American Airlines has told the National Mediation Board that it does not want to enter into arbitration with the labor unions. The airline also argued that it should be allowed to work within the rules of bankruptcy to reach new contract agreements or the bankruptcy judge should set new terms. Unions representing American pilots, flight attendants and ground crews appealed to the NMB on March 8 to intervene in the bankruptcy process telling the Board they would agree in advance to accept binding arbitration from the Board. Surprised? The company contends there is no legal or historic precedent for involving the NMB in its union negotiations, calling the union’s ploy nothing more than a last resort public relations strategy. Of course, union officials disagree. “We thought [arbitration] was a wonderful idea of taking two parties that have a long history of not working together very well and with the help of a mediator work together to help rebuild an airline,” said Howie Schack, a spokesman for the Allied Pilots Association. On Feb. 1, American proposed a massive cost-cutting plan that aims to reduce labor costs by $1.25 billion a year, but it can’t happen without new union contracts. And if negotiations fail, American can ask the court to impose new contract terms and has warned it is coming close to doing so. The company has also stated it’s possible the company could be sold off in parts or merged into another airline if its labor costs are not lowered.
