Home >  Business

Tuesday, August 13, 2002

By Jim McKay, Post-Gazette Staff Writer

US Airways' bankruptcy filing is lending new urgency to talks with labor unions that have not yet agreed to concessions the airline insists it needs to restructure.

For pilots, flight attendants and flight crew instructors who have agreed to cost-cutting contracts, the airline is promising a "labor friendly" Chapter 11 reorganization, in which management would honor newly ratified agreements and give unions a voice in corporate governance through seats on the board of directors.

For unions that fail to settle soon, the airline intends to ask the bankruptcy court to invalidate their labor agreements. To do that, the airline must prove to the court that it has bargained in good faith and that the concessions are necessary to reorganize.

The airline has asked the court for an Aug. 30 deadline to achieve wage and benefit cuts from its two biggest holdouts, the International Association of Machinists and the Communications Workers of America.

Yesterday, the IAM prepared to put up for ratification proposals for two separate groups of workers that it represents, 6,800 mechanics and related workers and 5,450 baggage handlers and other fleet-service workers.

Details of the proposal for mechanics and related workers will be presented to local committee chairs tomorrow in Pittsburgh, with explanation meetings to begin next week and a vote to take place Aug. 28. Details of the fleet-service proposal will be presented to local committee chairs Thursday and to union members after that, with voting to be completed by Aug. 30.

Frank Schifano, president of Pittsburgh-based Potomac Air Lodge 1976, said the proposal to mechanics would be explained in a common-sense manner. "I don't want to say we're recommending it," he said. "We're just going to make people aware of the consequences."

The company initially sought $950 million in contract savings from employees, including an estimated $261 million in annual concessions from the two IAM units. Although the union would not comment on details, US Airways said its proposals were comparable to targets set for all other groups, which so far have accepted roughly 85 percent of what the company initially sought.

The Air Line Pilots Association agreed to $465 million in annual givebacks over 6 1/2 years, while the Association of Flight Attendants agreed to annual concessions totaling $76 million over the same period. Both groups also won assurances that US Airways would not seek deeper cuts if it entered Chapter 11 and would consider profit sharing in the future.

"Management has a one-shot chance to turn this company around. They'll never again be able to get labor to take these kinds of concessions," said Teddy Xidas, president of AFA Local 40 in Pittsburgh. "There's no excuses."

The CWA, which has so far resisted management's cost-cutting proposals as unfair and too drastic, did not immediately respond to the company's request that it put management's proposal to a vote.

Instead, the union committee representing customer service and reservations agents met to examine what is on the table and look for areas where further bargaining could be fruitful, said spokesman Jeff Miller.

"We are interested in continuing bargaining with the company," Miller said. "They've indicated that they want to continue to talk and we presume that means further give and take."

The company intends to meet with the CWA in the next couple of days, said airline spokesman David Castelveter. CWA President Morton Bahr, when informed of the bankruptcy filing Sunday by US Airways Chief Executive Officer David Siegel, agreed talks would continue.

Jim McKay can be reached at jmckay@post-gazette.com or 412-263-1322.