AMFA National Director Response Letter to Southwest Airlines' Exercise to Identify Cost Savings
Updated On: Apr 14, 2020
April 14, 2020
Anthony Wafer, Senior Director Labor Relations
Southwest Airlines Co.
Sent via email: Anthony.Wafer@wnco.com
Dear Mr. Wafer
Earlier today, April 14, 2020, AMFA Representatives consisting of Airline Representatives for the four AMFA Locals representing members at Southwest -- Local 4, Dan Burgess; Local 11, Craig Hamlet; Local 18, Wayne Lampley; and Local 32, Ken Patrick; as well as AMFA counsel, Lucas Middlebrook, Esq. -- met via web conference with you and other management representatives. That meeting resulted from your request on April 1, which came a few days after I attended a meeting at Russell McCrady’s invitation on March 26 concerning the impact of the COVID-19 pandemic on the carrier. AMFA’s participation in both meetings was to listen and confer, but otherwise without any precondition or waiver of rights.
In today’s meeting you provided the AMFA delegation with three written presentations (one for each CBA AMFA administers at Southwest) entitled "Proactively Identifying Savings Options." This outlined a scale of concessionary amendments from the existing CBAs with AMFA to "potentially implement on October 1, 2020." You offered some comments throughout the presentation. There was no bargaining and no agreements were made, however our delegation indicated it would respond. This letter is that response.
AMFA believes it is important to maintain open and frequent communication with management during the pandemic. Both parties to the current contract should work to maintain it by conferring and reaching mutual agreement over disputes that may arise whenever possible, in accordance with contractual commitments made. Where mutual resolution is not possible, then prompt and strict compliance with the mandates of Railway Labor Act will best serve the parties.
In regard to the cost "savings" referenced in your presentations, an immediate opportunity is a mutual cessation of pending federal litigation. For that purpose, I reiterate, once again, that AMFA is willing to dismiss its claims with no money changing hands in return for the same by the Company. In addition, AMFA stands ready to cooperate in the return of outsourced maintenance work in order to help the Company achieve cost reductions from vendors while capitalizing on existing pools of experienced labor at a fixed cost.
As you know, pursuant to Article 29 of the Mechanics and Related CBA, neither side can reopen Section 6 bargaining until August 16, 2023. The same holds true for Article 28 of the Facilities Maintenance Technician CBA (Nov. 16, 2022). Your April 14 presentation did not address that contractual limitation; yet AMFA has not waived its rights under Article 29 of the Mechanics and Related CBA (Article 28 of FMT CBA), nor does it intend to. Furthermore, Southwest has not identified any legal authority to insist upon contract bargaining before the amendable date of the applicable contracts. In addition, § 115 of the CARES Act places restrictions on such concessionary demands of any carrier accepting federal aid, were Southwest to finally conclude its negotiations with the Treasury Department and get that money into the hands of its frontline employees. We implore the Company, and financial prudence suggests that Southwest should conclude those negotiations promptly in the interests of its employees and the flying public.
AMFA does not agree to the changes referenced in management’s presentation today, which would obviously come at the cost of abandoning a contract with the Mechanics and Related craft, which took the parties nearly seven years to reach just last year. The duration of the pandemic is unknown and may even be peaking. The lingering effects of it are even less determined. Whether Southwest will avail itself of the ample relief under the CARES Act remains unclear. Indeed, in today’s meeting you spoke of the CARES Act grant money as an "if" as opposed to a "when."
Hence, the basic financial situation remains, very much, in flux. To date, the Company has failed to even engage with AMFA to collaboratively discuss viable temporary leave options – choosing instead to act unilaterally in that capacity. I previously wrote to advise you of our position on those unilateral actions. Furthermore, even assuming the need for cost reductions, immediate prudent steps such as dividend suspension or temporary executive pay reform have yet to be addressed. In fact, Gary Kelly has still only reduced his base compensation by ten percent (10%); whereas a large majority of competitor CEO’s have sacrificed much more of their own compensation during these uncertain times. This is concerning to AMFA – especially now in the face of requests for labor concessions. In this context, meaningful assessment of the need for labor concessions, let alone bargaining, is premature. As such, insistence upon it can only undermine management’s credibility, or worse, foster suspicion that the crisis is being exploited.
I hope this letter clarifies AMFA’s position in general. For further discussion or to share information, please contact my office directly.
AMFA SWA ALRs
Gary Kelly, SWA CEO
Mike Van de Ven, SWA COO
Tammy Romo, SWA CFO
Russell McCrady, SWA, VP Labor Relations
Kurt Kinder, SWA, VP Maintenance Operations