American Airlines sent a jolt throughout the community last week with the disclosure that more than 1,400 workers in South Florida were warned of possible layoffs. Don’t panic. Actual layoffs are likely to be far fewer and the impact less significant.
The numbers need to be read with caution. They do not represent either a target figure for reductions nor actual projected job losses. By law, the airline must send such letters to anyone who might possibly be affected by pending work reductions. Common sense suggests this is the right thing to do. But airline officials say this is a worst-case scenario and that only about 40 percent of those getting notices stand to lose their jobs.
Other factors are likely to lessen the impact. Many lost jobs will be out-sourced to other companies, a routine procedure in cost-cutting moves. Those companies will be urged to hire former American employees. With their experience, they should be at the head of the line for openings. Some workers will be affected by being “bumped” as a result of seniority, but they can seek another position. Attrition, early retirement options and other moves will also play a role.
No one is trying to sugarcoat the bankruptcy process. American is fighting to stay in business — and succeeding, by the way, amid the turmoil and the sluggish economy. But bankruptcy is messy and painful. People get hurt.
Some workers will lose their jobs. Others will be downsized or see pay cuts. Jobs will be out-sourced, benefit reductions are likely, work rules will change.
That’s par for the course in any bankruptcy. And the readjustment is more wrenching when it’s so long overdue. American lost some $10 billion in 10 years because it was the last of the so-called legacy airlines to file for bankruptcy in an attempt to improve its labor situation and its bottom line.
But improve it must because a healthy airline is critical to the region’s economic wellbeing.
First, it’s one of the community’s biggest private employers, with some 9,000 workers. The worst thing that could happen to them is that the airline would go the way of Eastern or Pan American. Most of the unions — the pilots are the only holdouts at this writing — get it. They’re working with management to make this work, but they understand that American couldn’t afford to wait any longer before acting.
Second, American is also, by far, the largest carrier at Miami International Airport. The airline’s success is crucial to the healthy operation of MIA, which is a huge driver of the region’s economy.
The job picture in South Florida has taken some big hits lately, including 920 job losses at the Jackson Hospital System and 800 more at the UM Medical School this year. United Space Alliance lost 1,942 jobs in 2011. That makes it even more important for American to get through this emergency with prospects for a better future.
Airline officials say the growth picture is encouraging. They project 25.6 million passengers at MIA this year, compared to 24.7 million last year. Both are record numbers. New flights to Latin America and Spain have been added.
As the bankruptcy process unwinds, some steps can be taken to lighten the load. Gov. Rick Scott has reportedly asked business and labor groups to develop a plan to help those who lose their jobs, perhaps by retraining. Good move. The governor should take a leadership role in this task.
This is a time for all of South Florida to stand together for the sake of our fellow workers and their families.