As Gilda Radner on the old “Saturday Night Live” might say, “It’s always something.”
Less than a month ago, the Transport Workers Union (TWU) representing the Fleet Service Group at American Airlines (baggage handlers, freight service workers, aircraft fuelers/de-icers and aircraft cleaners) said it was “suspending” a tentative agreement (T/A) reached with the company after more than two years of discussion. Yesterday, after a meeting between American, TWU and the National Mediation Board (NMB), the union pronounced the agreement dead and asked the NMB to release the 11,000 workers in the group into a 30-day cooling off period.
But it’s been a twisting road to this point. When the TWU first announced the agreement, the union said it was strong armed into signing a T/A by NMB member Harry Hoglander. In a May 28 press release, the TWU said: “Although the committee cannot recommend the T/A, we believe the membership should have the final say. The decision to bring the T/A was made based on the NMB's premise that there would not be any other meetings scheduled until the end of year or possibly later.”
The union then went on to say: “The committee also took into serious consideration that the NMB would not look favorably upon the negotiating committee not allowing the membership to vote on the Company’s final offer.”
By June 3, 2010 the TWU bargaining team had decided to send the agreement to the membership with a “no” recommendation. President Jim Little then jumped in and said that the union would not send the agreement out for a vote without a recommendation to ratify the agreement. At this point, the union “suspended” ratification of the agreement citing “unresolved Issues.”
Yesterday the TWU used the same phrase, claiming that ”unresolved issues” with the agreement have created an “impasse” – a legal term under the Railway Labor Act to signal that the sides can’t reach agreement. The release quoted TWU International Administrative Vice President John Conley: “We are now at an impasse with AMR,” Conley said. “We no longer have a tentative agreement and no ballots will be presented to members for a ratification vote. We urge the NMB to promptly grant us release so that we can begin the self-help process.”
My Simple Question
So what exactly changed in the last month? By my read of it, nothing. It appears to me that the NMB won’t likely schedule any new mediated negotiations until 2011.
But there is no evidence that the two sides are at an impasse. Rather they are immersed in a political quagmire in which one side cannot convince its members that there must be some “give” in the agreement to make possible the “gets” the union wants in terms of wage increases and other contract enhancements. An impasse is declared only when the two sides cannot agree after exhausting the mediation process.
In this case the sides agreed to the economics – that was the basis of the tentative agreement that, if ratified by TWU members, would result in a new collective bargaining agreement.
A Conundrum in This Case
Let’s be clear: the company’s proposal would put more money in the pockets of fleet service workers. Now they will be forced to wait until negotiations are scheduled to reconvene yet again. I do appreciate that there was a perception of layoffs associated with the agreement. That is simply not the case – rather AA agreed that no TWU employee would be furloughed as a result of the company’s efforts to be more competitive, much the same guarantee AA has made in negotiations with other workgroups.
The conundrum is twofold. First, the concessionary negotiations concluded during the restructuring round has resulted in a "mark to market" scenario that is no longer uniform among employee groups. Remember that the bankrupt carriers took multiple "bites at the apple" by first reducing cash compensation; then achieving productivity gains that reduced headcount; and then reducing pension and health and welfare expenses. American’s 2003 concessions were based mostly on that first bite, which means American’s labor costs remain higher than those airlines that restructured through bankruptcy - and it is different by work group.
Second, current negotiations are complicated by the increased use of outsourcing throughout the airline industry, which serves to fundamentally alter the comparisons of similar work from one airline to another. This fact is most prevalent in “below the wing” work that most other airlines now outsource at significantly lower wages.
Today’s market for fleet service employees is not the fault of the Transport Workers Union per se. But the union does have a responsibility to read the marketplace and negotiate an agreement that takes into account the economic realities out there. This is no impasse. Rather it is a union’s misguided act in taking a live proposal that includes improved economics for its members and burying it alive. Once again, the line workers see nothing in their pockets while the union lets a business agenda of maximizing headcount win the day.
This is one tough round.