AMR/American Announce 15,000 Job Cuts

[ZYX2]

This will be tough for Tulsa, there's no doubt about it. I have a feeling the effects will be similar to Boeing leaving Wichita.

My heart goes out to all AA families across the country as they face the oncoming struggle.

[Pete]

Wichita will lose about the same amount of jobs: 2,100.

AMR employs about 6,500 in Tulsa so there should still be about 4,000 left. However, there is a good chance more of those jobs will be lost down the road, as has been the trend for some time now.

[venture]

Does anyone know if they will offer early retirement, incentives for voluntarily leaving, etc.

Mostly likely no. The window for that was before Chapter 11. The only fall back is any plan the unions would have had for them.

[venture]

Wichita will lose about the same amount of jobs: 2,100.

AMR employs about 6,500 in Tulsa so there should still be about 4,000 left. However, there is a good chance more of those jobs will be lost down the road, as has been the trend for some time now.

I think TUL is the last major maintenance base now except for some smaller line facilities in like New York and LA. Kansas City was the last one they shut down and most of that work came to TUL and AFW. Now with AFW gone, TUL is the last. That should have them in a good position to remain open, but they can probably still get hit. Of course the wildcard in all this is who is going to try to take over AMR. US Airways, Delta, and TPG are all interested in American. Delta more than likely is just trying to prevent a US Airways/American merger. TPG is a big investment group that would either assist with a US/AA integration or work to keep AA independent. If consolidation is the path, I would expect AMR to dump as much as they can in Chapter 11 before securing a deal with US Airways.

For those that aren't away, AMR is more than just American Airlines...here are all the subsidiaries...

American Airlines
AA Real Estate Holding
Admirals Club, Inc.
American Airlines de Mexico, S.A.
American Airlines de Venezuela, S.A.
American Airlines Marketing Services LLC
American Airlines Realty (NYC) Holdings, Inc.
American Airlines Vacations LLC
American Aviation Supply LLC
Packcall Limited
Texas Aero Engine Services, L.L.C, dba TAESL
AMR Eagle Holding Corporation
American Eagle Airlines Inc. a regional feeder airline for AA
Eagle Aviation Services
Executive Airlines Inc., operating American Eagle's ATR aircraft fleet
AMR owns a 20% share of Aeroperlas

I bolded the two regional subsidiaries of AMR. There has been long standing rumors that they will sell them off. Executive is leaving the DFW hub and will go back to operating only in the MIA and SJU hubs (San Juan PR). Wouldn't be shocked to see that one spun off. American Eagle will likely get spun off much like how Continental spun ExpressJet off. At least once they get the scope release and costs down that are needed. Now American Eagle is not the same as American Connection. Those are different airlines operating under the American brand much like other airline agreements. Eagle is wholly owned and an airline itself.

[BG918]

It will be interesting to see if (when?) AA is bought out by USAir if they keep the Tulsa maintenance base. They could decide to just outsource all the maintenance like the other major airlines. Hopefully they streamline things and are able to keep and eventually expand the Tulsa base.

[Snowman]

This will be tough for Tulsa, there's no doubt about it. I have a feeling the effects will be similar to Boeing leaving Wichita.

My heart goes out to all AA families across the country as they face the oncoming struggle.

As far as the feelings of Wichita, it also had the affects of losing the name Boeing (which had been a cornerstone in the community for decades though had been shrinking as a presence there by the time it left) and the political backlash of politicians backing the company for years in contract bids then get backstabed.

[Just the facts]

End the tax cuts that actually give business incentives to move out of the country, thereby sacrificing American jobs for higher profits and all in the name of so-called, "free trade."

What tax-cuts are these?

[Swake2]

What tax-cuts are these?

A big one is that healthcare is a government run service in most countries where here the cost is paid for largely by employers.

[MikeOKC]

What tax-cuts are these?

Remove Incentives to Ship Jobs Overseas


Taxes: Current law allows companies to defer paying taxes on their overseas income indefinitely while deducting many of the expenses associated with moving offshore – this provides a double subsidy to U.S. companies that ship work overseas, effectively penalizing those companies that keep jobs in the U.S. Ending overseas tax breaks would generate an additional $7 to 12 billion a year in tax revenue and eliminate the perverse incentive to move work abroad to avoid paying taxes.

