Bernie Sanders Calls American Airlines Management Disgraceful

Filed Under: American, Unions

Yesterday senator and presidential hopeful Bernie Sanders wrote a letter to American Airlines’ CEO, Doug Parker. This involves American Airlines’ ongoing dispute with their mechanics.

Bernie Sanders’ Letter To Doug Parker

Here’s the content of the letter:

Dear Mr. Parker:

I am writing to urge American Airlines to stop outsourcing U.S. jobs overseas and to bring jobs back to this country that are critical to the safety of passengers and your employees.

It is my understanding that labor contract negotiations have broken down out of your desire to save money by outsourcing and offshoring nearly 5,000 good-paying jobs. That is unacceptable. American Airlines must stop risking the safety of the flying public and its own workers just to make even more profits.

American Airlines continued failure to negotiate in good faith with its workers is an outrage that needs to come to an end. Instead of recognizing and addressing the concerns of workers, your management team has gone to great lengths to deny workers their rights to organize and bargain collectively and even moved to sue the TWU-IAM Association. In my view, American Airlines must do the right thing and agree on a fair contract to end over three years of limbo it has forced its workers to endure.

Let’s be clear. American Airlines is not a poor, struggling company. It is not going broke. In fact, last year it made $1.9 billion in profits. It had enough money to recently buy back $15 billion of its own stock. And American Airlines is a company that has repeatedly rewarded you with a compensation package as high as $31 million last year.

American Airlines disgraceful attempt to deny its union workers a fair contract is nothing more than corporate greed at its worst.

If American Airlines has enough money to buy back $15 billion of its own stock, it certainly has enough money to pay its union workers a decent wage with good benefits. And under no circumstances should it ever outsource jobs to low-wage countries with a track record of safety violations.

It is time for American Airlines to sit down with its workers in good faith and negotiate a contract that is fair and just for union workers that have made American Airlines the profitable company that it is today.

My Take On Bernie Sanders’ Letter

Before I share my take on this, let me note that I’m not on either “side” here. I think my opinion of American’s management is pretty obvious. I’ve given them a hard time, and I think the airline needs new leadership.

At the same time, I’m not a fan of the tactics the union representatives have been using here. They’re used pretty classless tactics, threatening a “bloody battle” and “subway style” action. And there have been repercussions to these statements — we saw an American mechanic intentionally sabotage a plane, and he said he did that because of this dispute.

But what about the core of the argument being made here?

Outsourcing Isn’t Dangerous

We can get to the ethical implications of outsourcing shortly, but the primary point of the letter seems to be that outsourcing maintenance is dangerous, as it’s mentioned repeatedly:

  • “critical to the safety of passengers and your employees”
  • “risking the safety of the flying public and its own workers just to make even more profits”
  • “outsource jobs to low-wage countries with a track record of safety violations”

I don’t like this kind of rhetoric on either side (kind of how the US airlines have tried to claim that if the Gulf carriers continue to grow, we won’t be able to get our military where they need to go).

The facts simply don’t back up this claim. Both Delta and United outsource significantly more maintenance than American, and there are no statistics to support American having safer operations than their competitors as a result of that.

The Outsourcing American Airlines Wants To Do

Outsourcing has been one of the primary points of contention in these negotiations, but it’s not quite what you’d expect. When negotiations broke off between the two parties, one of the topics was outsourcing line maintenance work.

The union wanted a cap of 7% on outsourced line maintenance work, while management wanted a cap of 12% on outsourced line maintenance work. No matter how you slice it, that’s not outsourcing 5,000 jobs, and the union hasn’t explained how they’ve arrived at that number, even though they’ve used it repeatedly.

It’s also important to understand the way in which American wants to outsource.

American wants to do more line maintenance in Brazil. Why? It’s not just because costs are lower, but primarily it’s because in Brazil their planes sit on the ground for 12+ hours every day due to scheduling, as they typically land in the morning and leave at night.

So since the planes are doing nothing there, it makes sense for them to get maintenance while they’re idle anyway (that’s much less expensive than taking them out of service in the US, when they could be flying). The problem is that while American has mechanics in these places, they’re not part of the union, and the union doesn’t want to give up membership.

It’s also worth noting that any mechanic who currently has a job at American would keep it — this would just change some practices going forward.

