Signs point to pickup in negotiations between American, unions DALLAS (AP) =97 Officials at American Airlines, battered by persistent= rumors=20 of impending bankruptcy, were cheered this week by signs that=20 once-reluctant unions are seriously negotiating over large wage and benefit= =20 concessions. Analysts say American, which is losing about $5 million a day,= =20 cannot avoid bankruptcy without help from its unions in sharply cutting=20 costs. American laid out a proposal to mechanics and other ground workers=20 to cut their pay 16%. The 6-year deal would save the company $625 million a= =20 year and includes a cheaper managed-care health plan, eliminating pay for=20 one week of vacation, and cutting annual paid holidays from 10 days to five= =20 days. Leaders of the Transport Workers Union were meeting with consultants= =20 Wednesday to review the proposal and did not respond to calls for comment.= =20 In a Web site posting, they promised to help American avoid bankruptcy.=20 American hopes to win $1.8 billion in annual cost savings from workers,=20 nearly half the airline's goal of cutting annual costs by $4 billion.=20 Company officials promised the ground workers that they would share in the= =20 profits if labor concessions led to a turnaround. An airline spokesman said= =20 terms and timing of such sharing would be determined in negotiations. American is already negotiating for $660 million in savings from pilots. On= =20 Tuesday, the Association of Professional Flight Attendants authorized=20 negotiations on the company's proposal for $340 million in concessions.=20 "We're certainly very pleased ... by the sense of urgency and willingness=20 to negotiate," Bruce Hicks, a spokesman for American, said of the flight=20 attendants' resolution. "It was noteworthy there were no caveats. It was a= =20 commitment to get things done." No date has been set for the beginning of=20 negotiations, said a spokesman for the flight attendants union. American=20 wants $660 million in savings from pilots and $340 million from flight=20 attendants, with smaller amounts from nonunion employees and management.=20 Philip Baggaley, an analyst with Standard & Poor's, said American and its=20 unions "still have some time, months perhaps," to reach agreement =97 but=20 much less time if war in the Middle East causes a drop in travel and higher= =20 fuel prices. The unions have also joined American in lobbying Congress for= =20 relief from higher taxes, security and fuel costs. On Wednesday,=20 representatives from five unions marched at several airports and on Capitol= =20 Hill to support breaks for the airline industry. Government help, however, might be too late for American. "Nothing the=20 government does would materially change the likelihood of American filing=20 for bankruptcy," Baggaley said. Bankruptcy experts say the unions have=20 strong reason to help the airline avoid a Chapter 11 filing, which could=20 lead to permission to break contracts and reduce pension and other benefits= =20 that employees won in past contracts. Bankruptcy "makes losers out of=20 pilots especially; they have such wonderful pensions," said William=20 Rochelle, an airline bankruptcy lawyer in New York with Fulbright &=20 Jaworski. Gregg Overman, a spokesman for the Allied Pilots Association,=20 said American pilots were well aware of what could happen to pilot pensions= =20 under bankruptcy. "Obviously we want to avoid that kind of predicament," he= =20 said. "We want to get as much done outside the bankruptcy process as we=20 can." The apparent closer cooperation between the company and its unions=20 comes during a week in which the stock of American's parent company, AMR=20 Corp., has been hammered by reports of a possible bankruptcy filing. Investors, knowing that American's unions have been given unusual access to= =20 the company's financial records, took note when the president of the flight= =20 attendants' union warned Monday that the carrier might file for bankruptcy= =20 "sooner rather than later." That was followed by reports that American is trying to line up $2 billion= =20 in bankruptcy financing. The company has declined to comment. American's=20 financial problems have prompted the Federal Aviation Administration to=20 keep a closer eye on the airline and possibly increase inspections,=20 spokeswoman Alison Duquette said. The FAA took similar steps with United=20 Airlines and US Airways, both of which filed for bankruptcy protection.=20 Standard & Poor's announced it would remove AMR from its index of 500 large= =20 U.S. companies Thursday because of the company's plunging stock price and=20 market capitalization. American Airlines has been part of the index since=20 1938. Large investments buy big stakes of companies listed in the S&P 500.= =20 American's financial problems have left it scrambling to refinance about=20 $800 million in debt that comes due in June. A credit crunch could be the=20 impetus for a bankruptcy filing. "If an airline's cash is running down to=20 where it needs an additional line of credit, the lenders may be reluctant=20 to do it without bankruptcy protection," said Rochelle, the bankruptcy=20 attorney. *************************************************** The owner of Roger's Trinbago Site/TnTisland.com Roj (Roger James) escape email mailto:ejames@xxxxxxxxx Trinbago site: www.tntisland.com Carib Brass Ctn site www.tntisland.com/caribbeanbrassconnection/ Steel Expressions www.mts.net/~ejames/se/ Site of the Week: http://www.tha.gov.tt/ TnT Webdirectory: http://search.co.tt *********************************************************