HPTunco
Oct 26, 04, 7:57 am
There is that word again, DRACONIAN. Last used by the pilots and again here. Unfortunately it probably is used in proper context. How else would you describe what US Airways is doing to these good people?
For once, US Airways is breaking new ground in the airline industry. Should these tactics pass by the BK judge, be assured that UA and DL (and whoever else files BK) will follow the same path.
TRIBUNE-REVIEW
Tuesday, October 26, 2004
US Airways is demanding that 6,000 gate and reservations agents take permanent pay cuts of up to 35 percent.
The airline, which filed for bankruptcy protection Sept. 12, says the new cost-saving proposals it has given the unions will help produce the $950 million a year in labor savings it needs to become a profitable low-cost carrier.
Top salaries for those agents would drop from $43,600 to about $28,000 a year, according to union estimates.
In addition, US Airways wants to:
# Save more than $69 million next year by reducing or eliminating medical coverage to almost 11,000 retirees, according to court documents.
# Freeze or terminate the defined-benefits pension plans for flight attendants and mechanics, according to bankruptcy court testimony. The company missed a $110 million payment to the two pension plans in September.
# Slash flight attendants' salaries by 15 percent and reduce paid vacation days by up to 50 percent.
The company's demands come less than two weeks after a federal bankruptcy judge imposed 21 percent wage cuts on workers until mid-February. Two unions representing the flight attendants, mechanics and fleet-service workers asked the judge to reconsider his decision and reduce the wage cuts.
"These draconian cuts are excessive, even measured by the company's original request for relief,'' said attorney David Borer, who represents the Association of Flight Attendants.
The two unions said the wage cuts should be reduced because millions of dollars the company will save by forgoing contributions to pension plans has not been considered.
The union representing about 5,500 flight attendants said the company's pension savings of nearly $4 million should reduce its wage cut to less than 5 percent.
The International Association of Machinists and Aerospace Workers, which represents about 9,100 mechanics and fleet-service workers, did not request a specific wage-cut rollback, a union spokesman said.
US Airways had asked U.S. Bankruptcy Judge Stephen S. Mitchell to impose 23 percent wage cuts on workers until April, saying it needed $38 million in monthly labor savings to survive through the winter. Mitchell imposed 21 percent cuts until mid-February.
In the wake of its court victory, US Airways has told union leaders they will have only until mid-November to negotiate permanent cost-savings agreements. If they fail to do so, the company said, it would return to court and begin the process of voiding existing labor contracts. That would clear the path for court-imposed permanent labor relief.
"It's outrageous,'' said Chris Fox, president of Communications Workers of America Local 13302 in Green Tree. "There's just no good-faith bargaining with those people.''
Her local represents about a number of ticket and gate agents at Pittsburgh International Airport and reservations agents in Green Tree.
"It's all psychological warfare,'' said Teddy Xidas, president of Association of Flight Attendants Local 40 in Pittsburgh. "How much worse can it get?''
IAM spokesman Joseph Tiberi said his union expected to receive a new company proposal tomorrow.
"While we recognize the hardships that all employees are facing as a result of the cuts, we are doing what is needed to be done in order to keep this company alive and people employed,'' said US Airways spokesman David Castelveter.
The airline also said yesterday that David M. Davis had resigned as chief financial officer after six months on the job to accept a position with Kraton Polymers in Houston. He will remain with US Airways through November.
Davis will be replaced by Ronald E. Stanley, who joined US Airways' board of directors in May and has served as chairman of the board's audit committee. Stanley has held several financial positions with other companies.
Ray Neidl, an aviation analyst with Caylon Securities in New York, said he didn't believe Davis' departure would hinder US Airways' attempt to transform itself into a profitable low-cost carrier.
US Airways, the nation's seventh-largest airline, filed for bankruptcy protection for the second time in two years after failing to win labor cooperation for a $1.5 billion cost restructuring. Unions were reluctant to grant more concessions after having accepted $1.2 billion in wage and benefit cuts in 2003.
The court-imposed wage cuts affect ever major labor group except pilots, who have ratified a new five-year, $1.8 billion concession agreement that cuts wages by 18 percent.
At the time, the company said it was seeking annual labor savings of about $122 million from gate and reservations agents; $116 million from flight attendants; $263 million from mechanics and fleet-service workers; and $295 million from pilots.
The pilots' new contract will produce estimated savings of at least $300 million a year, according to the company.
CWA representatives are scheduled to resume talks with the company today.
"We're going to see what they have to say,'' Fox said.
