New York Times
September 20, 2004
Workers Face Difficult Choices as Airlines Seek Concessions
By MICHELINE MAYNARD
Leonard Robinson, who put in 30 years as a mechanic at Pan American World Airways, has a message for his counterparts at US Airways, Delta, United and other struggling airlines pressing their workers for concessions: do not wait until it is too late.
"Negotiate. Just negotiate," Mr. Robinson said. Pan Am had more than 26,000 workers in its last full year of operation in 1990. All those jobs were lost when the carrier shut down on Dec. 1, 1991. "They should give up something" if it will save their jobs, Mr. Robinson, 74, from Brooklyn, said.
But David Garriga, who was laid off in 2001, after Trans World Airlines went bankrupt and was absorbed by American, said he did not regret fighting the constant rounds of concessions that T.W.A. management sought. Even though he has not worked since, he said the unions had no other choice. "It got to the point where we said, 'We're not going to give back and take away any more,' " said Mr. Garriga, 53, of Valley Stream, N.Y.
Therein lies the conundrum that union workers at the major airlines face, none more so than those at US Airways, which filed for bankruptcy protection for a second time on Sept. 12, after its employees refused to grant $800 million in wage and benefit cuts, the third round of cuts sought by the company. Including US Airways, along with United Airlines, which has been in bankruptcy since December 2002, and Delta Air Lines, which is threatening to seek court protection, more than 100,000 airline workers face uncertainty about their futures. If all three companies fail, which analysts say is unlikely, that would wipe out more jobs than the 110,000 lost after the Sept. 11, 2001, attacks.
If the employees give in, as Mr. Robinson counseled, they may see their jobs vanish anyway. But once those jobs went, they might never find anything, like Mr. Garriga, and surely never the kinds of jobs they once held, for the industry has fundamentally changed.
The recent bankruptcies at US Airways and United demonstrate that companies can face financial distress even when workers cooperate, strengthening the resolve of today's labor groups to resist further cuts.
Even so, the previous generation's hard-line stance is understandable because airline jobs were once considered tickets to an enviable lifestyle, more flush in some ways than than middle-class families could otherwise enjoy. "People used to say, 'you'll never be a millionaire, but you'll live like one,' " said Peter Cappelli, a management professor at the Wharton School of the University of Pennsylvania.
That was true for Mr. Robinson and other members of the Pan Am Retirees Association, who held a quarterly meeting last week at a hotel near Kennedy Airport, where many of them once worked.
Standing near a table with flight bags in Pan Am's distinctive turquoise blue and bumper stickers reading, "Gone But Not Forgotten," Mitchell Jensen, 72, a retired ramp worker from Staten Island, recounted how he saw the world for peanuts as one of the perks of his job.
Years ago, on the way to India, he sat next to a schoolteacher who boasted of paying only $837 to fly from New York, round-trip. "Can you imagine getting such a good deal?" the woman asked him. Mr. Jensen could: his ticket had cost only the $13 service fee.
But those days are gone, as are his health care benefits. So is the company stock he received, in lieu of raises during the airline's final 11 years.
All Mr. Jensen has left is a pension of $832.78 a month, administered by the federal Pension Benefit Guaranty Corporation, which took over the airline's retirement plan when Pan Am went under.
Bobby Hall, who is in his mid-50's and spent 33 years repairing planes for T.W.A., was not as lucky. He lost his job on Oct. 6, 2001, when American, which assumed T.W.A.'s assets in bankruptcy, laid off thousands of workers. He has not found work since. "The airline field is basically dead right now," said Mr. Hall, of Oceanside, N.Y.
If US Airways could not survive, it would throw 28,000 more workers, many of them in New York, Philadelphia and Washington, into markets already crowded with former airline employees. The group includes 5,600 flight attendants, 4,800 maintenance workers and 3,200 pilots.
Some of the earlier crop of airline refugees have joined other companies, including JetBlue, which has hired about 7,000 people since it began flying four years ago. Only about half the JetBlue work force has previous airline experience, however, and most of them are pilots and mechanics with specific job skills.
That is usually the way airline employees end up, said Professor Cappelli, who has been following the industry since it was deregulated in 1978. "If you're a pilot, you end up as a pilot, although you might bump around a little" from corporate jobs to flying charters or working for delivery companies like FedEx and United Parcel Service, he said.