What Is “Fair,” Really?

The letter repeatedly talks about how the mechanics deserve a “fair” contract. The reality is that American has offered the mechanics a “fair” contract, in the sense that:

  • It’s competitive to, if not better than, the contracts offered to Delta and United mechanics
  • With this contract, American would still be outsourcing less than Delta and United
  • Mechanics are earning “living” wages

The union has repeatedly made it clear that they’re trying to raise a bigger point about corporate greed in America. This isn’t about them getting a competitive contract, but rather they think greedy corporations in the US have earned “enough,” and it’s time that employees get more.

I’m not saying I agree or disagree with that, but rather that it’s a different definition of “fair” than many others may use.

What I Agree With Bernie On

What I absolutely agree with Bernie on is that American management is way overcompensated. Doug Parker shouldn’t be making tens of millions of dollars for doing very little, and for the airline consistently underperforming the targets he sets.

Bottom Line

I doubt this letter will have much of an impact, though it certainly is on-brand for Bernie Sanders, and will earn him some bonus points as he runs for president.

The real core of this letter should be that workers deserve more of a company’s profits, and that’s a point that I respect, and that I largely agree with. In general I think profit sharing is a fantastic way to compensate people — Delta has the highest percentage profit sharing of the “big three,” and their employees are also the most engaged.

However, I don’t think it’s fair to make this a safety issue, or to suggest that American mechanics aren’t getting a “fair” contract. They’ve been offered something better than what their competitors have, and mechanics are well paid professionals, all things considered.

What do you make of Bernie Sanders’ letter to Doug Parker?

Comments
  1. Outsourcing IS BAD. Simply look at the decay of US industry and the resulting stagnant incomes of the 90%.

    Sending planes to El Salvador or Asia where mechanics can’t read the manuals and there are no FAA inspection is asking for trouble. The fact that Delta or United has not had a publicly known incident due to outsourcing is pretty thin evidence that it is innocuous. Would they ever admit to shortcomings of outsourcing? Only in the case of a catastrophe would it ever be acknowledged.

    Employ US workers and pay living wages.

  2. What is “fair” is when the proletariat share in their joint company’s business fortunes; when business is on a downturn both executives and workers share the burden then, when profits are earned both executives and workers share profits.
    What is ‘not fair’ is when many greedy executives preach about working hard and honesty to their front-line workers then, when there is a downturn there is immediate cost cutting takes effect on only the front-line workers but when profits are earned these profits are not shared with frontline workers (but profits are only for ‘hard-earned’ executive bonuses); the stratospheric gap in pay between executives and frontline workers of American Airlines is certainly not “fair”; no wonder millions of exploited proletariat rally around Bernie Sanders.
    Personally, I would also never purchase things from exploitive, greedy companines (like the GAP where their executives earn millions while their frontline staff earn minimum wages with no health insurance (and garment workers in Bangladesh are inhumanly used like machines)); even if their clothing was cheaper than a more ethical clothing company.
    Thank you for this post

  3. Sounds like it was written by a union mouthpiece as part of a negotiating tactic.

    Safety is a non-issue. Although we’ve come quite a way in the states, it’s not like US-based union mechanics don’t cut corners and have safety concerns. Anyone remember AA191 ? How about the MD-80s that were grounded because of wiring concerns, where the wires were improperly routed according to the FAA? Heck, what about the union mechanic that sabotaged the flight in Miami?

    I’m no fan of Parker’s and I think he’s overpaid. But claiming that the airline is not “giving the mechanics a fair contract” – effectively saying the company should give the union whatever it wants – is just making Sanders look like a bigger fool.

  4. HOLD UP. You’re telling me that American, who in their argument against the Gulf 3, spoke how important it is to PRESERVE US jobs, want to outsource 5000 US jobs overseas? Well, I never!

  5. If only Bernie’s letter would also touch on Parker ruining Americans FF program it’s now horrible customer service and all the evil management has done and brought to this once reasonably good airline then I would Applaud
    As a lifetime Plat I fly Delta and Alaska and happy to avoid the tragedy known as American Airlines to echo others Parker Needs to Go

  6. Normally when a stock continues to underperform, especially underperform compared to its competitors management doesn’t last. I’m perplexed why management isn’t being removed. This isn’t like a startup company where the founder(s) control the voting stock.

