Labor concessions critical to AMR Corp.'s (CCC/Watch Dev/--) and subsidiary American Airlines Inc.'s (CCC/Watch Dev/--) financial turnaround plan are in danger due to a controversy over executive compensation. Ratings on both entities remain on CreditWatch with developing implications, where they were placed on March 28, 2003. Disclosure of retention bonuses and the creation and funding of a bankruptcy-remote supplemental pension plan trust for AMR and American executives continues to anger employees, who in mid-April 2003 narrowly approved deep cuts in their compensation. Despite management's cancellation of the retention bonuses and a promise not to further fund the supplemental pension plans, several unions have threatened to hold another vote on the concessionary contracts, which would almost certainly reverse the previous narrow