Likewise, mechanics young enough to be retrained can sometimes find work in other businesses. But gate agents, flight attendants and baggage workers, whose skills are unique to the airline industry, often are forced to take a step down.
For some former employees, joining JetBlue, which does not have unions, means losing years of seniority at their old companies, said Vincent Stabile, JetBlue's vice president for human resources.
"Seniority is so important to them, because it gives you quality of life control," Mr. Stabile said. "It is a tough, emotional thing for them to do without."
David G. Neeleman, JetBlue's chief executive, said he preferred to have a mix of longtime airline employees and people who were fresh to the industry. "We never have had any problem hiring them from any other airline," Mr. Neeleman said on Friday, including Pan Am, T.W.A., as well as American, United and Delta.
"What's important to us," Mr. Neeleman said, "is whether they have a good attitude."
Some employees are grateful for the jobs. Though he works the night shift at J.F.K., Anthony Alexander, 30, showed up at La Guardia Airport on Friday morning for a balloon-strewn ceremony for the start of JetBlue service there.
Laid off by Midway when it halted service last year, Mr. Alexander earns $12.20 an hour as a lead ramp worker at JetBlue. That is $2.20 an hour more than he made at Midway. Despite the lack of union protection or a traditional pension - JetBlue workers have 401(k) plans - "I'll be there unless they kick me out," he said.
Former Pan Am workers know that feeling. News that the airline was ceasing operations "was like a shock to my body," said Hope Laredo of Queens, who declined to give her age. Ms. Laredo spent 36 years in the accounts department before she lost her job in 1991. She wound up at the company that made Pan Am's uniforms before retiring a year later.
Tony Miranda, 36, saw two airlines disappear - T.W.A., where he spent 13 years as a mechanic, and Eastern, where he spent three years as an aircraft painter. He now overhauls planes at Mid-Coast Aviation, a company that services business jets. There, he said, he earns 45 percent less than at T.W.A., with lesser benefits.
Luckily, he said, his wife has a good job with health care coverage, but there is no chance of expensive colleges for his 16-year-old son. "I told him straight up, unless he gets a scholarship, don't even think about a private college," Mr. Miranda said. Before, "I said the sky was the limit."
But with more than 110,000 workers laid off by the major airlines after the September 2001 terrorist attacks, on top of the thousands who lost their jobs at the vanished airlines, Mr. Miranda, who lives in St. Louis, said he is lucky to still be in the business.
"I know pilots making change at the casino, mechanics making pizza and flight attendants who are now waitresses. I know a lot of guys who have just given up," Mr. Miranda said. "They don't event want to touch an airline now."
Mike Carr, 41, of Hanover Park, Ill., is still at United, where he has spent 18 years as a mechanic. But in the last year, he had to take the overnight shift. He pays $180 a month for medical benefits, which used to be fully paid, and his unit has shrunk to about 650 mechanics from 1,200 before 9/11.
United, the unit of UAL that has been operating under bankruptcy protection since December 2002, is warning workers that more jobs will be cut, and it is expected to seek more concessions on top of the $2.5 billion a year in cuts won last year.
Mr. Carr, however, is skeptical about giving more. "Nobody minds making the changes if you think it is going to be worth it," he said.
But United does not seem to have a strategy "except cutting workers," Mr. Carr said. "Morale is very low."
Such experiences not only scare away workers on the front line, but deter managers from considering the industry, Professor Cappelli said. "It's not clear any more if this industry is going to get the best and brightest. I don't hear any of my M.B.A.'s saying, 'I want to go to work at an airline,' " he said.
Still, the former airline workers have sympathy for their counterparts at US Airways, whose chairman, David G. Bronner, warned in August that the airline would probably liquidate if it sought bankruptcy protection, because it was unlikely new investors could be found.
"I would imagine they are scared and are in the dark, just as the Pan Am employees were," said Nick Lacetera, 53, the former president of the Pan Am credit union who is now in charge of the financial institution that acquired its assets.
Hearing that US Airways' pilots rejected an effort to vote on concessions "brought back a whole bunch of memories," added Mr. Garriga, the former T.W.A. mechanic. Constantly under threat from management for more givebacks, he said, workers felt, "regardless of whether we close the company, this has got to stop." But such a stance would not serve workers at US Airways, Delta and other airlines well, Mr. Lacetera said. "The reality is that they are going to have to bite the bullet and do what is necessary to survive," he said. "A half of a loaf is better than none."
Eric L. Dash contributed reporting for this article.