Steve Halvonik can be reached at shalvonik@tribweb.com or (412) 320-7993.
For once, US Airways is breaking new ground in the airline industry. Should these tactics pass by the BK judge, be assured that UA and DL (and whoever else files BK) will follow the same path.
TRIBUNE-REVIEW
Tuesday, October 26, 2004
US Airways is demanding that 6,000 gate and reservations agents take permanent pay cuts of up to 35 percent.
The airline, which filed for bankruptcy protection Sept. 12, says the new cost-saving proposals it has given the unions will help produce the $950 million a year in labor savings it needs to become a profitable low-cost carrier.
Top salaries for those agents would drop from $43,600 to about $28,000 a year, according to union estimates.
In addition, US Airways wants to:
# Save more than $69 million next year by reducing or eliminating medical coverage to almost 11,000 retirees, according to court documents.
# Freeze or terminate the defined-benefits pension plans for flight attendants and mechanics, according to bankruptcy court testimony. The company missed a $110 million payment to the two pension plans in September.
# Slash flight attendants' salaries by 15 percent and reduce paid vacation days by up to 50 percent.
The company's demands come less than two weeks after a federal bankruptcy judge imposed 21 percent wage cuts on workers until mid-February. Two unions representing the flight attendants, mechanics and fleet-service workers asked the judge to reconsider his decision and reduce the wage cuts.
"These draconian cuts are excessive, even measured by the company's original request for relief,'' said attorney David Borer, who represents the Association of Flight Attendants.
The two unions said the wage cuts should be reduced because millions of dollars the company will save by forgoing contributions to pension plans has not been considered.
The union representing about 5,500 flight attendants said the company's pension savings of nearly $4 million should reduce its wage cut to less than 5 percent.
The International Association of Machinists and Aerospace Workers, which represents about 9,100 mechanics and fleet-service workers, did not request a specific wage-cut rollback, a union spokesman said.
US Airways had asked U.S. Bankruptcy Judge Stephen S. Mitchell to impose 23 percent wage cuts on workers until April, saying it needed $38 million in monthly labor savings to survive through the winter. Mitchell imposed 21 percent cuts until mid-February.
In the wake of its court victory, US Airways has told union leaders they will have only until mid-November to negotiate permanent cost-savings agreements. If they fail to do so, the company said, it would return to court and begin the process of voiding existing labor contracts. That would clear the path for court-imposed permanent labor relief.
"It's outrageous,'' said Chris Fox, president of Communications Workers of America Local 13302 in Green Tree. "There's just no good-faith bargaining with those people.''
Her local represents about a number of ticket and gate agents at Pittsburgh International Airport and reservations agents in Green Tree.
"It's all psychological warfare,'' said Teddy Xidas, president of Association of Flight Attendants Local 40 in Pittsburgh. "How much worse can it get?''
IAM spokesman Joseph Tiberi said his union expected to receive a new company proposal tomorrow.
"While we recognize the hardships that all employees are facing as a result of the cuts, we are doing what is needed to be done in order to keep this company alive and people employed,'' said US Airways spokesman David Castelveter.
The airline also said yesterday that David M. Davis had resigned as chief financial officer after six months on the job to accept a position with Kraton Polymers in Houston. He will remain with US Airways through November.
Davis will be replaced by Ronald E. Stanley, who joined US Airways' board of directors in May and has served as chairman of the board's audit committee. Stanley has held several financial positions with other companies.
Ray Neidl, an aviation analyst with Caylon Securities in New York, said he didn't believe Davis' departure would hinder US Airways' attempt to transform itself into a profitable low-cost carrier.
US Airways, the nation's seventh-largest airline, filed for bankruptcy protection for the second time in two years after failing to win labor cooperation for a $1.5 billion cost restructuring. Unions were reluctant to grant more concessions after having accepted $1.2 billion in wage and benefit cuts in 2003.
The court-imposed wage cuts affect ever major labor group except pilots, who have ratified a new five-year, $1.8 billion concession agreement that cuts wages by 18 percent.
At the time, the company said it was seeking annual labor savings of about $122 million from gate and reservations agents; $116 million from flight attendants; $263 million from mechanics and fleet-service workers; and $295 million from pilots.
The pilots' new contract will produce estimated savings of at least $300 million a year, according to the company.
CWA representatives are scheduled to resume talks with the company today.
"We're going to see what they have to say,'' Fox said.
Steve Halvonik can be reached at shalvonik@tribweb.com or (412) 320-7993.