Gliding Toward A Labor Union At American Airlines?
Since taking over as CEO of American Airlines Inc. in May, Donald J. Carty has made a point of improving labor relations. From relaxing the summer dress code for office workers to sweetening travel benefits, he has looked for ways to end the bad blood between labor and management at American, which weathered two strikes in the past five years. On Sept. 29, Carty assured analysts that relations with nearly every major employee group were good or improving--in contrast to the turmoil at Northwest, United, and Delta.
Nearly, but not all. On Oct. 8, after almost a year of effort, the Communications Workers of America filed with the National Mediation Board to hold a national election at American to represent airport and reservations agents. Organizer Sandy Rusher claims that more than 50% of the 15,000 agents have signed cards in support of the CWA, well north of the 35% needed to request a vote. This is the first time in 20 years a union believed it had enough support with these workers to call for a vote.
The unionization drive could be Carty's first big labor challenge since taking over as CEO. It comes just as the economy is slowing down and American is trying simultaneously to contain costs and improve customer service. "We have been pursuing a cultural revolution here," says Daniel P. Garton, recently named senior vice-president of customer services. A vote to unionize, he says, "obviously would be a bit of a setback."
The goal for Carty is to fend off the union without alienating employees. "It's a very tricky line he's going to have to walk," says Denise Hedges, president of the Association of Professional Flight Attendants, which just began contract talks. And Carty could face a tough battle: 19,000 agents at United and 9,000 at US Airways recently voted to unionize and are seeking their first contracts.
FED UP. American intends to resist. In late July, the airline sued the union for unauthorized use of its logo. And in an Oct. 9 letter signed by Carty, American warns agents that the CWA wants them for their dues and can't guarantee any results. Garton says American is simply providing "all the information, in as unbiased a fashion as possible."
But some agents say they're fed up with years of one-sided pay and benefits changes. "There is so little trust," says 22-year agent Sally Ann Fowlkes. American boasts the highest maximum pay in the industry for agents, $19.66 an hour, but it's the only major carrier that doesn't specify the years needed to reach that level. Another thorny issue: a two-tier pay scale under which agents hired since 1996 top out at $13 an hour.
American believes it still has a good chance to keep the agents out of the union fold. But if it loses? "We will develop a relationship with the union leadership and the employees who are part of that union," says Garton, "but it will be more difficult." Then Carty's new culture at American will really be tested.