Wednesday, September 26, 2001

American Airlines to set up pay-cut program
By John-Mark Day
Staff Reporter

American Airlines is expected to lay off more than 20,000 employees this week as a result of the Sept. 11 terrorist attacks, American spokesman Mark Slitt said Tuesday.

“At this point there’s so much uncertainty,” Slitt said. “People don’t know if they’re going to have a job at the end of the week.”

In a move to restore American’s weakened finances, American CEO Don Carty said Monday he will give up his salary for the rest of the year.

“In light of our calamitous financial condition ... I will forego any personal compensation, including my salary, from now until the end of the year,” Carty told American workers.

Carty’s annual salary is $772, 500, Slitt said. In 2000, Carty earned $772,500 and received a bonus of $1.375 million.

“Better days are coming,” Carty said. “I strongly believe in the future of American, so much so that late last week I bought 40,000 shares of AMR stock on the open market.”

At the closing of the stock market Friday, Carty would have spent $716,000 to buy the stock in AMR, American’s parent company, The Associated Press reported.

American Airlines is also creating a voluntary program for other workers who wish to take a pay cut, Carty said.

“I don’t want to suggest for a minute that anyone else give up their paycheck,” he said. “The truth is, in this environment, anything that reduces expenses of any kind would help quite a bit.”

“All of us, to one degree or another, are paying the price for what’s happened,” Carty said.

Slitt said many employees have not volunteered to take pay cuts yet because they did not know if they would have a job at the end of the week. When employees find out, Slitt said he expects many to participate.

Carty said he hopes his actions will help stimulate the company enough to eventually hire back the 20,000 employees whose jobs will be cut.

“As a company, we need to maintain contact with our displaced colleagues, so we know where they are, what they’re up to, and how to contact them when it’s time for them to return,” Carty said.

Twenty percent of the money raised by the pay cuts will be put in a fund to benefit the families of American employees who were killed in the attacks.

Economics professor Stephen Quinn said the job cuts will have a serious effect on the Metroplex, including higher unemployment and less expenditures.

John-Mark Day
j.m.day2@student.tcu.edu