Labor Tensions Escalate at American

Members of the Transport Workers Union (TWU) at American have rejected a new contract offer from the airline. Two of the three segments of the union—the largest, its mechanics, along with the stores employees, who handle the aircraft parts inventories—voted in solid majorities to reject the deal. The smallest segment, representing roughly 100 “technical specialists,” voted in favor of the deal.

According to The Dallas Morning-News‘ Terry Maxon, “The results throw the issue of American’s labor dispute back to the National Mediation Board (NMB), which must decide whether to keep the two sides talking, put the talks on hold indefinitely or allow the union to go on strike.”

So what will happen?

At this point, signs seem to point toward both sides taking another shot at negotiation. It also seems unlikely that the NMB would release the parties from talks so soon. The “no” vote did include authorization for a strike at some point, should a deal remain unresolved. Still, the union seems committed to further discussions, even as its vice president says things like, “[Our members] were not convinced that this agreement represented an adequate return for the hundreds of millions of dollars of sacrifices we agreed to in 2003, to keep American planes in the air and prevent our employer from filing for bankruptcy.”

American says it “look[s] forward to re-working the agreements in a balanced way that will achieve ratification.”

As for the offer itself, Maxon writes,

The company had offered pay raises of 3 percent this year and 1.5 percent in 2011 and 2012, and lump-sum payments of 6 percent of annual pay to its employees at its maintenance bases.

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The deals also increased holiday, vacation and sick leave and made other improvements to benefits.

But the proposed contracts also required concessions from the union.

Among other elements, the deals would put new employees into 401(k) retirement plans rather than into pension plans with defined benefits.

In addition, for employees under 50, American would no longer help pay their health insurance premiums after they retire.

Clearly, there’s a long road ahead.