September 20, 2004
Workers Face Difficult Choices as Airlines Seek Concessions
By MICHELINE MAYNARD
Leonard Robinson, who put in 30 years as a mechanic at Pan American World Airways, has a message for his counterparts at US Airways, Delta, United and other struggling airlines pressing their workers for concessions: do not wait until it is too late.
"Negotiate. Just negotiate," Mr. Robinson said. Pan Am had more than 26,000 workers in its last full year of operation in 1990. All those jobs were lost when the carrier shut down on Dec. 1, 1991. "They should give up something" if it will save their jobs, Mr. Robinson, 74, from Brooklyn, said.
But David Garriga, who was laid off in 2001, after Trans World Airlines went bankrupt and was absorbed by American, said he did not regret fighting the constant rounds of concessions that T.W.A. management sought. Even though he has not worked since, he said the unions had no other choice. "It got to the point where we said, 'We're not going to give back and take away any more,' " said Mr. Garriga, 53, of Valley Stream, N.Y.
Therein lies the conundrum that union workers at the major airlines face, none more so than those at US Airways, which filed for bankruptcy protection for a second time on Sept. 12, after its employees refused to grant $800 million in wage and benefit cuts, the third round of cuts sought by the company. Including US Airways, along with United Airlines, which has been in bankruptcy since December 2002, and Delta Air Lines, which is threatening to seek court protection, more than 100,000 airline workers face uncertainty about their futures. If all three companies fail, which analysts say is unlikely, that would wipe out more jobs than the 110,000 lost after the Sept. 11, 2001, attacks.
If the employees give in, as Mr. Robinson counseled, they may see their jobs vanish anyway. But once those jobs went, they might never find anything, like Mr. Garriga, and surely never the kinds of jobs they once held, for the industry has fundamentally changed.
The recent bankruptcies at US Airways and United demonstrate that companies can face financial distress even when workers cooperate, strengthening the resolve of today's labor groups to resist further cuts.
Even so, the previous generation's hard-line stance is understandable because airline jobs were once considered tickets to an enviable lifestyle, more flush in some ways than than middle-class families could otherwise enjoy. "People used to say, 'you'll never be a millionaire, but you'll live like one,' " said Peter Cappelli, a management professor at the Wharton School of the University of Pennsylvania.
That was true for Mr. Robinson and other members of the Pan Am Retirees Association, who held a quarterly meeting last week at a hotel near Kennedy Airport, where many of them once worked.
Standing near a table with flight bags in Pan Am's distinctive turquoise blue and bumper stickers reading, "Gone But Not Forgotten," Mitchell Jensen, 72, a retired ramp worker from Staten Island, recounted how he saw the world for peanuts as one of the perks of his job.
Years ago, on the way to India, he sat next to a schoolteacher who boasted of paying only $837 to fly from New York, round-trip. "Can you imagine getting such a good deal?" the woman asked him. Mr. Jensen could: his ticket had cost only the $13 service fee.
But those days are gone, as are his health care benefits. So is the company stock he received, in lieu of raises during the airline's final 11 years.
All Mr. Jensen has left is a pension of $832.78 a month, administered by the federal Pension Benefit Guaranty Corporation, which took over the airline's retirement plan when Pan Am went under.
Bobby Hall, who is in his mid-50's and spent 33 years repairing planes for T.W.A., was not as lucky. He lost his job on Oct. 6, 2001, when American, which assumed T.W.A.'s assets in bankruptcy, laid off thousands of workers. He has not found work since. "The airline field is basically dead right now," said Mr. Hall, of Oceanside, N.Y.
If US Airways could not survive, it would throw 28,000 more workers, many of them in New York, Philadelphia and Washington, into markets already crowded with former airline employees. The group includes 5,600 flight attendants, 4,800 maintenance workers and 3,200 pilots.
Some of the earlier crop of airline refugees have joined other companies, including JetBlue, which has hired about 7,000 people since it began flying four years ago. Only about half the JetBlue work force has previous airline experience, however, and most of them are pilots and mechanics with specific job skills.
That is usually the way airline employees end up, said Professor Cappelli, who has been following the industry since it was deregulated in 1978. "If you're a pilot, you end up as a pilot, although you might bump around a little" from corporate jobs to flying charters or working for delivery companies like FedEx and United Parcel Service, he said.
