American Went Bankrupt to Undercut Union

(AP) - United Auto Workers members have ratified a package of concessions designed to reduce General Motors' labor costs. Union president Ron Gettelfinger said today 74% of GM's production and skilled-trade workers voted in favor. The vote comes before the company's expected Chapter 11 bankruptcy protection filing Monday. Bankruptcy experts say having an agreement in place before the filing will help move the process through court more quickly. More»

(NEWSER) - Chrysler is preparing to file for bankruptcy as early as next week, the New York Times reports. The best-case scenario for survival: Chrysler will strike a deal with its lenders, file for bankruptcy protection to shed liabilities, then merge its strongest assets with Fiat. If those deals fall through, the company is looking at liquidation, the Wall Street Journal notes. The UAW has agreed in principle to the move and would emerge with a large stake in the company. More»

Airline will emerge from bankruptcy with fewer workers

(AP) - The parent of American Airlines wants to eliminate about 13,000 jobs—15% of its workforce—as the third-biggest US airline remakes itself under bankruptcy protection. The company aims to cut labor costs by 20%, and will soon begin negotiations with its three major unions. AMR Corp. CEO Thomas W. Horton said today that the company hopes to return to profitability by cutting spending by more than $2 billion per year and raising revenue by $1 billion per year. More»

It's a double standard that needs to go

(NEWSER) - When American Airlines declared bankruptcy even though it could afford to pay its debts , pundits largely applauded this smart business move. Many homeowners face the same predicament, observes James Surowiecki in the New Yorker : "They can still pay their debts, but doing so is like setting a pile of money on fire every month," because home values have plummeted. But when they default, they're not praised for their business sense. "There's a real stigma to defaulting," with polls showing 81% consider it immoral. More»

Parent firm says voluntary move best choice for firm

(AP) - American Airlines and American Eagle's parent companies are filing for bankruptcy protection. AMR Corp. and AMR Eagle Holding Corp. said today that they filed voluntary petitions to reorganize, saying it's in the best interest of the companies and its shareholders. American says it sought protection to reduce its costs and debt to remain competitive in the airline industry. American was the only major US airline that didn't file for bankruptcy protection after the 2001 terrorist attacks. American says labor-contract rules force it to spend at least $600 million more than other airlines. Fox News adds that rising jet fuel costs also contributed to the airline's massive debt. More»