The rhetoric has ramped up dramatically, and the lengthy contract negotiation between American and both its mechanics and fleet service workers (aka rampers) has now spilled over into the public eye. American has sued for an injunction to prevent the mechanics from orchestrating what it says is a slowdown. (You can read the filing for yourself and decide if you agree.) And the unions are vocally lambasting the airline. If you haven’t seen this video of American President Robert Isom getting an earful from the TWU President John Samuelsen, then take a look. It will sum up the current state of affairs between union leadership and management. It’s not good.
Whether there is a slowdown or not is a sideshow. Sure, it’s the main point if you’re an impacted traveler, but I’m talking about this from a business perspective. It’s a symptom of the broader issue that American and its mechanics/rampers still have no joint contract more than five years after the merger was completed. Why is that? What are the issues? Welcome to the first of a two-part story looking at this in greater detail.
Today I’m going to focus on a look back at the last 5+ years to see how we got here. Then tomorrow we’ll look at the sticking points.
A Negotiation Deferred
Before the merger, you had US Airways mechanics represented by the IAM with American mechanics represented by the TWU. In May 2013, after the merger had been announced but before it was completed, the two unions decided to come together to jointly represent the mechanics as The TWU-IAM Association, commonly referred to solely as “The Association.” The Association was truly just two unions coming together to negotiate a joint contract. Even the head of The Association would rotate between the two unions every two years, but the pre-merger workforces would each remain members of separate unions.
I can’t speak to why they thought it was better to do this than to choose one union to jointly-represent them, and neither can TWU President John Samuelsen. When we spoke for this piece, he told me he didn’t know why the previous union leadership decided to move forward that way. He wasn’t involved in that decision.
Almost immediately after settling on this way forward, the Teamsters tried to take advantage and win a representation fight against the IAM at US Airways. That was a significant and annoying distraction. By the time the merger was completed in December, the representation fight had been resolved (the IAM won, obviously), but it certainly further delayed negotiation preparation.
That was hardly the only issue. The US Airways group had been working under an amendable contract for three years, and they wanted that to be settled before any joint negotiations were to begin. As the IAM District 141 President noted:
As long as this management team refuses to settle a fair contract, approximately 32,000 employees will remain separated and the merger’s synergies will not be realized.
That negotiation spilled into 2014 when it was finally resolved. A new agreement was voted in during July of that year, so then they could finally focus on a joint agreement, right? No, because The Association still wasn’t recognized as the bargaining agent.
In August of that year, The Association filed the request to have the airlines recognized as a single carrier. That would lead to the National Mediation Board (NMB) certifying The Association as the bargaining agent, but it didn’t come through until April 2015. Then the two unions went through a reconciliation process between the two contracts, and they prepared themselves to negotiate. Negotiations finally began on December 3, 2015, two years to the day after the merger was completed. That’s really when the clock should be started; it’s been more like 3+ years instead of 5+ years.
The Raise That Shouldn’t Have Been
Negotiations continued into 2016, and there was no resolution. But you may recall that back in mid-2016, American management decided it wanted to give workers raises outside of their contracts so they could benefit from the company’s success even if they couldn’t come to a full contract agreement. In August, it was announced that The Association members would get raises of 22 to 24 percent on average (the small delta depending upon which side you believe) beginning in November 2016. In exchange, the unions agreed to let legacy US Airways employees work on American aircraft and legacy American employees work on US Airways aircraft. This was a minor trade for the unions to get such large raises, but it has come back to haunt the company to this day.
With higher wages in place, it took the pressure off getting a deal done. Sure, there are many issues beyond wages, but that was one big issue that could have kept the heat on getting to a deal. Further, the union was able to twist this minor giveback allowing crews to work on the other legacy airline’s aircraft as a trade for the wage increase when it was not even close to an even exchange. Instead of pushing things along, they started going backwards.
By the summer of 2017, things still weren’t going anywhere, so American tried a different approach. Instead of negotiating point by point, it put out a comprehensive proposal that it wanted The Association to evaluate. This did not go over well, as you can see in this post where it calls the proposal “garbage.”
At the end of summer 2017, American CEO Doug Parker made his fateful proclamation that American would never lose money again. Even though his point was to suggest that the industry had changed and investors should recognize that, this statement was, to be kind, ill-advised. It became a rallying cry for The Association. It emboldened them further, and they break this quote out regularly as a reason that the airline should be able to give their members what they want.
Since then, there has been some movement but nothing significant enough to really move the needle. The company has improved its offer, including, as I understand it, higher wages in light of Southwest’s new contract and more job protections. But the union leadership is clearly not satisfied and isn’t even close to allowing a vote by the membership.
The National Mediation Board was brought in to, well, mediate, late last year. The last session ended in April without an agreement. There may be more sessions in the future, but nothing is scheduled. This appears to be a stalemate at this point, and that might explain why you see more heated rhetoric and discussion of a slowdown. John told me that he “absolutely, totally believes [American] to be our enemy.” Is it bluster in the face of negotiation? Of course. It’s getting pretty vicious and that’s not helpful.
Tomorrow I’ll dive into what the issues are that seem to be preventing a joint contract from being agreed upon.