US Airways' offer cuts 2,000 machinists' jobs
Date: Thursday, January 13, 2005 @ 20:37:32 EST
Topic: Airline News


By Dan Fitzpatrick, Pittsburgh Post-Gazette

In a final cost-cutting proposal to its machinists union, US Airways wants to eliminate the jobs of as many as 2,000 mechanics, airplane cleaners, stock clerks and other technical workers.

The cuts, detailed in a document obtained by the Pittsburgh Post-Gazette, are part of a final push for $1 billion in annual savings from all unions that the airline says it must have to exit bankruptcy.

The International Association of Machinists, the only union not to approve a new round of concessions with the troubled airline, agreed last week to send the offer to its 8,800 members for a vote. The votes will be tallied Jan. 21.



A federal bankruptcy judge voided the IAM's contracts last week, but the airline agreed not to impose new terms until the rank and file votes on the new offer. The union, in turn, will not strike while the votes are being tabulated.

US Airways, undergoing its second bout with bankruptcy this decade, is seeking a total of $268 million in annual savings from the IAM, not counting the termination of the union's pension plan and cuts in retiree health care. The airline claims that "anything less than the necessary savings may result in the failure of the company."

The company maintains that "a majority" of IAM jobs would be preserved, and spokesman David Castelveter yesterday said that the total number of jobs cut could decline in the coming days, depending on the outcome of talks with the IAM.

The question, of course, is whether workers will be willing to approve an agreement that eliminates some jobs for the sake of perhaps preserving even more.

"I wish I could vote 'no,' said Frank Schifano, president of the IAM Lodge 1976 in Pittsburgh and a member of the union's negotiating group. "But the alternatives are so grave. Every member is going to have to evaluate his own position."

The airline is offering a severance package and retiree medical coverage for people who retire before March 1. If members vote down the agreement, those incentives will be gone, Schifano said.

"Vote 'yes,' lose your job and get severance," he said. "Vote 'no,' lose your job and get nothing."

Under the proposal about 2,600 of the company's 4,600 mechanics, stock clerks, cleaners, inspectors and other technical workers would remain, or 56 percent.

Hardest hit in that group, however, are the 848 airplane cleaners -- 798 would lose their positions to outsourcing. The remaining 50 cleaners would see their base pay drop by 15 percent.

The proposal also cuts the number of stock clerks from 400 to 268, and reduces their pay 15 percent. The number of mechanics would drop from about 3,000 to 1,800, with the remaining mechanics losing 8 percent of their base pay.

The airline also reserves the right to outsource the work of some baggage handlers in certain cities, although Pittsburgh is not among them.

The good news, Schifano said, is that the union was able to save lots of jobs during negotiations and keep some maintenance work in Charlotte, N.C., and Pittsburgh.

Everyday maintenance checks will continue to be performed in both cities, along with Philadelphia, New York, Washington, D.C. and Boston.

Ground service equipment work will continue to be done in Charlotte, Pittsburgh and Philadelphia, and heavy maintenance work for some new Airbus planes that had been done by outside vendors will be brought in-house.

Maintenance on Boeing 737s that is done every three days also will be kept in house, along with one-half of the maintenance done on Boeing 737s every 25 days or so.

But the company reserves the right to outsource maintenance on other Boeing 737s, plus all Boeing 757s, Boeing 767s and Airbus A330s, along with so-called "shop work."

The fact that some work will be kept in Charlotte and Pittsburgh under the company's last proposal is a victory for the IAM. At one time, the company wanted to shut down one of its maintenance facilities, a move that would have saved US Airways $40 million a year.

Allegheny County Chief Executive Dan Onorato said he spoke again with US Airways officials by phone yesterday as part of his efforts to keep maintenance and reservation facilities in the Pittsburgh area. He said the carrier has yet to finalize its plans, but confirmed that one option is to retain maintenance facilities in Pittsburgh and Charlotte.

Airline officials gave Onorato "no indication at all" when a decision would be made on that work or where it might consolidate its two reservation centers, currently in Green Tree and Winston-Salem, N.C.

US Airways faces several other hurdles this week to keep its survival plan on track, including finding an additional $100 million to keep a financing agreement intact with aircraft lender General Electric.

It also must negotiate the continued use of more than $700 million in bankruptcy financing backed by the federal Air Transportation Stabilization Board. Its use of that money expires Thursday, and the company is talking to the ATSB about an extension. An expiration of the agreement could force US Airways to ground its planes.







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