January 19, 2018
Participants for AMFA:
Bret Oestreich – National Director
Earl Clark – Director, Region I
Will Abbott – Director, Region II
Bob Cramer – Airline Representative, Local 4
Craig Hamlet – Airline Representative, Local 11
Shane Flachman – Airline Representative, Local 18
Mike Young – Airline Representative, Local 32
Lucas Middlebrook – AMFA Counsel
Peter Manikowski – AMFA Economist
Participants for Southwest Airlines:
Gerry Anderson – Sr. Director, Labor Relations
Alexa Kern – Labor Relations
Bill Venckus – Director, Labor Relations
Mark Lyon – Sr. Manager, Labor Relations
Scott Colling – Regional Director, Central Region
John Brutlag – Director of Aircraft Standards
John Donnelly – Manager, Financial Planning
The Negotiating Committee is providing this update to the AMFA Membership at Southwest Airlines. This report is the only official authorized source of negotiating communications by the Committee.
The parties met in Washington, DC for a scheduled two-day session beginning Thursday, January 18, 2018. Your employer, Southwest Airlines, is not interested in achieving a deal to reward you for your hard work and dedication – this was made abundantly clear to your Committee by the Company this week.
The Company provided a long-awaited counter-proposal to commence the session, which included some of the following:
- Need for the same massive changes to scope removing historic work from you and sending it to vendors with little to no job security protections for you;
- No additional money in base wages since August 2016;
- Agreed with AMFA proposal to increase license premiums to $2.50 per license and skill premium to $.63 per hour;
- Increased ratification bonus by 7% to 27% of 2017 earnings, which is approximately a lump sum of $66.9 million;
- Presented a Maintenance Control all-in rate approximately 2.8% above American Airlines;
- Offered Technical Instructors $1.75 above all-in rate of AMT;
- Continued to refuse to entertain caps on insurances or improvements to 401(k), instead offering “me-too” clauses if another group happens to break the ice on those issues in the future.
Your Committee immediately began review of the proposal, with our focus on getting a deal to you as soon as possible. We provided a counterproposal to the Company, which proposed to keep our Article 2, Scope at current book. We felt this would allow the parties to focus instead on the remaining economic issues and produce a tentative agreement for you to vote on. After two passes between the parties, our latest proposal to the Company was highlighted as follows:
- Article 2 – Scope: to remain at current book;
- 17% snap-up in wages on date of ratification followed by 3.25% scale increases each year of a proposed 5-year agreement beginning in August 2018;
- Full retroactive pay in the form of a ratification bonus estimated at $99.9 million;
- Agreed with Company proposal on Maintenance Control compensation;
- Agreed with Company counter-proposal on Technical Instructor compensation;
- Agreed to Company proposal on 40 hours only of vacation carry-over;
- Agreed to Company proposal to keep 401(k) at 9.3% with me-too language;
- Agreed to Company proposal on no insurance caps with me-too language;
- Offered to allow LOA #1 to sunset carrying only the Outsourcing Liaison Representative position into the body of the contract, which means we were not asking to maintain the mechanic to aircraft ratio or other protections contained in LOA #1;
- Agreed with Company proposal on skill premium amounts.
As you can see from all of the “agreed” notations above, your Committee made a number of very difficult decisions in order to make substantial movement in the Company’s direction with the specific intent of reaching a tentative agreement during this session. We felt that narrowing the sizeable differences between the two parties on Scope would allow each side to negotiate the remaining economic items and provide a deal for you to vote on. However, unfortunately, the Company was not interested in generating a deal in this manner – even after more than five years of protracted negotiations. Instead, the Company message was delivered loud and clear to your Committee: We (the Company) must have the changes to scope we have proposed, there is no deal without it. In addition, the Company does not feel any additional economics are warranted in return for language changes to scope that would remove large portions of your protected work forever.
The Company position is frustrating to say the least, and we know you will feel the same way after reading this update. It is clear now, more than ever, that the Company tagline of wanting to reward you is nothing more than that – a tag line created for a Russell McCrady video. In response, your Committee will begin internal preparation for our next proposal, which, if the Company absolutely must have its massive scope changes, will account for that with a total review of all items previously tentatively agreed to by the parties.
As always, stay engaged with your union updates and officers. And, as always, let us watch what the Company does as opposed to what they say in written updates or video messages. We, as a Committee, were humbled by the outpouring of support during our road shows and from the many messages and calls we received during this session. We thank you for this continued support. The solidarity that we have seen since our last session in August has been overwhelming, and we look forward to continuing and increasing that solidarity as we fight for what you have rightfully earned.
Your Negotiating Committee