My article on recent labor-related congressional action that can make airline mergers easier is up now on Forbes.com.
“Thanks to the McCaskill-Bond amendment, mergers that produce value and create synergies have one less hurdle to leap.”
January 29, 2008 by Evan Sparks
6 Responses
Mr Sparks,
I just read your article on airline mergers and there are a few errors. The US Airways pilots where not given a senoirity list from the company, after months of negotiating a federal arbitrator produced a list. Also it is not the pilots who will not vote on a contract there is no contract to vote on. The company refuses to meet with the union in good faith to work out a fair contract.
LM Terry
Captain A320
US Airways
Sorry if I confused the issue. An Air Line Pilots Association seems to indicate that there’s an unpalatable contract that’s been offered. http://www.alpa.org/DesktopModules/ALPA_Documents/ALPA_DocumentsDownload.aspx?itemid=4550&ModuleId=2618
/E
Sir,
Has this bill containing this amendment passed into law?
Thanks
John Raab
Yes. It was part of the massive omnibus spending bill signed by the president just before Christmas.
/E
Another missing point is that in the majority of mergers, the acquired airline was just about to go out of business and all the employees were about to have lose their jobs. That was part of the senoirity list argument at AMR-TWA, NWA-Rebublic, etc.
I am in favor of the legislation, but there needs to be some relief in situations where a Union agrees to merge with a failing carrier. What may well happen now is that Union organizations will oppose merges with failing carriers resulting in the outright loss of thousands of jobs at the failed carrier. The Union and it’s members would be betting they would gain more after the failing carrier goes out of business than they would lose in senoirity integration with the failed carrier’s members.
Net result, more carriers fail and go out of business.
bruce graham
NWA 320 Capt
Below is the press release from Senator Bond’s office. The legislation was overwhelmingly passed in reponse to the unfair treatment that the TWA workers received after AA failed to keep their “fair and equitable” promise to the TWA workers and Congress. It is a sad day when you have to legislate fairness.
However, without the push for an extension of recall rights led by Graham and successfully mediated by McCaskill this would have not had to have happened. Regardless and rest assured, this legislation will even protect AA employees if they are to be acquired. Remember, the bigger you are the harder you fall.
WASHINGTON, D.C. — Less than a week after Lufthansa agreed to purchase 19% of Jet Blue, a struggling U.S. carrier, U.S. Senators Claire McCaskill and Kit Bond today secured a provision to the Senate’s omnibus spending bill to provide air carrier employees with a base level of protection during mergers. With 1,253 former TWA employees still at risk of losing recall rights five years after being laid off from TWA’s merger with American, McCaskill and Bond are seeking to prevent similar scenarios from occurring in the future.
The provision would ensure a merger process by which airline employee seniority lists can be integrated in a fair manner. If a dispute occurs, the parties can engage in binding arbitration. This provision would make it harder for one airline or union to add the employees of another airline or union to the bottom of the seniority list. Thousands of former TWA flight attendants lost their seniority after American Airlines acquired TWA and were furloughed after September 11. This provision would help prevent such occurrences in the future.
In addition to the recent news about the Lufthansa investment in Jet Blue, news reports are fanning rumors about the potential for other major commercial airlines to engage in mergers. McCaskill, who successfully offered a similar amendment to the Federal Aviation Administration Reauthorization Act in May, believed that the recent talk of mergers raised the level of urgency to sign such protections into law. She was pleased to work with Bond, along with U.S. Senator Dick Durbin (D-Il), to ensure the provision was included in the omnibus spending bill. The bill is expected to pass in both chambers and to be signed into law by the holiday recess.
“This provision is an important piece of the puzzle to ensure workers in the future don’t suffer the same fate as the TWA workers. I’m also hopeful it will aid in negotiations towards a final settlement for those workers,” McCaskill said.
“Our TWA workers were given promises and only got pink slips, this provision is a critical step in protecting airline workers from this fate in the future,” said Bond. “It was a pleasure to work with Senator McCaskill to secure these protections.”