Scathing Letter Signals Decaying Relations

By Trebor Banstetter, Fort Worth Star-Telegram, Texas

Oct. 10–The new officers of American Airlines’ pilots union blasted Gerard Arpey, the airline’s chief executive, in a blistering letter that disparages his leadership, condemns executive bonuses and claims that company sick-leave policies have resulted in suicide.

“Enjoy your blood money and your union-busting,” wrote Lloyd Hill, the president of the Allied Pilots Association. “We’ll see you in court, in the newspapers, and on the picket line.”

The letter, sent Sept. 18 and obtained by the Star-Telegram, was in response to an e-mail from a company consultant that touted cooperative efforts between labor and management. It was also signed by Tom Westbrook, the union’s vice president, and Bill Haug, its secretary-treasurer.

All three were elected in July after promising to take a harder line with airline management than previous union officials, and the letter clearly signals a deteriorating state of labor relations. Its harsh allegations and personal tone are far more severe than correspondence with American management in recent years, even during times of conflict. For example, the letter suggests that company sick-leave policies had spurred pilot suicides, though the union would not provide any details to substantiate that claim.

Hill “doesn’t mince words, and that’s pretty clear from the letter,” said union spokesman Gregg Overman. “It’s very direct.”

American spokeswoman Sue Gordon said that “heated rhetoric is common during contract negotiations.” She added that “we believe the interests of our pilots are best served when key contract points are discussed at the negotiating table.”

She said Arpey forwarded the letter to Jeff Brundage, American’s senior vice president of human resources. Brundage has not directly responded to the letter, she said.

The letter’s statements include:

Condemnation of a cooperative union-management program as “a cruel hoax perpetrated upon [American] employees.”

Criticism of American’s response to poor customer-service ratings. “Your solution always seems to involve hiring another [vice president] or forming another ‘team.’” American recently created a new executive position of “managing director of customer experience,” to address service problems.

A conclusion that the tenure of former Chief Executive Bob Crandall, long vilified by labor, is “looking more and more like the peak of leadership in AMR’s arc of history.” AMR Corp. is American’s parent company.

The former CEO, Hill says, “did not enjoy big bonus payments unless employees received profit sharing.”

Informed of Hill’s statement Tuesday, Crandall said: “I am certainly pleased that the [pilot's union] thinks well of my leadership. I worked hard to deserve the trust of all our employees.”

American and the union have been negotiating a new contract for a year, but little progress has been made. American recently proposed revamping scheduling that would allow pilots to fly more hours and thus earn more money, but that proposal didn’t address wages.

The union, meanwhile, is expected to submit its proposal sometime this month. Although it hasn’t released details, the union is likely to ask for substantial increases in wages and benefits.

Pilots, as well as other American employees, approved hefty pay cuts in 2003 to keep American out of bankruptcy. Now that the airline has returned to profitability, union leaders argue, employees deserve to have their wages restored.

American executives counter that rivals that went through bankruptcy, like Delta Air Lines and Northwest Airlines, already have cheaper labor costs, while discount airlines like Southwest are more productive.

By threatening to see Arpey “on the picket line,” Hill appears to be warning that the talks could end in a strike — a move that could be devastating to the airline. A pilot walkout would shut down the airline entirely and cause huge financial losses in a short time.

It could be more than a year, however, before a strike becomes possible. Federal labor laws that govern airline contract negotiations only allow walkouts after several conditions have been met, including mediation and cooling-off periods.

And the U.S. president has the ability to end an airline strike. That’s what happened in 1997, when President Clinton ordered striking American pilots back to work after seven minutes.

Overman said the union may also engage in informational picketing at airports.

The letter’s most explosive allegation concerns the airline’s sick-leave policy. Last year, American began requesting that pilots on sick leave more than 30 days meet with a company medical team to determine the nature of the illness or injury.

The union claims that American has been using the policy to harass sick pilots to return to work. In his letter, Hill blasts the airline for “management’s illegal, immoral and retroactive garnishment of earned and rightful sick pay for our pilots,” which he calls “a cruel persecution.”

Overman said that the company has been pressuring sick pilots to return to work, even if they suffer from a psychiatric disorder requiring medication, such as antidepressants, which may disqualify them from flying. In some cases, he said, pilots have stopped taking their medications to return to the cockpit.

In his letter, Hill alleges that the airline’s policy has caused “unprecedented suicide rates” and pilots deserting their families.

“One pilot caught in this drive to reduce costs was forced to come off his medications to try to” return to flying, Hill wrote. “His reaction to this cessation of treatment was to leave his wife and children behind, we are trying to reel him in before *he* kills himself.”

Overman declined to comment on any specific case of an American pilot committing suicide, citing union privacy rules. Gordon also declined to disclose any information on a suicide.

But she noted that the sick-leave policy was upheld by an independent arbitrator late last year after the union filed a grievance. And she added that meeting with the company medical team is voluntary.

“The vast majority of our pilots use our sick leave appropriately and work well with our medical department,” she said.

Shares of AMR (ticker: AMR) closed at $25.13 Tuesday, down 51 cents.

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Trebor Banstetter, 817-390-7064 tbanstetter@star-telegram.com

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