General Lee
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USAir unions object to cuts.....
Reuters
US Air Unions Object to Plan for Cuts
Tuesday October 5, 8:12 pm ET
By John Crawley
WASHINGTON (Reuters) - Big labor unions at bankrupt US Airways Group Inc. (OTC BB:UAIRQ.OB - News) claimed on Tuesday the carrier has fallen far short of proving that it must have immediate court-imposed wage and other cuts to survive.
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With US Airways ready to formally press its case for temporary relief from contract terms at a bankruptcy court hearing on Thursday, the airline's flight attendants, pilots and mechanics raised sharp late-day objections to the proposal.
The responses were expected by unions trying to protect their interests. But the tone in two cases was bitter and projected poorly on the company's chances for quickly negotiating voluntary concessions to meet its cost-cutting targets and avoid court intervention.
The Association of Flight Attendants said US Airways has "neglected to meaningfully pursue negotiations" on voluntary contract modifications, and instead "seeks to use the hammer" of the bankruptcy court to force a solution.
Mechanics represented by the International Association of Machinists, which has so far refused to reopen its contract for new concessions, blasted the company's reorganization plan.
US Airways wants to cut nearly $2 billion in annual costs, conserve cash and emerge from its second foray into Chapter 11 as a low-cost carrier. It plans to fly more point-to-point routes, turn planes around faster and simplify fares.
But the IAM says the restructuring is "anything but realistic" and depends mostly on "slashing labor costs to the core" while "hoarding unrealistically high levels of cash."
US Airways spokesman David Castelveter reaffirmed the company's immediate need for cost cuts and defended the reorganization's course.
"We believe that we have a strong plan, one that with the right cost structure will not only make the company prosper but will enable it to become more competitive," Castelveter said.
However, he would not comment on specific negotiations but said the company was engaged with its unions.
Leaders of the pilots group, represented by the Air Line Pilots Association (News - Websites) , continued to review a tentative agreement on $300 million in givebacks on Tuesday night.
The union's Master Executive Council must decide whether to forward the plan to the airline's 3,200 pilots for ratification. The leadership has been sharply divided on the need for voluntary concessions, and has debated the latest plan calling for 18 percent wage cuts for several days.
All three unions filing objections on Tuesday said US Airways has not come close to meeting the legal test for getting court-imposed labor cuts.
US Airways said last month it must save at least $38 million per month from its union contracts over the next few months to survive past January.
The No. 7 domestic airline wants the court to impose wage cuts totaling 23 percent as well as approve reductions in pension contributions. It also wants flexibility to outsource maintenance and boost the number of hours that employees work.
The company announced management cuts on Monday exceeding $45 million annually, including hundreds of job cuts and wage and benefit reductions of more than 20 percent.
Bye Bye--General Lee
Reuters
US Air Unions Object to Plan for Cuts
Tuesday October 5, 8:12 pm ET
By John Crawley
WASHINGTON (Reuters) - Big labor unions at bankrupt US Airways Group Inc. (OTC BB:UAIRQ.OB - News) claimed on Tuesday the carrier has fallen far short of proving that it must have immediate court-imposed wage and other cuts to survive.
[size=-2]ADVERTISEMENT[/size]
With US Airways ready to formally press its case for temporary relief from contract terms at a bankruptcy court hearing on Thursday, the airline's flight attendants, pilots and mechanics raised sharp late-day objections to the proposal.
The responses were expected by unions trying to protect their interests. But the tone in two cases was bitter and projected poorly on the company's chances for quickly negotiating voluntary concessions to meet its cost-cutting targets and avoid court intervention.
The Association of Flight Attendants said US Airways has "neglected to meaningfully pursue negotiations" on voluntary contract modifications, and instead "seeks to use the hammer" of the bankruptcy court to force a solution.
Mechanics represented by the International Association of Machinists, which has so far refused to reopen its contract for new concessions, blasted the company's reorganization plan.
US Airways wants to cut nearly $2 billion in annual costs, conserve cash and emerge from its second foray into Chapter 11 as a low-cost carrier. It plans to fly more point-to-point routes, turn planes around faster and simplify fares.
But the IAM says the restructuring is "anything but realistic" and depends mostly on "slashing labor costs to the core" while "hoarding unrealistically high levels of cash."
US Airways spokesman David Castelveter reaffirmed the company's immediate need for cost cuts and defended the reorganization's course.
"We believe that we have a strong plan, one that with the right cost structure will not only make the company prosper but will enable it to become more competitive," Castelveter said.
However, he would not comment on specific negotiations but said the company was engaged with its unions.
Leaders of the pilots group, represented by the Air Line Pilots Association (News - Websites) , continued to review a tentative agreement on $300 million in givebacks on Tuesday night.
The union's Master Executive Council must decide whether to forward the plan to the airline's 3,200 pilots for ratification. The leadership has been sharply divided on the need for voluntary concessions, and has debated the latest plan calling for 18 percent wage cuts for several days.
All three unions filing objections on Tuesday said US Airways has not come close to meeting the legal test for getting court-imposed labor cuts.
US Airways said last month it must save at least $38 million per month from its union contracts over the next few months to survive past January.
The No. 7 domestic airline wants the court to impose wage cuts totaling 23 percent as well as approve reductions in pension contributions. It also wants flexibility to outsource maintenance and boost the number of hours that employees work.
The company announced management cuts on Monday exceeding $45 million annually, including hundreds of job cuts and wage and benefit reductions of more than 20 percent.
Bye Bye--General Lee
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