Clinton, Obama Split Up Airline Union Causes
Democrats traditionally have organized labor's support, a pattern that continues this year with presidential candidates Hillary Clinton and Barack Obama both winning major endorsements as they reach out to airline workers.
But labor politics can be tricky, as the case of the Teamsters drive to organize the 9,300 mechanics at UAL (UAUA) indicates. A representation election began Feb. 26 and ends March 31.
Obama, the senator from Illinois, has the backing of the Teamsters, the country's second-largest union with about 1.4 million members, including 43,000 in the airline industry, and he is getting behind the organizing effort at Chicago-based United.
Clinton, a senator of New York, has the support of the International Association of Machinists, which has about 110,000 of its 700,000 members in the airline industry, where it is the largest union.Just as the two candidates don't much like each other these days, the two unions aren't exactly the best of friends either. United mechanics were IAM members until 2003, when they left in the midst of a round of industry cost reductions to join another union, the Aircraft Mechanics Fraternal Association. Subsequently, AMFA suffered a severe blow to its image after staging a disastrous 2005 strike against Northwest (NWA). Most of its Northwest members lost their jobs as a result. Even though it previously represented United mechanics, the IAM has not attempted a new organizing drive at the carrier. Union spokesman Joe Tiberi said that because several thousand United workers are on furlough and could fail to vote, the Teamsters run the risk that fewer than 50% of the bargaining unit would participate, which would result in a union decertification. "We didn't want to put the workers at risk of having no union," Tiberi said. But Teamsters spokesman Galen Munroe said: "We are confident in the Teamsters Union's ability to unionize the workers at United." As part of the organizing effort, Teamsters question United's rapid move to outsource maintenance since 2000, a result of rising cost pressures on the airline industry and of an AMFA contract with fewer restrictions on outsourcing than the predecessor IAM contract had. United outsourced about 45% of its maintenance in 2007, up from 16% in 2000, according to the Bureau of Transportation Statistics. An undisclosed share of the work, including heavy maintenance of widebody aircraft, is sent overseas. However, AMFA points out that at Continental (CAL), where Teamsters represent mechanics, about 48% of maintenance work is outsourced, roughly the same percentage as in 2000. At US Airways (LCC), where the IAM represents mechanics, around 43% of maintenance is outsourced. In a letter to the Teamsters this month, Obama wrote: "The practice of outsourcing aircraft maintenance overseas raises security concerns and pits our skilled mechanics making a middle class living against less skilled, less well protected workers abroad. I strongly support moving to reform and establish guidelines related to any foreign outsourcing of aviation mechanic work overseas." Meanwhile, Clinton has voiced support for the IAM's strong stand against industry consolidation, particularly the possibility of a merger effort by Delta (DAL) and Northwest.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
24/7 market commentary from Jim Cramer and 20+ veteran Wall Street gurus. Get access to the latest trading ideas on stocks, options, and ETFs as well as a real-time forum to see the pros exchanging their investment ideas.
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV