BACK TO THE TABLE
FEBRUARY 17, 1997
Just moments after American Airlines' pilots declared a potentially-crippling strike, President Clinton exercised his executive power and ordered a 60-day mediation period. While American Airlines' management and air travelers welcomed Clinton's action, the pilots' union wanted the president to stay out of the dispute. Elizabeth Farnsworth examines the president's action with Prof. Joseph Blasi of Rutgers University and Jerry Glass, a consultant who advises airline management on labor issues.
CHARLES KRAUSE: The strike at American Airlines came and went quickly Friday night, but the bitter labor struggle is hardly over. With President Clinton's unusual intervention, a special Federal Mediation Panel will now try to resolve key differences between the pilots and airline's management. But if the mediation effort fails, there could still be a strike at the end of 60 days. For more, we're joined by Joseph Blasi, a professor at Rutgers University School of Management and Labor Relations, and Jerry Glass, a consultant who advises airline management on labor issues. Gentlemen, thank you for joining us.
A RealAudio version of this segment is available.
February 13, 1996:
As American Airlines' pilots prepared to strike, two experts discuss the root causes of the airline's recent labor troubles and viewpoints of the pilots and management.
Browse the Online NewsHour's transportation and economic coverage.
The hopepage of the Allied Pilots Association, the union representing American Airline pilots.
Mr. Glass, was it a good idea for President Clinton to intervene to stop this strike?
JERRY GLASS, Airline Industry Consultant: In this particular case it was. American Airlines controls a lot of markets, and this was something that was necessary into to protect passengers to get them where they had to be over this holiday.
CHARLES KRAUSE: Prof. Blasi, what do you think? Was it a good idea?
JOSEPH BLASI, Rutgers University School of Management and Labor Relations: (New York) I think it was a good idea for the flying public, but it basically completely took the power out of the pilots' union. Their power to strike is pretty much all they really have. And I think there's a serious question as to whether a fair settlement can be gotten in the process as it goes forward.
CHARLES KRAUSE: So you're suggesting that the decision, the President's decision benefitted the management there, American Airlines' management?
JOSEPH BLASI: There's no question in my mind that the score now is management 1, pilots 0. The pilots, I think, basically got creamed in this part of the process, although I certainly was not in favor of a strike and was hoping it could have been averted.
CHARLES KRAUSE: Mr. Glass, do you think that this is a win for management?
JERRY GLASS: I don't think this is a win for anybody. American has suffered a tremendous amount through lost bookings and adverse publicity. Employees potentially were going to be out of work, so I don't see this as a victory for management at all. I think this is a very difficult situation, somewhat unique of late, and it was imperative that the President step in, and it was clear that the parties could resolve their differences.
CHARLES KRAUSE: Now, do you have any concern that this may set a precedent? It's been some 30 years since a president intervened in an airline labor dispute like this one. Could this mean--could this lead to the White House being involved in any future airline labor disputes?
JERRY GLASS: I think it's possible but you have to look at every labor situation separately. I think this was somewhat unique in that in this particular case the parties had been in negotiations for 22 months, I believe, and they had reached an agreement once before. It did get rejected. I'm not so sure that we're going to automatically see a repeat of this again. It's not something that the President does lightly. It also depends on what airline would be involved and the effect it would have on the marketplace if that carrier went on strike.
CHARLES KRAUSE: Professor, are you concerned that this may set a precedent?
JOSEPH BLASI: I think it may set a very dangerous precedent because I think I suspect the President may not have been properly advised by his advisers what the broader implications are of this strike. I think at stake is the entire legitimacy of pilots unions in the airline industry and whether pilots share in the continuing growth of American Airlines. And also I think it's really important to note here this is not an isolated incident at American Airlines. The issues at question in this struggle are going to come up at Continental; they're going to come up at USAir, and other major airlines.
CHARLES KRAUSE: Now one of those issues and one of the ones that is at the heart of this dispute has to do with regional jets and who's going to fly them. I wonder if, briefly, you could sort of explain what the issue is from the pilots' perspective?
JOSEPH BLASI: Well, as I understand it, the pilots' perspective is that now American Eagle, which is four companies under American Airlines, flies these commuter flights. Some people call them the puddle jumper flights. Those are basically turbo prop jets. Now the company wants to introduce a new technology which is regional jets that fly one thousand, eleven hundred, twelve hundred miles. Now, we need to note that approximately half of the domestic operations of American, as I understand it, are in flights under a thousand miles. The pilots' position is very simple. Their concern, as I understand it, is that if American Eagle pilots who are not part of the main pilots union are allowed to fly those regional jets, that little by little, the company will transfer more and more of its operations to these regional jets, which will have longer flying distance and basically take the company out from under their feet and pull away the economic opportunity that a growing airline presents. Everyone should realize that regional jets are the future of this industry, being able to fly point to point between Chicago and New York many times a day, like the shuttle flights that Southwest Airlines does. This is the future of the airline industry, and so the question is: Will American's pilots union participate in that future, or not? This is I think their main concern.
CHARLES KRAUSE: Mr. Glass, do you agree with what the professor says about these regional jets and their importance?
JERRY GLASS: They are very important but I couldn't disagree more. First of all, the role of the regional jet is well defined in the industry already. Regional jet agreements with respect to the major airlines exists at a number of carriers already. No. 2, the regional jet has a very defined role. Its role for the code sharing partner, that is the smaller carrier, feeds traffic into the larger carrier. It's ludicrous to suggest that a regional jet is going to be flying between New York and Chicago a la Southwest, as the professor states. The regional jet holds 50 seats. And you're looking at markets that clearly support 737's, 757 Airbus, 150, 160, 130 seat markets. So there is no way that regional jets are going to supplant American Airlines' pilots or jobs.
CHARLES KRAUSE: If that's the case, why are the pilots so concerned about it?
JERRY GLASS: I'm frankly perplexed as to why they are. As I said, this is in agreement. This is in place already. Delta Airlines has an agreement with its pilots unions to permit this. Northwest Airlines has agreements to permit this. United, to some extent on a limited basis, has it. Regional jets are here to stay. They actually will help American Airlines grow because what it will do, it will feed more traffic to American Airlines, fill their bigger jets, create additional traffic, and allow American to grow further. Most importantly, as I understand it, in the agreement that failed ratification, American offered job protections to its pilots, and in addition limited the number of aircraft that could be flown by AMR American Eagle, the commuter. So there were plenty of protections in place.
CHARLES KRAUSE: All right, let me quickly--this clearly is an issue that goes before this Federal Mediation Panel. Professor, tell me, what does the panel do? It has 60 days to do something. What is that?
JOSEPH BLASI: Well, first of all, in the first 30 days the panel is going to try to come up with findings, with the facts, as it understands it, and it's going to try to come up with a proposed settlement. Then there will be 30 days in which they'll try to see if they can get the parties to agree on this issue. Now we have this magic number of 60 days in our minds. This period is frequently expanded so it could go on for up to a hundred or two hundred days, so people shouldn't have that magic number. At the end of this period, however, either the pilots or the company can accept or reject what the Presidential Emergency Board suggests. If they do that, then the pilots have a right to go on strike again. I think it's very important that people understand the President or the Presidential Emergency Board cannot impose binding arbitration or impose the settlement; only an act of Congress can do that.
CHARLES KRAUSE: All right. Well, gentlemen, our time is up. I want to thank you both. I suspect we'll be revisiting this issue in the weeks and months ahead. Thank you very much.