American Airlines Won't Raise Mechanics' Contract Offer, Negotiator Says

American Airlines won’t raise the overall value of a tentative contract rejected by its mechanics and stock clerks when talks with the labor group resume, the carrier’s lead negotiator said.

A majority of the airline’s 11,500 mechanics and 1,200 stock clerks last month voted against the pending agreement. It would have provided pay raises for employees and scheduling flexibility for American to seek maintenance work from other carriers. American hasn’t disclosed the cost of the contract.

American, the second-largest U.S. airline, is in negotiations with all of its major work groups. The AMR Corp. unit is trying to hold down its industry-leading labor costs and return to profit in part by offsetting higher compensation with increased productivity.

“The company can’t afford to sweeten the deal because it was rejected,” Jeff Brundage, American’s senior vice president for human resources, said today in an interview. “That’s not going to happen. At the end of the day, our cost structure is going to have to be competitive.”

American is willing to change elements of the contract while maintaining the same total cost, he said.

The Transport Workers Union says it wants to recover wages and benefits given up in 2003 to help the Fort Worth, Texas- based airline avoid bankruptcy.

“We would hope that American Airlines would listen both to their employees and our members and come back to negotiations without setting parameters,” said Bobby Gless, assistant director of the union’s air transport division.

The union is polling its members to determine why they voted against the earlier agreement. No date has been set to resume talks.

To contact the reporter on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net

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