified for the bonuses, union officials said. Employees, meanwhile, have been working under sharply reduced wages and benefits since 2003, when union members approved $1.6 billion in annual concessions.

About 600 employees, mostly pilots, loudly voiced their frustration with the bonuses Wednesday at a protest at the airline’s Fort Worth headquarters, even as the company announced a profit for the first quarter.

Ralph Hunter, president of the Allied Pilots Association, shouted into a microphone that the airline’s management has rebuilt a “wall of discord” between it and the employees.

“They’ve rebuilt this wall higher and thicker than it ever was before,” he said. “As long as this wall stands, American Airlines will never be a great American airline. Mr. Arpey, it’s time to tear down this wall.”

He was preceded by James Little, president of the Transport Workers Union International, which represents mechanics and ground crew workers for American.

He said the day started out ominously with clouds over American’s headquarters.

“And you know why the clouds opened up?” Little yelled. “Because labor’s in the house. We’re here. We’re not going away. We want it now. We can’t give anymore.”

The rally was the third employee event in less than a week designed to draw attention to the bonus plan. Flight attendants marched on the company’s headquarters last week, and on Tuesday they picketed at 18 airports nationwide, with an estimated 4,000 attendants participating.

Dante Credit, a Euless resident who works on the ground crew for American, showed up to show his frustration. He wants to see other employees like himself get some of that money.

“I mean, give us something,” said Credit, who’s marking his 21st year at American on Thursday. “Ever since Sept. 11, we haven’t had a decent raise… I’m in an apartment. I would love to get a house.”

Jerry Mishak, a Keller resident who works as a mechanic for American, wore a sticker that said “I will strike.”

“It’s good to see all the different union guys around here today,” he said. “At the drop of a pin, I would strike. If my unit has the guts to do it, I’d be more than happy.”

In a conference call with analysts and reporters, Arpey defended the bonus plan as a longstanding, essential part of the compensation package for top employees.

“Because so much of senior management’s compensation is based on stock, when the company does poorly they don’t get paid (as much),” he said. He added that the airline’s workers, on average, are the best paid in the industry, largely because American has avoided bankruptcy unlike most other major carriers.

He also acknowledged that many employees aren’t satisfied with that explanation.

“I understand this is a subject where we disagree with the unions, and many employees have concerns about this issue,” he said. “But we’ve agreed on a lot of other things over many years, and that’s differentiated us from our bankrupt brethren.”

The orderly march started at the headquarters of the Allied Pilots Association on Trinity Boulevard.

As they walked along the backside American’s headquarters, the protestors cheered as a handful of other American employees looked on from the fifth floor of the company’s parking garage. The four employees clapped and gave the marchers a thumbs up in return.

The protestors also enthusiastically waived their signs at an approaching American Airlines jet as it came in for a landing at nearby Dallas/Fort Worth Airport.

Before the march began, labor leaders tried to rile up enthusiasm by playing a song called “The Bonus of April.” The 5-minute song was written to the tune “The Wreck of the Edmund Fitzgerald” by Gordon Lightfoot.

“Management they say never gives up their pay when the bonus of April comes callin’,” according to the song’s refrain.

Afterward, Jeff Brundage, senior vice president of human resources at American, said the rally is part of a “very normal process” of labor negotiations.

“I don’t like the fact that our employees feel like they need to come out here and do this,” Brundage said from inside American’s headquarters. “Clearly there’s a lot of emotion around it. However, it is part of the process. If you look back at the history of labor relations, unions have been expressing opinions through informational picketing and through rallies since there have been unions.”

He said while management and labor leaders may disagree as to the facts, they still need to find a way to work out their disagreements.

American’s average annual compensation for pilots is about $136,000, he said.

“If they want to make what executives make, then they need to become executives,” said Brundage, who was a pilot for about six years, none with American. “If I want to make what a pilot makes, I got to go back to flying airplanes.”

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M-F: 9:00AM - 5:00PM (CT)
Phone: (817) 540-0108

Call APFA

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