Public Contracts and Subsidies: Many companies that ship work overseas receive billions of dollars worth of government procurement contracts, subsidies and state and local tax abatements. These taxpayer-financed benefits usually come with very few strings attached, allowing companies to skim additional profits by performing publicly funded work overseas. Laws at the local, state and federal level should be reformed to ensure our taxpayer dollars are not subsidizing the destruction of American jobs.

Currency: A number of U.S. trading partners – China in particular – manipulate the value of their currency relative to the dollar to give their exports to the U.S. an artificial cost advantage, while making American products more expensive. This puts American producers and workers at an impossible cost disadvantage, effectively shutting them out of export markets and undermining their competitiveness at home. The U.S. must take immediate and aggressive action to ensure that the dollar is appropriately valued and withdraw trade benefits from countries that insist on manipulating their currency to unfair advantage, in violation of international trade rules.

Trade Laws: Domestic trade laws enable the government to redress unfair trade practices that give an illegitimate advantage to overseas production. These laws were intended to provide the first line of defense for American producers and workers, yet they are very poorly enforced. The World Trade Organization has weakened our ability to use these laws, and on-going trade negotiations may undermine these laws even further. We must vigorously enforce our domestic trade laws, defend them from challenge, and work to strengthen them in the future.

Trade Agreements: Trade deals such as the North American Free Trade Agreement (NAFTA) create new rights, but no responsibilities, for companies that ship jobs overseas. NAFTA contains strong legal protections for companies investing abroad and guaranteed access for their products into the U.S. market. But NAFTA provides no comparable protections for the rights of workers and the environment, allowing companies to escape their international obligations by shipping work overseas. We must fundamentally reform flawed trade rules to hold companies accountable for respecting workers’ rights no matter where they produce.

Exporting America - Outsourcing Solutions

This is all very relevant as to why we are losing these AMR jobs.

[Richard at Remax]

I think for the most part that Unions are there to do good, but you can't blame companies for wanting to go oversees when you look at the sweetheart healthcare deals and ridiculous pension/retirement funds out there that they have to deal with. Plus you know it says a lot when you can make your product overseas, pay for cost of shipping, and still save yourself hundreds of millions of dollars like the bay bridge project http://www.npr.org/2011/09/16/140515...new-bay-bridge

And on a side note, my boss works out of new york city, and says that there are teachers up there that are terrible and should be fired but since they are union, they can't fire them, so they sit around in a building all day. This too http://www.nypost.com/p/news/local/b...5idPYynCnVJHyO WTF! Why not fire these poeple and use that money to pay the good teachers more. I just don't understand that mentality.

[MsProudSooner]

Wow.

This has the potential to be really devastating for Tulsa, and yes we in OKC will feel it.

Does anyone know if they will offer early retirement, incentives for voluntarily leaving, etc.

Historically, AMR has offered early retirements and incentives for leaving prior to doing layoffs. But I don't know if they will in this instance.

[Just the facts]

[indent] Remove Incentives to Ship Jobs Overseas


Taxes: Current law allows companies to defer paying taxes on their overseas income indefinitely while deducting many of the expenses associated with moving offshore – this provides a double subsidy to U.S. companies that ship work overseas, effectively penalizing those companies that keep jobs in the U.S. Ending overseas tax breaks would generate an additional $7 to 12 billion a year in tax revenue and eliminate the perverse incentive to move work abroad to avoid paying taxes.

Let's look at this first one. I work for a company that operates in 87 countires. They pay taxes on income earned in those 86 foreign countires. 75% of all their revenue is generated outside the US. If they never bring these profits back to the US why do you think the US government is entitled to any of that money?

[Snowman]

Taxes: Current law allows companies to defer paying taxes on their overseas income indefinitely while deducting many of the expenses associated with moving offshore – this provides a double subsidy to U.S. companies that ship work overseas, effectively penalizing those companies that keep jobs in the U.S. Ending overseas tax breaks would generate an additional $7 to 12 billion a year in tax revenue and eliminate the perverse incentive to move work abroad to avoid paying taxes.

