Tulsa Area Business Owners Concerned By Ripple Effect Of AA Bankruptcy

Area small business owners are worried about the ripple effect that could be caused by any potential job losses at American Airlines. 

With 14 percent of the Tulsa American Airlines workforce living in the Owasso-Collinsville area, bankruptcy could create a retail ripple effect.

"I think every retailer has that fear. This is a tough economy," said Chuck McCormick, owner of Trails End Knife Company.

McCormick says his first concern is for the well being of friends and neighbors at American. But he also worries if AMR cuts deep into labor, it could also impact small businesses.

"You cut back on some of the things you can cut back on, and my business is one that you can cut back on. Not everybody needs a new knife. Unfortunately," McCormick said. 

At Thompson's General Store, they share the same concerns.

"I would hope that American would evaluate the value of the people that work here," said Stevie Thompson, owner of Thompsons' General Store.

AMR's new CEO says there likely will be job cuts and that labor costs forced them to spend at least $600 million more per year than other airlines which shed costly labor contracts through bankruptcy.

"If they're going to cut back I think executive pay is a place where they could cut back and maintain the labor force," Thompson said.

Thompson says the poor economy has already forced many small businesses to operate more efficiently, which could better prepare them if there are losses at American.

"Hopefully, they're going to do what they can to maintain their labor force, as a small business owner we do have the advantage of being able to react fairly quickly when things happen in our economy," Thompson said.

Back at the knife shop, Chuck McCormick is pondering the what ifs, and hoping American doesn't slash salaries or cut jobs.

"I hope and pray that we have no loss of our American employees because they leave Tulsa alone. Because Tulsa has been very good for American Airlines and American Airlines has been very good for Tulsa," McCormick said.

Any job losses or pay cuts wouldn't just hurt employees and their families, and small businesses that feel the ripple effect. It could also impact sales tax revenues collected by Tulsa and other communities.

11/29/2011 Related Story: American Airlines Files For Chapter 11 Bankruptcy Protection

How about the many companies that provide services to American Airlines? Despite the bankruptcy, those supplier companies expect little change.

Local companies who do work for American Airlines aren't sure yet how the bankruptcy will impact them, but because American traditionally pays their accounts quickly - most aren't worried they'll be stuck with unpaid bills.

Tulsa based NORDAM is the largest local vendor for American Airlines. They build, repair and upgrade parts for American's fleet - and believe that's not going to change anytime soon.

"We expect no change in the relationship at all," said Meredith R. Siegfried, NORDAM chief executive officer.

Siegfried said American Airline's business accounts for less than 1 percent of NORDAM sales, so the impact would be small even if American stopped paying the bills.

Tulsa Mayor Dewey Bartlett says he spoke with American's Tulsa Vice President Bill Collins, who reinforced American's commitment to Tulsa.

"They have such a huge investment here already," Bartlett said. "To replace this facility -- with 7,000 people somewhere else -- would be a huge undertaking, and I just don't see that happening.

American is by far the largest employer in Tulsa, and according to the Chamber of Commerce, the influence of that workforce makes American even more important.

"And the impact, the ripple effect that it has on small to midsize businesses that feed it and support it, is hard to estimate, but it's huge," said Mike Neal of the Tulsa Chamber of Commerce.

Most of the local companies who service American do machine work, or repairs on small components. Over the last few years, American has pulled more of that work back internally, so even though it's huge impact, their influence is not what it once was on those outside companies.