Tom Horton, the new American Airlines (AA) chairman and CEO, announced yesterday (November 29, 2011) that AMR Corporation, the parent company of AA, was bankrupt. He succeeds Gerard Arpey, former chairman and chief executive, who opposed bankruptcy and retired Monday when the members of the board unanimously voted to file for bankruptcy with intent to restructure. Chapter 11 of the federal bankruptcy code allows a business to reorganize to try to become profitable again. Typically, management is allowed to keep running the day-to-day operations, but a bankruptcy judge must approve major business decisions. American Airlines was once the world's largest airlines. Now, AA has significant debt, which includes labor and fuel costs. Other airlines transformed themselves into profitable companies after declaring bankruptcy and cutting costs. AA tried to control labor costs, but labor talks stalled. It failed to negotiate a new contract with the pilots' union (Allied Pilots Association). Other unions at AA are the Association of Professional Flight Attendants and the Transport Workers Union. Transport jobs include mechanics, dispatchers, baggage handlers, and airplane cleaners. Employees unionize in order to gain an opportunity to exercise some degree of control over employer decisions affecting their employment conditions and general welfare. When they are unionized, human resources policies can no longer be determined unilaterally by the employer. Instead these policies and practices are subject to the terms of the labor agreement, which has been negotiated by the union. A major responsibility of the local union officers is to insure that these terms are observed and that the rights of members provided by the agreement are protected. In a November 30, 2011 Dallas Morning News story on page 5D, "An Air of Resolve," Terry Maxon reported that American's pre-bankruptcy negotiations to unions included the offers listed below. An end to company-paid retiree medical benefits Revised scheduling to make pilots and flight attendants work more hours each month and, for flight attendants who fly part time, more hours per month to qualify for benefits such as health coverage Outsourcing of jobs, including daytime cabin cleaning, fuelers and driers at a number of stations An end to defined-benefit pensions for new employees at the least Restructuring is frightening for employees. No one knows what will happen. Cutting costs usually means cutting labor costs. The workforce may be reduced. Some jobs may be eliminated, and employees will lose their jobs. Other employee's wages and benefits may be reduced. Employees may lose their retirement benefits. Pensions may be in jeopardy. Why do you think negotiations between American Airlines' management and the unions broke down?