By Steve Halvonik
TRIBUNE-REVIEW
Saturday, July 31, 2004
US Airways wants to wipe out all medical and prescription drug coverage for ramp, gate and reservations agents, according a proposal the company gave to the Communications Workers of America at a negotiation session this week.
It also wants to slash pension contributions by up to 70 percent and impose a wage scale identical to that of low-cost airline America West, which would slash the top pay rate by 30 percent, from $20.05 to $13.10 an hour.
The nine-page proposal, reviewed by the Pittsburgh Tribune-Review, represents US Airways' suggestions on how the union can reach the company's savings goal of $295 million a year.
The company is seeking $800 million in wage and fringe benefits cuts from its unionized workers as part of a $1.5 billion restructuring to restore profitability. Company executives have said that unions must ratify new contracts by September to avoid Chapter 11 bankruptcy reorganization -- a step that could lead to the nullification of all labor contracts.
CWA negotiators were "insulted" by the company's proposal, said Chris Fox, president of CWA Local 13302 in Pittsburgh and a member of the union's bargaining team.
"We didn't feel this was negotiating in good faith," she said.
Nevertheless, the CWA's negotiating team will meet Tuesday at union headquarters in Washington, D.C., to discuss a response to US Airways' proposal. Fox said she believed it was in the union's best interest to continue engaging the company in discussions -- "but they have to be more reasonable."
A company spokesman declined to comment yesterday.
US Airways' proposal called for phasing out medical and dental coverage for all present and future CWA employees over three years, ending in 2007. It also proposed terminating all medical and dental coverage for present retirees, effective Jan. 1. Retirees' prescription coverage would end Jan. 1, 2006.
The company also demanded major cuts in contributions to the CWA's defined contribution retirement plan. The company wants to reduce its 401(k) contribution to a flat 3 percent for all employees, effective Jan. 1.
Under the present contract, the company makes escalating payments based on an employee's age: 4 percent for those 18 to 34 years old; 6 percent for 35-44; 8 percent for 45-54; and 10 percent for those 55 and older.
The company also offered a watered-down version of an employee-buyout plan that the union had requested.
Those accepting the buyout would receive $5,000 cash for five to nine years' service; $10,000 for 10-14 years' service; and $15,000 for 15 or more years of service. They also would receive medical coverage for up to one year after leaving the company.
Fox said the company would like up to 25 percent of its 6,000 CWA members to volunteer for the buyout. Those who decline would keep their jobs but have their salaries reduced to the America West pay scale.
The buyout will have limited appeal to workers between ages 55 and 63 because of the limited medical coverage, Fox said.
She claimed the company's proposal would reduce CWA employees to working poor, and added, "We're not going where they want to go."
Also yesterday, US Airways Chief Executive Officer Bruce Lakefield thanked employees for helping the company post a $34 million net profit in the second quarter. Lakefield had angered some union officials earlier in the week when he failed to publicly acknowledge employees' contributions to the company's $34 million net profit for the second quarter.
US Airways stock closed yesterday at $2.90, up 21 percent for the week.
Steve Halvonik can be reached at [email protected] or (412) 320-7993.
TRIBUNE-REVIEW
Saturday, July 31, 2004
US Airways wants to wipe out all medical and prescription drug coverage for ramp, gate and reservations agents, according a proposal the company gave to the Communications Workers of America at a negotiation session this week.
It also wants to slash pension contributions by up to 70 percent and impose a wage scale identical to that of low-cost airline America West, which would slash the top pay rate by 30 percent, from $20.05 to $13.10 an hour.
The nine-page proposal, reviewed by the Pittsburgh Tribune-Review, represents US Airways' suggestions on how the union can reach the company's savings goal of $295 million a year.
The company is seeking $800 million in wage and fringe benefits cuts from its unionized workers as part of a $1.5 billion restructuring to restore profitability. Company executives have said that unions must ratify new contracts by September to avoid Chapter 11 bankruptcy reorganization -- a step that could lead to the nullification of all labor contracts.
CWA negotiators were "insulted" by the company's proposal, said Chris Fox, president of CWA Local 13302 in Pittsburgh and a member of the union's bargaining team.
"We didn't feel this was negotiating in good faith," she said.
Nevertheless, the CWA's negotiating team will meet Tuesday at union headquarters in Washington, D.C., to discuss a response to US Airways' proposal. Fox said she believed it was in the union's best interest to continue engaging the company in discussions -- "but they have to be more reasonable."
A company spokesman declined to comment yesterday.
US Airways' proposal called for phasing out medical and dental coverage for all present and future CWA employees over three years, ending in 2007. It also proposed terminating all medical and dental coverage for present retirees, effective Jan. 1. Retirees' prescription coverage would end Jan. 1, 2006.
The company also demanded major cuts in contributions to the CWA's defined contribution retirement plan. The company wants to reduce its 401(k) contribution to a flat 3 percent for all employees, effective Jan. 1.
Under the present contract, the company makes escalating payments based on an employee's age: 4 percent for those 18 to 34 years old; 6 percent for 35-44; 8 percent for 45-54; and 10 percent for those 55 and older.
The company also offered a watered-down version of an employee-buyout plan that the union had requested.
Those accepting the buyout would receive $5,000 cash for five to nine years' service; $10,000 for 10-14 years' service; and $15,000 for 15 or more years of service. They also would receive medical coverage for up to one year after leaving the company.
Fox said the company would like up to 25 percent of its 6,000 CWA members to volunteer for the buyout. Those who decline would keep their jobs but have their salaries reduced to the America West pay scale.
The buyout will have limited appeal to workers between ages 55 and 63 because of the limited medical coverage, Fox said.
She claimed the company's proposal would reduce CWA employees to working poor, and added, "We're not going where they want to go."
Also yesterday, US Airways Chief Executive Officer Bruce Lakefield thanked employees for helping the company post a $34 million net profit in the second quarter. Lakefield had angered some union officials earlier in the week when he failed to publicly acknowledge employees' contributions to the company's $34 million net profit for the second quarter.
US Airways stock closed yesterday at $2.90, up 21 percent for the week.
Steve Halvonik can be reached at [email protected] or (412) 320-7993.
