The head of American Airlines apologized on Monday for not telling workers that top executives would receive bonuses and other benefits despite the company's financial crisis but unions threatened to vote again on ratified concession pacts aimed at staving off bankruptcy.
"I stumbled," said Don Carty, the chairman and chief executive of American parent AMR Corp. "I made a mistake ... I am sorry."
American's three major unions have expressed outrage at news last week of special pension funding -- that would be paid even in bankruptcy -- for senior management. The plans included in a federal filing emerged just as workers agreed to deals that would slash pay for most groups by 15 percent to 23 percent and spark thousands of layoffs.
"We're still on the precipice of bankruptcy," Carty said, adding he had not talked to unions about plans two of them announced to vote again on the concession plans aimed at saving American US$1.8 billion a year in labor costs.
"The precariousness of our financial condition simply can't sustain any action that would delay or prevent the consensual restructuring measures from taking place on schedule," Carty said.
Carty has said that in bankruptcy, the carrier would seek an additional US$500 million in labor-cost cuts and there would be several thousand more lay-offs.
The carrier, which narrowly avoided bankruptcy last week when unions approved the deals, said it would file for Chapter 11 protection if any one of the unions voted against the cuts.
Market players saw the fight over the executive perks as sending the company deeper into dangerous territory and they sent AMR shares tumbling by 23 percent to close at US$3.85 in active trading on the New York Stock Exchange, where it was the percentage loss leader.
The union that represents about 34,000 mechanics and ground workers at American Airlines said on Monday it wanted a new vote on the concession pact it ratified last week.
"American was guilty of a material breach of its obligation to provide relevant information," said Jim Little, a senior member of the Transport Workers Union, in a communication with members on the union's Web site.
"The only way to assure credibility is to allow a full re-vote with the full membership knowledge of all relevant company actions," Little said.
The Association of Professional Flight Attendants, which represents about a quarter of American's 100,000-strong work force, has already called for a new vote on the concessions deal it signed, saying its ratification last Wednesday had been tainted by revelations of the executive compensation packages.
Standard & Poor's said it may still cut its ratings on AMR and its American Airlines unit because the controversy over executive pay threatens the company's turnaround plan.
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