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Reuters
US Air to Cut Some Management Jobs
Monday October 4, 9:38 pm ET
By John Crawley
WASHINGTON (Reuters) - Bankrupt US Airways Group. Inc. (OTC BB:UAIRQ.OB - News) said on Monday it would eliminate hundreds of management and nonunion jobs and impose wage and other cuts to save more than $45 million annually as it tries to overhaul its business and survive.
Chief executive Bruce Lakefield said in a special bulletin to employees that cuts in pay and other compensation would average more than 20 percent. The austerity measures would affect all 3,700 management and nonunion workers.
Job cuts will total more than 10 percent, or roughly 370, from the number of management and nonunion employees that were in place at the start of the year. The reductions will include positions already vacant as well as openings created by employees who leave voluntarily.
A senior airline official could not pinpoint how many employees currently on the payroll would lose their jobs, but said the company wanted to have its management and nonunion workforce reorganized by the end of the month.
US Airways said a large portion of the projected savings from the management and nonunion group has been realized, partly through attrition and pay cuts already in effect. A hiring freeze is in place.
Lakefield's pay will not go down since the salary he accepted when he took the job this spring was reduced substantially from the amount earned by his predecessor, David Siegel. Lakefield makes about $425,000, in line with that of his peers at low-cost carriers.
Paycuts, including canceled raises, would total more than 20 percent for senior officers. Lower level managers and nonunion employees would take a 5 percent cut in wages.
US Airways will also reduce pension contributions and eliminate the company match to 401(k) plans.
It will also make changes to retiree medical, dental and life insurance benefits.
The nation's seventh-largest airline is still trying to obtain more than $800 million in annual concessions from its unionized labor groups, who have refused after months of talks to agree to more givebacks.
Unions agreed to billions in concessions during the company's first bankruptcy, which ended in March 2003. The airline sought Chapter 11 for a second time on Sept. 12.
US Airways hopes to eliminate more than $1.5 billion in costs across its balance sheet this time and emerge as a low-cost carrier.
Leaders of the US Airways pilots union, the Air Line Pilots Association (News - Websites) , are scheduled to resume consideration of a $300 million giveback plan on Tuesday. The union's negotiating committee struck a tentative agreement with the company last week on the package that includes an 18 percent pay cut.
The airline is also talking to other key union groups, including flight attendants, reservation workers and mechanics.
Pressure is mounting on organized labor to reach agreements with the company, which is set to go to bankruptcy court on Thursday to seek forced pay reductions of 23 percent as well as other wholesale changes in union contracts to achieve cost-cutting targets.
Without voluntary or forced concessions totaling at least $38 million a month, US Airways has said it would probably have to liquidate by mid-February.
US Air to Cut Some Management Jobs
Monday October 4, 9:38 pm ET
By John Crawley
WASHINGTON (Reuters) - Bankrupt US Airways Group. Inc. (OTC BB:UAIRQ.OB - News) said on Monday it would eliminate hundreds of management and nonunion jobs and impose wage and other cuts to save more than $45 million annually as it tries to overhaul its business and survive.
Job cuts will total more than 10 percent, or roughly 370, from the number of management and nonunion employees that were in place at the start of the year. The reductions will include positions already vacant as well as openings created by employees who leave voluntarily.
A senior airline official could not pinpoint how many employees currently on the payroll would lose their jobs, but said the company wanted to have its management and nonunion workforce reorganized by the end of the month.
US Airways said a large portion of the projected savings from the management and nonunion group has been realized, partly through attrition and pay cuts already in effect. A hiring freeze is in place.
Lakefield's pay will not go down since the salary he accepted when he took the job this spring was reduced substantially from the amount earned by his predecessor, David Siegel. Lakefield makes about $425,000, in line with that of his peers at low-cost carriers.
Paycuts, including canceled raises, would total more than 20 percent for senior officers. Lower level managers and nonunion employees would take a 5 percent cut in wages.
US Airways will also reduce pension contributions and eliminate the company match to 401(k) plans.
It will also make changes to retiree medical, dental and life insurance benefits.
The nation's seventh-largest airline is still trying to obtain more than $800 million in annual concessions from its unionized labor groups, who have refused after months of talks to agree to more givebacks.
Unions agreed to billions in concessions during the company's first bankruptcy, which ended in March 2003. The airline sought Chapter 11 for a second time on Sept. 12.
US Airways hopes to eliminate more than $1.5 billion in costs across its balance sheet this time and emerge as a low-cost carrier.
Leaders of the US Airways pilots union, the Air Line Pilots Association (News - Websites) , are scheduled to resume consideration of a $300 million giveback plan on Tuesday. The union's negotiating committee struck a tentative agreement with the company last week on the package that includes an 18 percent pay cut.
The airline is also talking to other key union groups, including flight attendants, reservation workers and mechanics.
Pressure is mounting on organized labor to reach agreements with the company, which is set to go to bankruptcy court on Thursday to seek forced pay reductions of 23 percent as well as other wholesale changes in union contracts to achieve cost-cutting targets.
Without voluntary or forced concessions totaling at least $38 million a month, US Airways has said it would probably have to liquidate by mid-February.