    I know you can’t create a law for this but companies shouldn’t allow differing unions and differing contracts to continue for years per merger. This all should be sorted out prior to the completion date of a merger. I sure wouldn’t be happy if I was doing the same job as another person but getting paid differently.

    It is a big mess, and as usual, the customer is the one that gets screwed.

  7. According to the FAA in 2018 the five largest US carriers outsourced the following volume of maintenance: Southwest 52%, United 51%, Alaska 49%, Delta 43%, and American 33%. Smaller airlines Hawaiian and JetBlue outsource even more at 75% and 74% respectively.

    None of these airlines exhibit the degree of unveiled HATE between mechanics and management that AA has repeatedly shown in words and actions. This is more about a toxic culture than it is about safety or jobs.

    What we also learned from Bernie’s letter is that at best he has a 6th grader’s grasp on grammar.

  8. I’m not a fan of any of the parties here however there is one consistent theme – none are willing to meet in the middle. Management under Parker is hyper centered on shareholders and not stakeholders, creating bad morale, bad working conditions and a bad experience for passengers. Labor is too extremist, equally not willing to budge with their demands and the mechanics continued purposeful slowdown is making passengers and other AA employees collateral damage in their dispute. As for Bernie, he is merely pandering to his base and couldn’t care less about AA, it’s employees or passengers and is only interested in the political capital that can be gained by injecting himself into this whole mess. But Parker is the biggest problem and he needs to settle this or resign.

  9. It is not his job to decide if the CEO is making too much money. It is the job of the AA Board to decide if they should reduce the salary they pay to the CEO, if he should be fired, etc…. In my opinion when the CEO is so bad and does nothing it is not his fault but a poor Board that does not take action.

  10. I agree. The AA Exec’s are hugely (!) over paid.
    Sadly, Bernie is not well liked either. So, it is negative upon negative.

  11. Santastico is 100% right. That’s free market capitalism as we have it in the US. People talk about the pay gaps, and the execs versus the “poor front line employees” and all that nonsense, but we don’t have communism here. Don’t like a company’s practices, or ethics, or management? Then don’t do business with them or don’t work for them. I know that’s way easier said than done, but that’s the reality of free market capitalism. No one ever said it was a perfect ecenomic system. You start getting government intervention into all this stuff, and that’s not capitalism it’s communism, or something similar.

  12. Full disclosure, I am an aircraft mechanic with 23 years at my airline ( not for AA ). Although we our compensated for allowing the company to outsource, it’s still a practice we don’t like to see happen. Outsourcing to another U.S. carrier in a city you may not have mechanics stationed at or a third party overhaul facility here in the states is one thing, but when you outsource to another country is when it gets a little grey.

    Airlines save money by having workers who don’t speak/read English for aircraft manuals, are not drug tested routinely if at all and do not have a certified FAA Air-frame & Power-plant license working on a plane you may be flying on the next day. The loophole airlines use ( with FAA blessing ) is that one or two people that do have those credentials are stationed at those facilities to sign off the work those contractors have done. This practice of going to other low wage countries for maintenance is fairly new in the overall time-line for airlines but fortunately we have not had a catastrophe as a result.

    As far as Uncle Bernie goes, you can’t help but chuckle a bit that he even sounded off against Parker. Even though he brings up some legitimate points he’s throwing a lot of rocks from the balcony of his glass house. Not too long ago when his campaign workers asked Bernie to be fairly compensated for their work, he responded by giving them raises and then cut their hours to offset the cost instead, leaving his finances untouched.

    Thanks Ben for all your hard work love the website, hope to run into you out there sometime.

  13. This isn’t “free market capitalism.”

    AA enjoys a monopoly of taxpayer-owned slots in a field with high barriers to entry in markets that are captive. These idiots who go on comment boards and talk about “blah blah free market” need to do some research outside of gassed PR, I swear. They’d fail a high school Econ course.

    AA doesn’t isn’t even shy about their inability to compete in non-captive markets anymore, and it’s fairly obvious as evidenced by their retreat from markets like NYC where literally every other airline eats their lunch. I’m sure people in Philadelphia or Charlotte would love to take their business elsewhere but they -can’t.-

  14. The guy who sabotaged the plane was earning 9,400 a month. Who can say that is not a good salary??? This whole conversation is ridiculous.