This will likely only achieve worldwide companies headquartered in the US to move their headquarters out of the US and maybe leave a regional segment.

[lasomeday]

Remove Incentives to Ship Jobs Overseas


Taxes: Current law allows companies to defer paying taxes on their overseas income indefinitely while deducting many of the expenses associated with moving offshore – this provides a double subsidy to U.S. companies that ship work overseas, effectively penalizing those companies that keep jobs in the U.S. Ending overseas tax breaks would generate an additional $7 to 12 billion a year in tax revenue and eliminate the perverse incentive to move work abroad to avoid paying taxes.

Public Contracts and Subsidies: Many companies that ship work overseas receive billions of dollars worth of government procurement contracts, subsidies and state and local tax abatements. These taxpayer-financed benefits usually come with very few strings attached, allowing companies to skim additional profits by performing publicly funded work overseas. Laws at the local, state and federal level should be reformed to ensure our taxpayer dollars are not subsidizing the destruction of American jobs.

Currency: A number of U.S. trading partners – China in particular – manipulate the value of their currency relative to the dollar to give their exports to the U.S. an artificial cost advantage, while making American products more expensive. This puts American producers and workers at an impossible cost disadvantage, effectively shutting them out of export markets and undermining their competitiveness at home. The U.S. must take immediate and aggressive action to ensure that the dollar is appropriately valued and withdraw trade benefits from countries that insist on manipulating their currency to unfair advantage, in violation of international trade rules.

Trade Laws: Domestic trade laws enable the government to redress unfair trade practices that give an illegitimate advantage to overseas production. These laws were intended to provide the first line of defense for American producers and workers, yet they are very poorly enforced. The World Trade Organization has weakened our ability to use these laws, and on-going trade negotiations may undermine these laws even further. We must vigorously enforce our domestic trade laws, defend them from challenge, and work to strengthen them in the future.

Trade Agreements: Trade deals such as the North American Free Trade Agreement (NAFTA) create new rights, but no responsibilities, for companies that ship jobs overseas. NAFTA contains strong legal protections for companies investing abroad and guaranteed access for their products into the U.S. market. But NAFTA provides no comparable protections for the rights of workers and the environment, allowing companies to escape their international obligations by shipping work overseas. We must fundamentally reform flawed trade rules to hold companies accountable for respecting workers’ rights no matter where they produce.

Exporting America - Outsourcing Solutions

This is all very relevant as to why we are losing these AMR jobs.

Wow, so you are the spokesperson for the Unions.

The reason these companies are failing is because of the Unions. They protect the lazy and don't reward hard workers. So, the hard workers leave and go to better jobs where they don't have to pay union dues. The lazy workers stay and continue to do bad work causing higher costs and less production. The companies continue to pay more for bad work because of the Union contracts that does not allow them to get rid of the bad employees. The only way to solve the problem is to go bankrupt. The bankrupt company get out of the union contracts and then layoff people. They hope to get rid of the lazy employees and then the process begins again.

[RodH]

So where are the hard workers working now?

[Just the facts]

This will likely only achieve worldwide companies headquartered in the US to move their headquarters out of the US and maybe leave a regional segment.

Having worked for several multi-national corporations over the years I can tell you many companies are primed for this type of move right now. All they need is a good reason the shareholders will buy. Under the guise of "diversity" American companies have been stocked with non-American executives. Many have zero loyalty to the USA.

[Oil Capital]

Yeah, by preventing cash-rich corporations from going through bankruptcy - as nothing more than a wink and a nod in a process to bust labor unions and pass the pension buck.

I agree with the Pat Buchanan's on the right and the Bernie Sanders' on the left, that this stuff is anti-American, possibly criminal, and needs to be stopped. End the tax cuts that actually give business incentives to move out of the country, thereby sacrificing American jobs for higher profits and all in the name of so-called, "free trade."

What silliness

[Oil Capital]

A big one is that healthcare is a government run service in most countries where here the cost is paid for largely by employers.

??? In what sense is that a tax cut?

