Carty says BK may still happen even with agreements

[FA Mikey]

American Airlines Chief Executive Donald Carty warned on Thursday that the world''s largest airline may still file for bankruptcy even if union workers agree to big concession packages next week.

I must tell you honestly, that given the impact of the war in Iraq and a continued weak economy, the possibility of a bankruptcy filing remains, these tentative agreements not withstanding, Carty, the head of American''s parent AMR Corp.

 

[RV4]

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On 4/10/2003 630 PM FA Mikey wrote:

American Airlines Chief Executive Donald Carty warned on Thursday that the world''s largest airline may still file for bankruptcy even if union workers agree to big concession packages next week.

"I must tell you honestly, that given the impact of the war in Iraq and a continued weak economy, the possibility of a bankruptcy filing remains, these tentative agreements not withstanding," Carty, the head of American''s parent AMR Corp.

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And so now what are we voting to avoid again?

FEAR, FEAR, FEAR!

 

[AAStew]

I think someone else said it best earlier today (the post was deleted), something about Mr. Carty being the posterior portion of an equine. What happened to that post it really was humorous....

 

[FYI]

AMR May Face Ch. 11 Even with Wage Deals
Thursday April 10, 7:06 pm ET
By Jon Herskovitz and Kathy Fieweger


FORT WORTH, Tex./CHICAGO (Reuters) - American Airlines Chief Executive Donald Carty warned on Thursday that the world''s largest airline may still file for bankruptcy even if union workers agree to big concession packages next week.
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"I must tell you honestly, that given the impact of the war in Iraq and a continued weak economy, the possibility of a bankruptcy filing remains, these tentative agreements notwithstanding," Carty, the head of American''s parent AMR Corp. (NYSE:AMR - News), told employees at a town hall meeting in Fort Worth, Texas.

The ominous statement came even as one of American''s major labor groups, the Transport Workers Union, suspended member voting on a proposed concession deal in a dispute over precisely what the two parties agreed to about 10 days ago.

The latest kink with the TWU comes at a time when American cannot afford any new disturbances over its landmark tentative cost-cutting agreements with three major unions totaling $1.8 billion, reached on March 31.

Sources familiar with the matter have told Reuters that American''s management has been concerned for some time that the $1.8 billion would not be enough given the weak U.S. economy and the war in Iraq, which have hurt bookings.

Carty told workers on Thursday that American would seek an additional $500 million in cost cuts in bankruptcy.

An airline official said American would be forced to cut about 8,000 to 9,000 additional jobs if the concession deals were not approved and the airline filed for bankruptcy. He added the fleet would be trimmed by about 80 aircraft.

Under the concession deals, the union that represents pilots have said they expect to lose about 2,500 jobs, while the flight attendants union said their calculations indicate the deal would mean a loss of about 2,300 of their positions.

American narrowly avoided a Chapter 11 filing last week by securing the packages from three major unions, but it still faces a host of challenges.

Banks and financial institutions are still working on arranging debtor-in-possession financing, including the lead Citibank (NYSE:C - News), J.P. Morgan Chase (NYSE:JPM - News), CIT Group Inc. (NYSE:CIT - News) and Merrill Lynch & Co Inc. (NYSE:MER - News), sources said.

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"We are in dispute with American Airlines Inc. over what was agreed to by our committees at the time of the tentative agreement," said James Little, director of the Air Transport Division for the union, which represents 34,500 ground workers and mechanics at American.

"Until such time that we have full text language available for our union members to review, we are suspending all voting," Little said. The statement was posted on the TWU Web site on Wednesday. Membership voting was still suspended as of Thursday evening, the TWU said.

A source familiar with the package said the TWU dispute centers around language covering sick leave and injury-on-duty policy. The source said the airline, under its interpretation of the disputed provision, could save an additional $42 million. The transport workers have not agreed to that additional amount.

"It''s a serious complication," the source said.

Voting results by rank-and-file union members about their individual deals must be reported by 12 p.m. EDT on Tuesday, said American spokesman Bruce Hicks.

Also on Wednesday, American reached a deal with the TWU on a "variable wage adjustment program" that would provide pay increases of up to 4.5 percent a year if certain financial conditions are met. The plan was also offered to the pilots'' and flight attendants'' unions at American.

According to Hicks, the wage adjustment plan and the current dispute with TWU over contract language were totally unrelated matters. He said he did not believe the matters at issue were substantive, noting that the airline is working with the TWU to resolve the problem.

The wage adjustment plan amounts to a sort of bonus for workers if several criteria are met, including a return of AMR''s credit ratings to pre-Sept. 11 levels, Hicks said, rather than any sort of snap-back provision.

The increases of up to 4.5 percent would be effective for only 12 months and could not be earned before Jan. 1, 2006.

The credit ratings that must be achieved for the wage enhancements to kick in are BBB minus under Standard & Poor''s and Baa3 under Moody''s. AMR''s current credit ratings are eight notches below that as the industry struggles through its worst financial crisis ever.

Shares of AMR closed 1 cent higher on the New York Stock Exchange (News - Websites) at $3.80.

 

[whatkindoffreshhell]

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And so now what are we voting to avoid again?

FEAR, FEAR, FEAR!

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Revenue revenue revenue.

Why is this concept so difficult to understand?

 

[rampguy]

FEAR, FEAR, FEAR!

Occurs to those who are afraid they will lose their life style if they have to take a pay cut.

 

[Oliver Stone''s Apprentice]

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On 4/10/2003 728 PM RV4 wrote:

And so now what are we voting to avoid again?

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Avoiding your contract being gutted (not necessarily thrown out) in S.1113.

If you have a negotiated reduction agreement prior to bankruptcy, and the company says it will not seek further concessions in S.1113, that is likely to be honored by the court.

This is exactly how Hawaiian''s bankruptcy is being handled. Their management has gone on record saying that Hawaiian''s labor unions will not be asked to provide any further cuts than what they agreed to and implemented prior to filing.

But that''s just my non-lawyer opinion.

 

[RV4]

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On 4/11/2003 8:31:03 AM eolesen wrote:

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On 4/10/2003 728 PM RV4 wrote:

And so now what are we voting to avoid again?

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Avoiding your contract being gutted (not necessarily thrown out) in S.1113.

If you have a negotiated reduction agreement prior to bankruptcy, and the company says it will not seek further concessions in S.1113, that is likely to be honored by the court.

This is exactly how Hawaiian's bankruptcy is being handled. Their management has gone on record saying that Hawaiian's labor unions will not be asked to provide any further cuts than what they agreed to and implemented prior to filing.

But that's just my non-lawyer opinion.

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And how much does AA pay you to post your opinionss on this site?

Of coures they "wont ask for more"....Why?...

...Because my contract would be "gutted" not thrown out under the current T/A we are voting on.