Profit Sharing Plan: The company proposed to replace the existing profit sharing plan with a new profit sharing plan that rewards employees at the first dollar earned and matches Continental's plan - the richest plan in the industry.
[Modified] The company's proposed plan would reflect Continental's new plan which:
-->Creates an award pool of 15 percent of annual pre-tax earnings. This percentage would establish a fund from which awards are distributed to all participating employee groups.
During the same time period in the spring of 2010, AMR management also developed a document “From the Ground UP” for use in the negotiations with the Transport Workers Union (TWU), the union that represent American Airline’s baggage handlers. Page 10 of the TWU document contained the explanation in the inset below:
During 2010, management was negotiating with two separate employee groups, the APFA and the TWU, and telling both of them they would be getting the “richest plan in the industry”, yet they were two entirely different plans. How could that be? Were they intentionally misleading the employees of each group? Were they unaware of what the richest plans really were? Were they negotiating in good faith with each of their unions?
On February 1st, 2012, AMR management provided their employees with 1113 term sheets describing the concessions they proposed for each employee group. Also contained in the 1113 term sheet for pilots were a few enhancements contingent on reaching a consensual agreement to the concessions listed. Once again management made a proposal on profit sharing and made statements that they would provide their employees with the richest plans in the industry, but this time it is contingent (the carrot) on employees agreeing to their 1113 terms.
To Be (Pensionable) or Not To Be, That is The Question...
On February 1, 2012, Jeff Brundage, Senior Executive Vice President Human Resources, also wrote a letter to AMR employees containing the following quote, “....and a new, first-dollar profit sharing plan that matches the most generous plans in the industry - provisions we propose as part of a reaching consensual agreements with the unions. “
Management’s 1113 profit sharing proposal is below:
Today, as described in the Delta Pilots' Contract Comparison on page 26, Delta pilots have the following profit sharing plan:
The pilot profit sharing plan for Delta pilots clearly states the profit sharing awards will be pensionable, while AMR management’s proposal clearly states profit sharing will not be considered compensation for pension purposes.
How can AMR management in good faith make the statement to American Airline’s pilots that their profit sharing proposal, “matches the most generous plans in the industry ”, when it clearly does not?
Why is AMR management intentionally making inconsistent and what appears to be misleading statements to all its employee groups about profit sharing plans? It leads you to question if AMR management even understands their employees’ competitive position amongst their competitors?
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| Management's TWU Profit Sharing Proposal |
During 2010, management was negotiating with two separate employee groups, the APFA and the TWU, and telling both of them they would be getting the “richest plan in the industry”, yet they were two entirely different plans. How could that be? Were they intentionally misleading the employees of each group? Were they unaware of what the richest plans really were? Were they negotiating in good faith with each of their unions?
On February 1st, 2012, AMR management provided their employees with 1113 term sheets describing the concessions they proposed for each employee group. Also contained in the 1113 term sheet for pilots were a few enhancements contingent on reaching a consensual agreement to the concessions listed. Once again management made a proposal on profit sharing and made statements that they would provide their employees with the richest plans in the industry, but this time it is contingent (the carrot) on employees agreeing to their 1113 terms.
To Be (Pensionable) or Not To Be, That is The Question...
On February 1, 2012, Jeff Brundage, Senior Executive Vice President Human Resources, also wrote a letter to AMR employees containing the following quote, “....and a new, first-dollar profit sharing plan that matches the most generous plans in the industry - provisions we propose as part of a reaching consensual agreements with the unions. “
Management’s 1113 profit sharing proposal is below:
- Current profit sharing plan and the Annual Incentive Plan (AIP) would be eliminated.
- Beginning at the first dollar of pre-tax income, the new profit sharing plan would pay awards equal to fifteen (15%) percent of all pre-tax income, prorated to take into account any groups of frontline employees who do not participate in the plan. Pre-tax income for the purposes of these awards will be calculated prior to the effects on income of any special, unusual, and non-recurring items and inventive pay.
- The Enhanced Fund would be distributed equitably to all employees based on each employee’s earnings. Profit sharing is not considered compensation for purposes of determining Company contributions or other benefits under any retirement plans.
- Individual Enhanced Awards will be distributed no later than March 15 of the following year for employees who meet the eligibility requirements as long as minimum funding requirements are met.
- The implementation of the Enhanced Profit Sharing Plan is contingent on reaching a consensual agreement.
Today, as described in the Delta Pilots' Contract Comparison on page 26, Delta pilots have the following profit sharing plan:
The pilot profit sharing plan for Delta pilots clearly states the profit sharing awards will be pensionable, while AMR management’s proposal clearly states profit sharing will not be considered compensation for pension purposes.
How can AMR management in good faith make the statement to American Airline’s pilots that their profit sharing proposal, “matches the most generous plans in the industry ”, when it clearly does not?
Why is AMR management intentionally making inconsistent and what appears to be misleading statements to all its employee groups about profit sharing plans? It leads you to question if AMR management even understands their employees’ competitive position amongst their competitors?