[MikeOKC]

What silliness

Nothing silly about it. Many people believe just what I said in my post. What you really mean is you think it's silly. That's fine. There's a lot of uninformed posters here.

[BoulderSooner]

a much better solution would be to allow those overseas profits .. to be returned to the US tax free

this would dump billions into the US economy .. and create jobs ..

[Swake2]

??? In what sense is that a tax cut?

It's not a tax cut, but it is a lowered cost of doing business

[MsProudSooner]

I think TUL is the last major maintenance base now except for some smaller line facilities in like New York and LA. Kansas City was the last one they shut down and most of that work came to TUL and AFW. Now with AFW gone, TUL is the last. That should have them in a good position to remain open, but they can probably still get hit. Of course the wildcard in all this is who is going to try to take over AMR. US Airways, Delta, and TPG are all interested in American. Delta more than likely is just trying to prevent a US Airways/American merger. TPG is a big investment group that would either assist with a US/AA integration or work to keep AA independent. If consolidation is the path, I would expect AMR to dump as much as they can in Chapter 11 before securing a deal with US Airways.

For those that aren't away, AMR is more than just American Airlines...here are all the subsidiaries...

American Airlines
AA Real Estate Holding
Admirals Club, Inc.
American Airlines de Mexico, S.A.
American Airlines de Venezuela, S.A.
American Airlines Marketing Services LLC
American Airlines Realty (NYC) Holdings, Inc.
American Airlines Vacations LLC
American Aviation Supply LLC
Packcall Limited
Texas Aero Engine Services, L.L.C, dba TAESL
AMR Eagle Holding Corporation
American Eagle Airlines Inc. a regional feeder airline for AA
Eagle Aviation Services
Executive Airlines Inc., operating American Eagle's ATR aircraft fleet
AMR owns a 20% share of Aeroperlas

I bolded the two regional subsidiaries of AMR. There has been long standing rumors that they will sell them off. Executive is leaving the DFW hub and will go back to operating only in the MIA and SJU hubs (San Juan PR). Wouldn't be shocked to see that one spun off. American Eagle will likely get spun off much like how Continental spun ExpressJet off. At least once they get the scope release and costs down that are needed. Now American Eagle is not the same as American Connection. Those are different airlines operating under the American brand much like other airline agreements. Eagle is wholly owned and an airline itself.

It's my understanding is that Eagle has been spun off or is in the process of being spun off. I know they've been working to separate their data from AMR's over the past few months. I was told there was a December 1, 2011 deadline for that.

[venture]

It's my understanding is that Eagle has been spun off or is in the process of being spun off. I know they've been working to separate their data from AMR's over the past few months. I was told there was a December 1, 2011 deadline for that.

It was never done before Chapter 11. They stopped the process, for now, and took Eagle and Executive into chapter 11 with them.

[bretthexum]

Wow, so you are the spokesperson for the Unions.

The reason these companies are failing is because of the Unions. They protect the lazy and don't reward hard workers. So, the hard workers leave and go to better jobs where they don't have to pay union dues. The lazy workers stay and continue to do bad work causing higher costs and less production. The companies continue to pay more for bad work because of the Union contracts that does not allow them to get rid of the bad employees. The only way to solve the problem is to go bankrupt. The bankrupt company get out of the union contracts and then layoff people. They hope to get rid of the lazy employees and then the process begins again.

I'll trust "lazy union" work on airplanes over "the cheapest bid" any day.

[Oil Capital]

Nothing silly about it. Many people believe just what I said in my post. What you really mean is you think it's silly. That's fine. There's a lot of uninformed posters here.

Indeed. Here are The facts: America has higher corporate tax rates than almost every other country. America is the only country that even purports to tax profits earned outside our territory. Other countries only tax income earned within their borders. Profits of American companies doing business in other countries are taxed by the country where earned, regardless of whether the profits are returned to America. The only tax "benefit" is entirely the result of the relatively low rates of taxation imposed by almost every other country in the world.

It is disingenuous, to say the least, to claim that we give tax cuts to companies for moving jobs overseas. if you have a problem with the rates of tax paid by American companies doing business elsewhere, you should take it up with those countries and try to get them to raise their corporate tax rates to equal ours.