  15. I think Roman’s comment above is really the only legitimate one that speaks to any truth to what is going on. I think the author of the article has bit largely on AA points and probably refuses to look into how unsafe offshoring a/c maint really is. My airline took a plane out of service this week for an overhead bin not secured to the ceiling properly. It had recently been at a foreign repair station and was loaded ready to go. You’re not going to find those statistics unless you really dig. I suggest maybe an interview with the union leaders because honestly I didn’t find this article worthly of balanced at all.

  16. What I find “disgraceful” is Bernie Sanders and his ilk complete disregard for the rights of every individual. Bernie Sanders is little more than a garden-variety socialist, bordering on communist. He and his fellow travelers are the ones who deserve our disdain.

  17. @RT Flyer: yes! I was looking to see if OMAAT had written about that nightmare delay in Peru, but didn’t see anything.

    @Lucky: would love your take on that Lima-Dallas fiasco earlier this month by AA

  18. Well I would consider mr. sanders disgraceful for wanting to ruin the American dream and hinder the people who are chasing after it. How about finding a system of taxation that is fair to everyone, instead of focusing on cutting down the rich and small business owners who are providing jobs to Americans

  19. I think its pretty disgraceful that a presidential candidate would try to intervene in negotiations. It shows how out of touch he is if he thinks the mechanics aren’t paid a “decent wage” and benefits. They have a great comp package that the vast majority of Americans would love to have. In fact, that’s part of the reason outsourcing is an issue …

    Reasonable minds can debate outsourcing but the comment about wages and benefits is completely out of touch.

  20. Simple solution: make it cheaper to do business in the US by lowering taxes and cutting regulation. Problem solved.

  21. What % of the air travel market exists outside the US?
    That’s approximately the % of maintenance conducted ‘offshore’ to the US.

    Planes ain’t dropping out of the sky.

  22. “Simple solution: make it cheaper to do business in the US by lowering taxes and cutting regulation. ”

    Cutting regulations? Like letting Boeing certify its own aircraft? That kind of regulation cutting?

  23. I must be missing something. Both Endre (who hasn’t mentioned his paid F tickets in a while which I kinda miss) and Jay are complaining about ads in the article.

    What ads?

  24. @Santastico — “It is not his job to decide if the CEO is making too much money.”

    Normally this would be true, but keep in mind that Bernie Sanders is a Democratic Socialist … and we all know what that group wants to do, right? 🙁

  25. The flying public has no idea of the problem of “outsourcing maintenance “
    The large domestic airline that ferried
    A B737 back from El Salvador and had
    To declare a full blown emergency because
    Of a cane rats nest in the A/C packs that
    Required the the crew to go to O2 smoke masks and cockpit visibility to less than 2
    Feet. … and the pack were “supposedly
    Overhauled”.
    I find it amusing that a “aviation journalist”
    Does not investigate a story about aircraft maintenance without talking to the mechanics. But get there story from airline management.
    Never have I seen a story about the MAX
    Fiasco from a line mechanics side.
    All the ones I know said long ago they were not comfortable putting there family on the “MAX”.

  26. Parker has done very poorly but Sanders is right there with him in his crazy ideas. These are poor workers with bad conditions making reasonable demands but very well paid workers with great benefits who keep asking for more, more and more, at the expense of shareholders and passengers. U.S. airlines have the worst cabin crew ratings because the unions guarantee the worst of the worst are attracted to the airlines and will remain with the airlines 30 years past prime. Same nonsense with the mechanics union. I wish Boeing built simpler airplanes with the least amount of mechanical parts as necessary so we wouldn’t have to put up with this union ridiculousness

  27. @JMO – a free market is a solution to all your problems. If a manufacturer or an airline isn’t safe, then consumers won’t spend money there. If they don’t improve, they go out of business. It is in an airline’s best financial interest to be as safe as possible. In a free market, you always have to find a way to be better (which in this case means safer) and/or cheaper than your competition. Government regulation destroys competition. There’s mountains of evidence to support all of that. Your answer is always a free market solution. Happy researching!

