Here's an interesting read. . .
(You can read the full article here on usaviation.)
At 2 Airlines, Management and Unions Focus on Cuts
By MICHELINE MAYNARD
Published: February 17, 2004
Unions and management at two troubled airlines are facing off over cuts that executives say are critical to their companies' survival.
At United Airlines, the battle is over reductions in health care benefits for 35,000 retired workers. Executives say the savings are necessary for the airline, the nation's second largest behind American Airlines, to secure federal loan guarantees and emerge from bankruptcy protection as planned later this year.
Meanwhile, US Airways, the country's seventh-largest carrier, wants a third round of concessions from its unions, on top of two granted while it was in bankruptcy. It sees the wage and benefit cuts as a major component in its drive to reduce its costs to the level of low-fare carriers.
The airlines are not being specific about how much they want from the unions, but both have drawn the ire of labor groups.
The anger is hottest at United, where flight attendants are leading a charge to stop the airline from carrying out its plans, laid out in a bankruptcy court motion last month, to have retirees pay more for medical coverage.
The Association of Flight Attendants contends that it cut a deal with United to protect the benefits of flight attendants who chose to take early retirement by July 1. About 2,500 left the airline last summer, presuming that their benefits were protected, the union said.
United, a unit of the UAL Corporation, maintains that there was no such contractual agreement, only a promise by its chief executive, Glenn F. Tilton, to avoid health care cuts unless "absolutely necessary."
In a court filing last week in Chicago, where United is based, the airline said it had always retained the option of asking the court to reduce retiree benefits, an action allowed under the federal bankruptcy code.
. . .
Despite the outcry, employees do not have much hope of stopping United, said Gary L. Chaison, professor at Clark University in Worcester, Mass. "Bankruptcy makes everything 'absolutely necessary,' " Professor Chaison said yesterday, referring to Mr. Tilton's comments.
He added that there was still plenty of room for bargaining but that he did not think the union could realistically keep the company from cutting retirees' benefits. Bankrupt companies, from steel makers to retailers, have frequently succeeded over the years to cut retirees' health care benefits, he said.
. . .
Union leaders initially resisted the airline's bid for a third round of cuts, declaring that "the concessions stand is closed." In response, the airline hired Morgan Stanley to find bidders for a series of major assets, including US Airways' East Coast shuttle and one of its three hubs, which include Pittsburgh and Charlotte, N.C., in addition to Philadelphia.
. . .
As at United, US Airways' unions may not have much chance of fighting off more concessions, if they hope to see their airline remain in operation. Said Professor Chaison: "I'd hate to be a union officer now, having said 'never' so many times."
So, looks like Delle is a day late and a dollar short. He might actually be the first man to bring down an "empire". Way to go Delle. Good job at protecting the profession!!!
Bring on the conspiracy theories boys. . .
(You can read the full article here on usaviation.)
At 2 Airlines, Management and Unions Focus on Cuts
By MICHELINE MAYNARD
Published: February 17, 2004
Unions and management at two troubled airlines are facing off over cuts that executives say are critical to their companies' survival.
At United Airlines, the battle is over reductions in health care benefits for 35,000 retired workers. Executives say the savings are necessary for the airline, the nation's second largest behind American Airlines, to secure federal loan guarantees and emerge from bankruptcy protection as planned later this year.
Meanwhile, US Airways, the country's seventh-largest carrier, wants a third round of concessions from its unions, on top of two granted while it was in bankruptcy. It sees the wage and benefit cuts as a major component in its drive to reduce its costs to the level of low-fare carriers.
The airlines are not being specific about how much they want from the unions, but both have drawn the ire of labor groups.
The anger is hottest at United, where flight attendants are leading a charge to stop the airline from carrying out its plans, laid out in a bankruptcy court motion last month, to have retirees pay more for medical coverage.
The Association of Flight Attendants contends that it cut a deal with United to protect the benefits of flight attendants who chose to take early retirement by July 1. About 2,500 left the airline last summer, presuming that their benefits were protected, the union said.
United, a unit of the UAL Corporation, maintains that there was no such contractual agreement, only a promise by its chief executive, Glenn F. Tilton, to avoid health care cuts unless "absolutely necessary."
In a court filing last week in Chicago, where United is based, the airline said it had always retained the option of asking the court to reduce retiree benefits, an action allowed under the federal bankruptcy code.
. . .
Despite the outcry, employees do not have much hope of stopping United, said Gary L. Chaison, professor at Clark University in Worcester, Mass. "Bankruptcy makes everything 'absolutely necessary,' " Professor Chaison said yesterday, referring to Mr. Tilton's comments.
He added that there was still plenty of room for bargaining but that he did not think the union could realistically keep the company from cutting retirees' benefits. Bankrupt companies, from steel makers to retailers, have frequently succeeded over the years to cut retirees' health care benefits, he said.
. . .
Union leaders initially resisted the airline's bid for a third round of cuts, declaring that "the concessions stand is closed." In response, the airline hired Morgan Stanley to find bidders for a series of major assets, including US Airways' East Coast shuttle and one of its three hubs, which include Pittsburgh and Charlotte, N.C., in addition to Philadelphia.
. . .
As at United, US Airways' unions may not have much chance of fighting off more concessions, if they hope to see their airline remain in operation. Said Professor Chaison: "I'd hate to be a union officer now, having said 'never' so many times."
So, looks like Delle is a day late and a dollar short. He might actually be the first man to bring down an "empire". Way to go Delle. Good job at protecting the profession!!!
Bring on the conspiracy theories boys. . .
