afl-cio IAM consession stand.
US Airways wants more concessions from unions
Beleaguered airline identifies another $800 million in cuts
Thursday, May 13, 2004
By Dan Fitzpatrick, Pittsburgh Post-Gazette
US Airways, after extracting $1 billion from unions during bankruptcy, has identified another $800 million in additional cuts it would like to get from labor.
The total, released last week to union leaders in Washington, D.C., should not come as a surprise to US Airways' 28,000 workers, who twice in the last two years have given back sizable concessions to the Arlington, Va.-based company.
The money-losing airline, which is still struggling to compete with low-cost rivals such as Southwest Airlines, has made it clear that bankruptcy did not fix its problems and that to survive, its industry-high costs need to come down another $1.5 billion. About half of that amount, the company has said, must come from unions.
During a meeting last Wednesday, the company asked the labor leaders to keep the $800 million suggestion -- and specific figures for each labor group -- a secret. Several hundred million dollars, perhaps as much as $400 million, is expected to be identified as potential cuts for the pilots union, the airline's highest-paid union group.
Another $120 million in cuts have been identified for the machinists, according to Bill Freiberger, assistant general chairman for the International Association of Machinists District 141-M, who was at the meeting. He said he did not remember the amounts proposed for the flight attendants, fleet service workers, reservationists or gate workers, all of whom expect to receive proposals in the coming weeks and months.
As part of the $800 million, US Airways has targeted $50 million in annual savings from medical benefits provided to retired workers, said Freiberger, who noted that similar packages are not provided at America West and JetBlue Airways, two low-cost airlines that US Airways is using as models.
While the pilots have agreed to contract talks, the machinists union has refused to reopen its contract a third time. When asked yesterday how he and his colleagues reacted to the $120 million suggestion, Freiberger said, "not extremely well."
Generally, he said, the airline is seeking more work rule changes that could make the company more efficient and more productive. He also said layoffs were a part of the plan. He called the retiree cuts "cruel."
US Airways spokesman David Castelveter declined yesterday to talk about the specific amounts discussed at last week's meeting, calling them "cost targets" as opposed to specific requests. "Although some specific areas where there could be cost cuts were identified, nothing was asked at that meeting," he said.
But Castelveter said it was made clear that "more specific information would follow in individual meetings with the respective labor groups" and that the process is meant to be collaborative, not authoritarian. "We have already met with many of the labor groups and we hope we can get to our cost targets consensually and cooperatively."
At last week's meeting, US Airways Chief Executive Officer Bruce Lakefield emphasized that fairness would be a key part of the upcoming negotiations, saying that "one employee's group cannot subsidize another's uncompetitiveness, nor can employees subsidize waste or mistakes made by management." He also said that employees would receive stock and profit sharing in exchange for their participation.
In a separate but related matter yesterday, the company informed the Communications Workers of America that some of its workers would likely lose their jobs in the fall as the company installs automated gate readers in 22 airports around the country, including Pittsburgh International Airport. The machines will scan tickets as customers board the planes.
Job security also was a popular topic yesterday at a rally in Moon for the IAM, where Allegheny County Executive Dan Onorato urged machinists and mechanics to "keep up the good fight" in their dealings with US Airways.
Onorato criticized former CEO David Siegel and former chief financial officer Neal Cohen for walking away last month with severance packages approaching $7 million at a time when "the company is still bleeding."
Onorato called the moves "morally outrageous. ... It might have been legal but morally it was wrong," he said.
US Airways wants more concessions from unions
Beleaguered airline identifies another $800 million in cuts
Thursday, May 13, 2004
By Dan Fitzpatrick, Pittsburgh Post-Gazette
US Airways, after extracting $1 billion from unions during bankruptcy, has identified another $800 million in additional cuts it would like to get from labor.
The total, released last week to union leaders in Washington, D.C., should not come as a surprise to US Airways' 28,000 workers, who twice in the last two years have given back sizable concessions to the Arlington, Va.-based company.
The money-losing airline, which is still struggling to compete with low-cost rivals such as Southwest Airlines, has made it clear that bankruptcy did not fix its problems and that to survive, its industry-high costs need to come down another $1.5 billion. About half of that amount, the company has said, must come from unions.
During a meeting last Wednesday, the company asked the labor leaders to keep the $800 million suggestion -- and specific figures for each labor group -- a secret. Several hundred million dollars, perhaps as much as $400 million, is expected to be identified as potential cuts for the pilots union, the airline's highest-paid union group.
Another $120 million in cuts have been identified for the machinists, according to Bill Freiberger, assistant general chairman for the International Association of Machinists District 141-M, who was at the meeting. He said he did not remember the amounts proposed for the flight attendants, fleet service workers, reservationists or gate workers, all of whom expect to receive proposals in the coming weeks and months.
As part of the $800 million, US Airways has targeted $50 million in annual savings from medical benefits provided to retired workers, said Freiberger, who noted that similar packages are not provided at America West and JetBlue Airways, two low-cost airlines that US Airways is using as models.
While the pilots have agreed to contract talks, the machinists union has refused to reopen its contract a third time. When asked yesterday how he and his colleagues reacted to the $120 million suggestion, Freiberger said, "not extremely well."
Generally, he said, the airline is seeking more work rule changes that could make the company more efficient and more productive. He also said layoffs were a part of the plan. He called the retiree cuts "cruel."
US Airways spokesman David Castelveter declined yesterday to talk about the specific amounts discussed at last week's meeting, calling them "cost targets" as opposed to specific requests. "Although some specific areas where there could be cost cuts were identified, nothing was asked at that meeting," he said.
But Castelveter said it was made clear that "more specific information would follow in individual meetings with the respective labor groups" and that the process is meant to be collaborative, not authoritarian. "We have already met with many of the labor groups and we hope we can get to our cost targets consensually and cooperatively."
At last week's meeting, US Airways Chief Executive Officer Bruce Lakefield emphasized that fairness would be a key part of the upcoming negotiations, saying that "one employee's group cannot subsidize another's uncompetitiveness, nor can employees subsidize waste or mistakes made by management." He also said that employees would receive stock and profit sharing in exchange for their participation.
In a separate but related matter yesterday, the company informed the Communications Workers of America that some of its workers would likely lose their jobs in the fall as the company installs automated gate readers in 22 airports around the country, including Pittsburgh International Airport. The machines will scan tickets as customers board the planes.
Job security also was a popular topic yesterday at a rally in Moon for the IAM, where Allegheny County Executive Dan Onorato urged machinists and mechanics to "keep up the good fight" in their dealings with US Airways.
Onorato criticized former CEO David Siegel and former chief financial officer Neal Cohen for walking away last month with severance packages approaching $7 million at a time when "the company is still bleeding."
Onorato called the moves "morally outrageous. ... It might have been legal but morally it was wrong," he said.
,even if it meant losing your job? Sometime or somewhere somebody is going to have to take a stand in the airline industry. Will it be the TWU? I don't think so!
