Labor Issues Simmering at American, Strike Coming?

Tensions have been growing at American for the past few weeks as negotiations between the airline and its cabin crew union have failed to produce an agreement. Basically, American is trying to trim its labor costs, which it claims are considerably higher than its competitors'. The union is skeptical, and anyway has spent two years fighting for pay raises and other changes it feels are overdue.

Now, both sides are at an impasse. The most recent round of talks ended a week ago with no resolution, and it's up to the National Mediation Board (NMB), an independent government agency that facilitates labor negotiations for the railroad and airline industry, to decide what happens next. It can either schedule more talks, or declare a 30-day "cooling-off period," after which the union could strike.

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American, however, isn't taking any chances. The airline is in the process of training management as backup flight crew in the event of a walkout.

But if it sounds like a strike is imminent, think again. First off, the NMB has yet to declare the next step. It could release both sides from negotiations and declare the thirty-day cooling-off period, as the union has requested. Or the NMB could decide more negotiations are in order. Or both sides could miraculously find a common ground. Point is, most analysts think a strike likely is months off, if one happens at all. So, keep an eye on the situation, but don't hit the panic button just yet.

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