In an unprecedented move signaling the rank-and-file's growing frustration with top management, US Airways' pilots union yesterday called for the ouster Chief Executive Officer David Siegel -- a call quickly rebuffed by the embattled carrier's chairman.
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The Air Line Pilots Association said it has lost faith in management's ability to save the airline and asked that both Siegel and his No. 2 man, Chief Financial Officer Neil Cohen, step down.
"We have seen enough," said Jack Stephan, spokesman for the pilots union. "We have paid dearly and enough is enough. If this company is going to survive, it will not be with those two at the helm. They have had their chances. They have had plenty of opportunities to turn this place around."
ALPA's statement yesterday afternoon came as Siegel was meeting with hundreds of the company's managers in Washington, D.C., where he said that if carriers costs can be brought down, he can increase the size of the fleet by as many as 60 planes.
It is "ironic," said a company executive who did not want to be identified, "that ALPA [called for the CEO's ouster] at the time when Dave Siegel was discussing with employees growing the mainline fleet by up to 60 planes over the next two years."
Siegel, who has suggested the need to cut $200 million to $300 million in costs next year, did not address specific cost reductions for 2004, nor did he tell the managers when those proposed cuts would be announced.
After Siegel's talk, US Airways chairman David Bronner released a statement expressing support for the chief executive and his senior management team and disappointment in the pilots union's actions.
Bronner, whose Alabama pension fund owns the controlling stake in the carrier, said the board has "complete confidence" in Siegel and that it is "regrettable that ALPA would suggest that a change in management is the solution, when this management team has done a remarkable job and earned the confidence of the investment community for their leadership in tackling difficult issues."
US Airways employees remain convinced that Siegel will come back to the unions for more concessions, perhaps in the form of work-rule changes, on top of roughly $1 billion in givebacks already wrested from them in the past 18 months as the carrier entered, then quickly exited, Chapter 11 bankruptcy.
The pilots yesterday said they have given up enough -- they granted the carrier $565 million in annual wage-and-benefit cuts and reluctantly signed off on major pension benefit changes -- and believe that management should do more to reduce other costs and raise additional revenue rather than going back to unions for more cuts.
ALPA spokesman Stephan said the pilots have asked to see the company's plan for further cuts and survival but that Siegel's team has so far refused.
ALPA was not the only union to call for Siegels' ouster yesterday.
"We have said the same thing," said Frank Schifano, president of the International Association of Machinists, Pittsburgh Local Lodge 1976.
If "the current management team can't run [the company] with the concessions employees have given, they need to move on and the board needs to find someone else who can."
Still upset by the airline's attempt to subcontract heavy maintenance work on Airbus narrow-body jets to an Alabama company, Schifano said, "Instead of working with us, they turn around and try to steal from us what they didn't negotiate from us. Enough is enough."
The type of employee turmoil now facing US Airways is roiling throughout the airline industry as workers, fed up with management consistently turning to them for concessions in the face of losses, have publicly displayed frustration and exasperation with their leaders.
AMR's Donald Carty, for example, was forced out at American Airlines in April amid uproar over his pay in the face of demands for more givebacks among the rank-and-file, and former Delta Air Lines CEO Leo Mullin abruptly stepped down last month in the midst of a bitter fight with pilots over demands for wage cuts.
But yesterday's demand for Siegel's resignation was perhaps the first time ALPA has called for the ouster of a an airline head. "We have never risen to this level before," Stephan, the ALPA spokesman, said.
In making the request, the pilots union cited the airline's "disappointing" third-quarter results -- it posted a net loss of $90 million, ending a two-quarter string of government-aided profits -- and the "tired refrain" that US Airways needs to align its costs with Southwest Airlines, a carrier known for its low costs and high productivity.
The pilots claim that a 12-year captain at Southwest earns 8 percent more per hour than a pilot in the same position at US Airways. "The problem is not labor," pilots officer and US Airways board member William Pollock said. "The problems are high operating costs and low revenues resulting from failed business strategies."
But investor William Lauer, a close observer of the airline industry, said such a comparison is misleading because Southwest pilots fly only one type of aircraft, requiring fewer training hours, and fly far more hours per month than the average US Airways pilot, thus making them more efficient.
"This is all about efficiency and manpower utilization," Lauer, of Tarentum-based money manager Allegheny Capital Management, said of US Airways' desire to trim costs more. "It has nothing to do with [wages]."
Lauer said ALPA's move didn't bode well for Siegel and his team.
"If I were sitting in Siegel's chair and I became aware of this kind of position on the part of ALPA, it would underscore the gravity of the situation," Lauer said. "It would be pretty clear I was looking at a relationship with one of my most important groups that was not healthy and rapidly going the wrong way."