This is mostly true:

Put a union label on the new American Airlines because it never would have happened without labor.

The airline’s own employees pushed the company into bankruptcy, drove out the hated leaders and escorted their own white knight onto the property. On Thursday, as US Airways announced its merger with American at a crowded media event at Dallas/Fort Worth International Airport, employees were well represented and all smiles.

The part that isn’t true is that the unions pushed the company into bankruptcy. The bankruptcy proceedings started in an all too common way: management took a company into bankruptcy proceedings for their own reasons.

Having $4 billion in the bank is not your typical definition of broke. That’s why American Airlines’ parent company AMR surprised a bunch of people —  particularly, one presumes, the five Wall Street analysts who still rated the company’s shares a “buy” — when it filed for bankruptcy on Tuesday. Its comfy nest egg aside, American isn’t facing any looming debt payments. The company said it didn’t need emergency financing, like most bankrupt firms do.
Read more: http://business.time.com/2011/11/30/american-airlines-bankrupt-companies-are-healthier-than-they-used-to-be/#ixzz2Q8KIFPwb

What did management want to do?

• Have the bankruptcy judge invalidate union contracts so management could slash pay and benefits and lay off 14,000 employees
• Take funds from  the pension plans and dump remaining obligations on the government.
• Stiff vendors who were owed money
• Pay management huge bonuses for their great work
• Generate enormous fees for banks and consultants

Things started off as planned, and one of the beneficiaries was Bain, the old Romney company, that got a fat contract to figure out how to eliminate jobs.  Sadly for management, there were three problems: the unions were smart and mobilized, US Airways wanted to merge with American, and Barack Obama was elected President in 2008 and re-elected in 2012.Which is why Business Press featured headlines like this one:

American Airlines’ Bankruptcy Plan Will Set Off A War With The Union AND The Government

The government’s Pension Benefit Guaranty Board, which was supposed to follow the script and take over the debts from the destroyed pension started filing liens on AMR’s assets and announced it would fight AMR in bankruptcy court. The head of the PBGB is a guy named Joshua Gotbaum: recess appointed over Republican filibuster in 2010. The Republicans are not in favor of any limits to welfare payments to management of big companies. Then the US Bankruptcy Trustee, appointed 2010 by Eric Holder intervened:

In objections filed Tuesday, U.S. trustee Tracy Hope Davis asked U.S. Bankruptcy Judge Sean Lane not to approve the application of AMR, American Airlines and subsidiaries to hire a variety of consultants in their bankruptcy cases.

In the first filing, Davis asked the judge not to approve the hiring of five law firms that AMR and American Airlines want to use in their Chapter 11 case, including the lead attorneys in the case unless some conditions are met

In a separate filing, the trustee also objected to American Eagle’s hiring of Bain & Co. to advise on labor issues, and the requests of AMR and/or American to hire a variety of other consultants.

Why does Wall Street love corporate bankruptcy? Well, take look at the law firms and Consultants that the government objected to:

• Weil, Gotshal & Manges LLP, which is leading the AMR and American case.
• Groom Law Group, to advise on “employee benefit matters.”
• Paul Hastings LLP, to act as “special labor counsel,” including the filing of any Section 1113 proposals to modify collective bargaining agreements.
• Morgan Lewis & Bockius LLP, to assist in collective bargaining and other labor-related negotiations.
• Debevoise & Plimpton LLP to act as “special aircraft counsel” and to advise on employee benefit matters
• Deloitte Financial Advisory Services LLP
• Ernst & Young LLP as auditorKPMG LLP, as tax compliance and tax consultants
• McKinsey Recovery & Transformation Services U.S. LLC,
• McKinsey & Company Inc., United States, and McKinsey & Company, Inc. Japan as management consultants
• Perella Weinberg Partners LP as financial advisor
• Rothschild Inc. as financial advisor and investment banker
• Skyworks Capital LLC as aircraft consultant

YUM! Amazing how many fees can be generated from laying off thousands of workers and scooping up any money owed to them under their contracts.

And then, the airlines unions didn’t act like deer in the headlights, they acted like organizations that knew how to play finance hardball. The unions went to US Air, negotiated new contracts, and went back with other creditors to the bankruptcy judge with an alternative plan that would pay more back to creditors than AMR management offered

Labor played a key role in enabling the historic merger between US Airways and American, which will create the largest airline in the world.

And now, the US Trustee has succeeded even in putting the golden parachute for the ex-CEO of American  into doubt.

This is, of course, not a complete win, but it is a huge win for labor unions, for good well paying jobs, and for the public.It’s a big loss for American’s old management, for the horde of consultants and advisers, and for the banks which would have undoubtedly profited from issuing more debt for the restructured corporation. And it’s a lesson for the managemnt at other companies who are tempted to try the same trick.