AMR SPENDING $217 MILLION TO SAVE $60 MILLION

[Hopeful]

***************
IBM to handle some AMR personnel services
Associated Press

DALLAS - AMR Corp., the parent of American Airlines, will hire International Business Machines Corp. to perform some of its personnel chores in a $217 million deal that will run for 7 1/2 years, the companies said Friday.

AMR expects that hiring an outside firm to do the work will save it $60 million over the length of the contract, said AMR spokeswoman Sue Gordon.

Fort Worth-based AMR decided about 18 months ago to seek outside help for some of its personnel functions in North America, including training and the operation of centers that employees call with questions about benefits.

American has about 200 employees who do that work now. About 10 to 20 will transfer to IBM, and the other jobs will be phased out over the next 18 to 24 months, Gordon said. She said American expected to offer other jobs to the displaced workers and didn't foresee layoffs.

AMR got proposals from IBM, Electronic Data Systems Corp. and other outsourcing firms, Gordon said.

Armonk, N.Y.-based IBM has signed similar deals in the past year to provide back-office help for Avon Products Inc. and CVS Corp. and to run Delta Air Lines Inc.'s computer systems. Financial terms of those deals were not disclosed.

IBM and EDS are aggressively pursuing so-called business-transformation outsourcing deals like the one with AMR to offset slower growth in other parts of their business.

American, the nation's largest airline, has more than 88,000 employees in the United States and Canada.

 

[FWAAA]

AMR SPENDING $217 MILLION TO SAVE $60 MILLION

So would you rather than AMR spend $277 million instead of $217 million over that 7.5 years?

Doesn't it make you happy to see AA outsourcing white collar jobs for a change?

I seriously don't see how this is a problem. Some overpaid white collar guys hit the street and IBM does what they do best these days: Provide lower cost outsourced solutions.

Your post makes it sound like you think that the $217 million is over and above what AA would pay for internalized IT, but I know you're smarter than that. Aren't you?

 

[flyastrojets]

I believe the deal is that if AA kept doing things the way it does now, it would have to spend $277 million. Giving this business to IBM means that AA will only spend $217 million, which results in $60 million of savings.

 

[Hopeful]

So would you rather than AMR spend $277 million instead of $217 million over that 7.5 years?

Doesn't it make you happy to see AA outsourcing white collar jobs for a change?

I seriously don't see how this is a problem. Some overpaid white collar guys hit the street and IBM does what they do best these days: Provide lower cost outsourced solutions.

Your post makes it sound like you think that the $217 million is over and above what AA would pay for internalized IT, but I know you're smarter than that. Aren't you?

Gee, I thought the post topic "AMR SPENDING 217 MILLION TO SAVE 60 MILLION" WAS SELF EXPLANATORY.

The way I read it, simply, is that AMR will spend $217 million to save $60 million.

This has nothing to do with spending any amount on any service.

You guys need to lighten up a little!

SPEND $217 MILLION TO SAVE $60 MILLION!


DO YOU NOT SEE THE HUMOR IN IT??????????????????????

 

[flyhigh]

FWAAA,

White collar work in the airlines doen't pay nearly as much as you think. Most everyone I know who has left an airline was able to get at least 40% more and in many cases, better benefits. They dangle the free flights thing for white collar people just as much.

 

[Barfbag]

FWAAA,

White collar work in the airlines doen't pay nearly as much as you think. Most everyone I know who has left an airline was able to get at least 40% more and in many cases, better benefits. They dangle the free flights thing for white collar people just as much.

If you're sitting in your AA cubicle, reading this, your job is next.

 

[eolesen]

If the scope of this deal is the same as originally proposed a couple years ago, it's the folks who answer employee questions about health and dental coverage, claims not honored by UHC, payroll issues for current employees, and retirees. None of that's unique to the airline industry. Same thing with fixing PC's, changing out lightbulbs, or cleaning the toilets, which is why all that work has been outsourced.