American Eagle Mechanics, Bag Handlers Split on Concessions (1) c.2012 Bloomberg News (Updates with AMR comment in fourth paragraph.)

Aug. 24 (Bloomberg) -- American Eagle mechanics rejected a new contract with parent AMR Corp. to reduce labor costs as the company restructures in bankruptcy, while baggage handlers and other airport ground workers approved givebacks.

Mechanics turned down the plan 65 percent to 35 percent, as baggage handlers and other so-called fleet service workers voted 67 percent to 33 percent to accept concessions, the Transport Workers Union said today on its website. American Eagle ferries passengers on smaller planes to U.S. hub airports of AMR’S American Airlines.

The results of the first votes by American Eagle workers gave AMR only a partial victory as American Airlines awaits a court ruling on imposing concessions on pilots who rejected the carrier’s last offer. Fort Worth, Texas-based AMR said in March it wanted to cut annual spending by $75 million at Eagle while paring as many as 600 total jobs.

“We recognize these are difficult decisions and respect the rights of our people to voice their opinion in the voting process,” said Bruce Hicks, an American Eagle spokesman.

The fleet service vote moves the company “closer to successfully restructuring American Eagle,” he said. The carrier hasn’t decided whether to ask U.S. Bankruptcy Judge Sean Lane for authority to throw out the mechanics’ contract and impose concessions, Hicks said.

American Eagle flight attendants are voting now on a tentative agreement, while the regional airline’s pilots union is completing contract language before deciding on a vote. Attendants, mechanics and baggage handlers at American already have approved cost-cutting accords.

The six-year agreements voted on today don’t include layoffs. Pay for baggage handlers and other airport ground workers will be frozen for 18 months. Both proposals also contained 1.5 percent pay raises in 2015 and 2016, overtime paid at 1.5 times the base rate and a reduction in the company’s contribution to 401(k) plans.

--Editors: John Lear, Niamh Ring

To contact the reporter on this story: Mary Schlangenstein in Dallas at maryc.sbloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufnerbloomberg.net