American Airline Crisis- Case Study

Summary of the case In year 2003, American Airlines was facing a major problem in their financial situation. As an drift to avoid bankruptcy, American Airlines has negotiated a deal with the labour federation for their employees regards the compensation which involved a voting by employees to support $1.6b annual concession. One day after voting, it emerged that D.J Carty the CEO and as a chairman of American Airlines has neglected to tell the confederation that bonuses & pension plans for top mgmt allow be RETAIN if the co. filed for bankruptcy. fortress for regular employees & member of pension plan would not be received which is approximately $3.4b It is a normal action if the co. will retain qualified managers in , BUT DJ Carty was the low paid among the largest airlines industries, that can prove his uncapability among the others. ~Business Week publicise What was Don Carty Thinking 24/4/03 DJ Carty resigned as CEO & Chairman ~ Bonuses for top mgmt- cancelled ~ Pension for 45 exec. $41 factory remain ~ DJ Carty would not receive severance package from airlines Q1: Do you agree with the action taken Not agree. As the mgmt should be more than responsible and honest in giving info that the bonuses & pension plan for top mgmt will be retain.

Don Carty overly has resigned fro the job as a result of his action towards the employees is a bad eefect Q2: With the benefit of hindsight, what would you have done differently ~ the action taken has shown adhesive that the co. has their own agenda and not trying to nurture the employees welfare . ~ Mgmt also should put the main priority to the employees in term of benefit and not to themselves. 1. Inform to the union attraction the real situation and explain what is the reason of retaining the bonuses to the top mgmt. The employees should be given overflowing information regards the matter. 2. Apportionate the amount of bonuses for top mgmt to be shared 50% with the employees... If you want to get a full essay, order it on our website: Ordercustompaper.com

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