  28. Qantas has 2 x a380 sit on the ground in LAX each and every day and QF does their line maintenance on these aircraft, they have their own facility but employ US staff, makes sense and is cheaper than doing the work in Australia.
    Heavy maintenance on the A380 is done in Abu Dhabi or Dresden.

  29. @AirFarer

    You are confusing me with the other Endre, he’s the one bragging about his paid first class tickets. I’m not sure if you use an ad blocker or not, but I see five ads displayed in this article alone. Too bad I can’t attach a screenshot here.

  30. As if Bernie Sanders knows anything about running an airline or any business for that matter. Read the headlines and jumped to comments.

  31. Lucky, you have a problem, you do not like Doug Parker, a attitude that should have no relevance to this article . If the Board of AA consider a salary and bonus of $31M a fair salary for his contribution to achieving a $1.8 billion profit ,that’s the way it goes, how he achieves it should not concern you! As a AA shareholder I personally do not have a problem.
    It is very interesting to note from the comments already made that AA are the airline with the lowest rate of outsourcing of the major US Airlines a point missed by Bernie Sanders, why he is even getting involved in this situation begs the question, one can only assume he must consider he could possibly pick up a few votes when the primary’s come around( he has no chance in my humble opinion,). Go Doug!!
    P.s. FYI I. Live in Australia,we paid Alan Joyce CEO of Qantas (Australia,s national airline) AUD$25m for running a Airline 1/3 the size of AA. Share price has gone up 25% in last 12 months.

  32. @john – define “so many”
    The number of people whose deaths can be specifically and exclusively linked to an airline manufacturer’s error is statistically negligible relative to the number of people who travel.

  33. Ben,
    In regards to this article… You are touching a subject you have no idea what you are talking about. Your facts are way off!! For one- When American went into bankruptcy with 5billion dollars cash!! Do you call that being bankrupt??? Then slahed the workers pay by 33% which till this day has not been recouped!!! Then froze employees pensions and wanted the government to cover it!! I must say Ben you haven’t been through that pain. In reference to the plane flying down south and sit there and have mechanics work on it… Thats not a problem… But when the plane flys into Miami amd lands at 4am and leaves at 11pm without any of AA mechanics looking at it.. That’s where the problem comes in. You are not doing the same in the US as you do in south America. I lost a lot of reapect for you Ben. You apoke on something that you do not have tour facts right and tge pain the employees and there families went through bankruptcy.

  34. Who the hell are you anyway – a labor historian? How do you know how the corporation is benefitting on the backs of those who do the work that makes their money? And how disgracefully stupid that you would utilize a comparison with other screwed workers in reaching a conclusion on what is fair.

  35. I’m guessing you might know something about being a passenger and frequent flyer miles. I’ve been an AA mechanic for 35 years and you don’t know much about the things you talk about in this article. Perhaps next time ask someone who might. Most of your talking points are either partially or totally incorrect. Stick with talking about what you know.

  36. F*ck Bernie Sanders. His opinion to be relevant when he stayed in the 2016 primary months longer than his candidacy was viable, aiding and abetting the election of Donald Trump.

  37. I’m guessing that when all is said and done, the mechanic that sabotaged the plane did not do so “because of this dispute.”

  38. In short Bernie Sanders is a Twit who could not hold down a job, any job, in the public sector, so he needs to keep his mouth shut and out if the discussion. As for the airline I would rather fly on a plane that has had its upkeep done in a nonhurried environment. Rushing to do maintenance is a mistake in any arena. I have worked in the aviation industry and have seen firsthand what happens when someone gets in a hurry to do a rush job. I do not want to trust my life to that. As for the CEO I do think he is overpaid but so are professionals in many areas like athletes. As for the unions I have no love for those bloodsuckers they feed off the fears of the employees. I have been a part of two unions in the end they both screwed me just like they screw the companies. Bernie should quit pandering to the unions and spend that time on his wife and pray she doesn’t kick him out on his ass.

  39. Lucky, perhaps you should run for office? You certainly have mastered the craft of talking out of both sides of your mouth. Although a long time reader and admirer of the thoroughness of your posts, your comments here are enough to make me consider unsubscribing. You’ve been afforded the power to stand up for what is right due to the success of this blog. Take a stance and use your voice to do the right thing! Most sincerely, Scott

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