Likewise, mechanics young enough to be retrained can sometimes find work in other businesses. But gate agents, flight attendants and baggage workers, whose skills are unique to the airline industry, often are forced to take a step down.
For some former employees, joining JetBlue, which does not have unions, means losing years of seniority at their old companies, said Vincent Stabile, JetBlue's vice president for human resources.
"Seniority is so important to them, because it gives you quality of life control," Mr. Stabile said. "It is a tough, emotional thing for them to do without."
David G. Neeleman, JetBlue's chief executive, said he preferred to have a mix of longtime airline employees and people who were fresh to the industry. "We never have had any problem hiring them from any other airline," Mr. Neeleman said on Friday, including Pan Am, T.W.A., as well as American, United and Delta.
"What's important to us," Mr. Neeleman said, "is whether they have a good attitude."
Some employees are grateful for the jobs. Though he works the night shift at J.F.K., Anthony Alexander, 30, showed up at La Guardia Airport on Friday morning for a balloon-strewn ceremony for the start of JetBlue service there.
Laid off by Midway when it halted service last year, Mr. Alexander earns $12.20 an hour as a lead ramp worker at JetBlue. That is $2.20 an hour more than he made at Midway. Despite the lack of union protection or a traditional pension - JetBlue workers have 401(k) plans - "I'll be there unless they kick me out," he said.
Former Pan Am workers know that feeling. News that the airline was ceasing operations "was like a shock to my body," said Hope Laredo of Queens, who declined to give her age. Ms. Laredo spent 36 years in the accounts department before she lost her job in 1991. She wound up at the company that made Pan Am's uniforms before retiring a year later.
Tony Miranda, 36, saw two airlines disappear - T.W.A., where he spent 13 years as a mechanic, and Eastern, where he spent three years as an aircraft painter. He now overhauls planes at Mid-Coast Aviation, a company that services business jets. There, he said, he earns 45 percent less than at T.W.A., with lesser benefits.
Luckily, he said, his wife has a good job with health care coverage, but there is no chance of expensive colleges for his 16-year-old son. "I told him straight up, unless he gets a scholarship, don't even think about a private college," Mr. Miranda said. Before, "I said the sky was the limit."
But with more than 110,000 workers laid off by the major airlines after the September 2001 terrorist attacks, on top of the thousands who lost their jobs at the vanished airlines, Mr. Miranda, who lives in St. Louis, said he is lucky to still be in the business.
"I know pilots making change at the casino, mechanics making pizza and flight attendants who are now waitresses. I know a lot of guys who have just given up," Mr. Miranda said. "They don't event want to touch an airline now."
Mike Carr, 41, of Hanover Park, Ill., is still at United, where he has spent 18 years as a mechanic. But in the last year, he had to take the overnight shift. He pays $180 a month for medical benefits, which used to be fully paid, and his unit has shrunk to about 650 mechanics from 1,200 before 9/11.
United, the unit of UAL that has been operating under bankruptcy protection since December 2002, is warning workers that more jobs will be cut, and it is expected to seek more concessions on top of the $2.5 billion a year in cuts won last year.
Mr. Carr, however, is skeptical about giving more. "Nobody minds making the changes if you think it is going to be worth it," he said.
But United does not seem to have a strategy "except cutting workers," Mr. Carr said. "Morale is very low."
Such experiences not only scare away workers on the front line, but deter managers from considering the industry, Professor Cappelli said. "It's not clear any more if this industry is going to get the best and brightest. I don't hear any of my M.B.A.'s saying, 'I want to go to work at an airline,' " he said.
Still, the former airline workers have sympathy for their counterparts at US Airways, whose chairman, David G. Bronner, warned in August that the airline would probably liquidate if it sought bankruptcy protection, because it was unlikely new investors could be found.
"I would imagine they are scared and are in the dark, just as the Pan Am employees were," said Nick Lacetera, 53, the former president of the Pan Am credit union who is now in charge of the financial institution that acquired its assets.
Hearing that US Airways' pilots rejected an effort to vote on concessions "brought back a whole bunch of memories," added Mr. Garriga, the former T.W.A. mechanic. Constantly under threat from management for more givebacks, he said, workers felt, "regardless of whether we close the company, this has got to stop." But such a stance would not serve workers at US Airways, Delta and other airlines well, Mr. Lacetera said. "The reality is that they are going to have to bite the bullet and do what is necessary to survive," he said. "A half of a loaf is better than none."
Eric L. Dash contributed reporting for this article.
