Rich Delaney, 19 July, 2013:
Negotiations with United Airlines resumed this week. The focus was on looking for ways to address the recent announcement by United of intent to contract out the current work in CVG, GRR, ROC, ALB, MDT, and TUS. The company informed the IAM that they intended to take action to turn all ground handling work over to a vendor – American Eagle – in all six stations, effective October 15th.
We reviewed the financial differences between our members continuing performing the work and also expanding the United operation and replacing the existing vendor or losing the work completely to American Eagle. The cost differences created a large obstacle that had to be overcome. On average, the cost savings to United of removing their own employees and turning over the critical work of these stations to their competitors was about 35%. In some cases, in actual dollar amounts, the difference was greater than $1 million a year. These figures are based the current cost structure of our PCE Agreement and are not speculation of future costs.
We immediately began looking at alternatives and options that may have been possible in each station. Each option was rejected by the company as not closing the financial advantage the vendor provides through low wages and minimal benefits. The IAM looked at every potential alternative, including those that were very hard to swallow, including partial contracting out of our members’ jobs. Working within the parameters of our contract we considered every possible scheduling option or work rule that could provide security for our members and savings to the company. In the end, the financial windfall the company sees through vendoring out work was greater than any single, or combination, of alternatives we would consider. After over two full days of discussion, the company told us there was nothing we could do that would change their decision at this time.
We then faced the reality that we must look at ways to lessen the impact on members in these stations. Our concern was that the company decision may be implemented before we could reach a full contractual agreement that could provide more protection or options for these stations. We focused on two specific subjects – severance allowances and possible Early Out options.
We have agreed with United that employees in CVG, GRR, MDT, ROC, ALB, and TUS will be considered eligible for an Early Out program that would be in effect after contract ratification, regardless of when ratification occurs. We have agreed that the components of an Early Out program would be the same as that which was included in the previous Tentative Agreement. And, most importantly, the opportunity to assess and sign up for the program should be announced immediately to provide members the maximum amount of time to decide and know, in advance, the level of participation in the program which governs the maximum amount of benefit. In order to provide the greatest amount of input for members to base their decisions, the Early Out program will be made available to all IAM members, not limited to these affected stations, for participation sign up. It is understood that the actual payment of Early Out money would occur after ratification of a complete agreement.
We have also agreed that the affected employees are entitled to enhanced severance allowance due to the company decision to contract out work.
Most importantly, we notified the company we intend to propose additional protections within our contract to address what certainly is going to be an ongoing problem for our members. Beyond the provisions that currently exist in our contracts, and the increased protections that were included in the rejected T/A, we need contract language that addresses the reality of today’s, and tomorrow’s, airline industry and the increasing and relentless pressure outside vendor operations put on our membership.
The decision of the company regarding these stations shines a light on the problems we have been trying to address throughout negotiations – the need to establish real employment security for our members and better wages and benefits for them at a time when the company is willing to hire outsiders to do the work cheaper and there are people willing to work for that level of wages. Even though our members have set a high bar for providing excellent customer service in these and all stations the company insists on focusing on the bottom line costs of offering acceptable service.
Although we were not able to stop the company from making their business decisions this week, we are not giving up. We will keep looking for ways to keep jobs in these stations and use the current round of negotiations to expand the job security requirements into the future. This past week has shown that working together stops at the bottom line and real protection is found in negotiated contracts.