=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SF Gate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2003/03/17/f= inancial1608EST0189.DTL ---------------------------------------------------------------------- Monday, March 17, 2003 (AP) At American Airlines, pace of negotiations picks up DAVID KOENIG, AP Business Writer (03-17) 16:49 PST DALLAS (AP) -- American Airlines began formal negotiations Monday with the last of its major unions over proposed pay and benefit cuts of $1.8 billion a year that are aimed at keeping the world's largest carrier out of bankruptcy court. Negotiators for the airline held their first formal sessions with representatives of 26,000 flight attendants and 34,500 mechanics and other ground workers. The carrier has been negotiating nearly daily with the union for its 13,500 pilots since late last month, and those talks also continued Monday. American expects the talks to result in agreements quickly. "This is not going to be a protracted process, nor is it expected to be," said airline spokesman Bruce Hicks. "I think the labor groups understand the urgency that we're working under." American has asked for $660 million in annual cuts from pilots, about 30 percent of their wage and benefit payments. Some of the savings are expected to come through layoffs, and the airline is seeking a relaxing of union-negotiated work rules. Three weeks of negotiations have failed to produce agreement on any topics, although officials for both the airline and the Allied Pilots Association say they have made progress. Discussions have focused on issues such as staffing levels. American wan= ts to reduce the number of reserve pilots, while the union wants to replace lower-paid pilots on American Eagle commuter flights with its own members. "We're not going to roll a wheelbarrow of cash across the street and say, 'Here you go, fellows,"' said Steve Blankenship, a spokesman for the pilots' union. "We are looking at ways to improve the productivity of American Airlines." Pilots are the highest-paid employees in the airline industry and enjoy better pension benefits that could be wiped out if American's parent, AMR Corp., files for bankruptcy protection. As a result, many analysts expect the pilots' union to be the first to settle. "We've been at the table with these specific reductions longer with the pilots, and it's been moving at a fast pace," said Hicks, the airline spokesman. "It well could be that they could be the first to reach an agreement." The airline is also seeking about $620 million in annual cuts from ground workers, $340 million from flight attendants, $80 million from gate and reservations agents and $100 million from management. Leaders of the Transport Workers Union, who initially rejected American's concession demand, did not respond to calls for comment. American is seeking to cut ground workers' pay 16 percent and cut health benefits, vacations and paid holidays. The airline said those demands are negotiable but the need for $620 million in cuts from transport workers is not. "We've said to all the groups that the exact mix of how they reach the individual targets is not as important as reaching the target, but it can't be things that don't kick in until way down the road," Hicks said. George Price, a spokesman for the flight attendants, said the union hoped to save as many jobs as it could while coming as close as possible to the airline's target of $340 million in savings from the group. He declined to discuss details of Monday's opening negotiations. The unions for transport workers and flight attendants decided to come to the bargaining table after signs surfaced of the airline's worsening financial condition. AMR stock was removed last week from the Standard & Poor's 500 index aft= er falling more than 90 percent in the past year. The company reportedly has begun lining up emergency financing in case of a bankruptcy filing. AMR was losing $5 million a day in January, the latest period for which = it has provided figures, but many analysts believe it has enough cash to avoid bankruptcy until summer. They warn, however, that war against Iraq could hasten a bankruptcy filing by causing a sharp drop in air travel. Away from the bargaining table, American continues to lobby Congress and the Bush administration for relief from taxes and fees, which American said accounts for 26 percent of the price of the average ticket. American says it has already cut $2 billion in annual costs by cutting nearly 15,000 jobs, eliminating hundreds of flights a day since September 2001 and mothballing planes. But the Fort Worth-based airline is counting on labor to supply 45 perce= nt of the cost-cutting that executives say must be made for American to compete against low-cost carriers such as Southwest Airlines. "We still have the opportunity to fix our structural problems and make ourselves into a formidable competitor," chairman and chief executive Donald J. Carty said in a weekend message to airline employees. "Make no mistake, there's still a lot to do, but we're generating some very good momentum now." AMR shares rose 12 cents to $1.64 each Monday on the New York Stock Exchange. On the Net: www.amrcorp.com =20 ---------------------------------------------------------------------- Copyright 2003 AP