Clt Observer Column


May 18, 2003
Judge grants 21% pay cuts -- Most US Airways workers will see their paychecks slashed

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Some key comments from the Charlotte Observer article:

1. During closing arguments, the IAM pleaded for a chance to reach a consensual agreement.

2. "This keeps them in the game," said Philip Baggaley, an airline credit analyst with Standard & Poor's. "But they still have a lot of obstacles to clear."

3. Mitchell said a 21 percent pay cut is better than a 100 percent cut, which would happen if the airline goes under. "Basically what we have here is a ticking fiscal time bomb," Mitchell said.

4. In a recorded message to employees, Lakefield said the company will announce in the coming days precisely how and when the cuts will take effect. "We do not celebrate or take joy in this decision," said Lakefield, a former banker who took over as CEO in April. "I know full well that the pay cuts that result from this measure will hurt, and I sincerely regret that the company had to take this path."

5. Even with the cut, most US Airways workers will be earning more than if they left for new jobs at other airlines, where they would start at the bottom of the seniority ladder.

6. Mitchell said worries that by approving the emergency temporary pay cuts, he could be giving management the upper hand in future permanent negotiations. "Unless something close to the relief the (company) has requested is granted, the cash level of the airline would drop below the point where it could continue in business," he said.

7. Candice Johnson, a spokeswoman for the Communications Workers of America, said the union fears the company will ask for even steeper cuts than 21 percent in its negotiations for permanent pay cuts.

USA320Pilot comments: ALPA's advisors told the MEC that the longer you wait to cut a TA the worse the deal will get. This is exactly what happened to the pilot group who could have had a much better deal in the summer, a worse deal if the company's September 6 proposal had been sent out by the RC4 for vote, and then, the piltos ended up with a TA that was the worst proposal so fair. The same thing could occur here and Candice Johnson has a valid concern. Bruce Lakefield indicated the pay cuts could be less, if there were more balanced long-term agreements reached that cover all aspects of hte contracts.


You are unreal.

It was a closing statement, not a plea for concessionay contracts, more of your hype.

US Airways Update
Judge Imposes Temporary Cost Reductions

Dear Sisters and Brothers,

After four days of hearings, a bankruptcy judge in Alexandria, Virginia today partially approved US Airways’ request for temporary contract modifications for the carrier’s unionized employees. This request was in addition to the $276 million per year in concessions that IAM members are already voluntarily providing the airline as a result of the company’s first bankruptcy.

Judge Mitchell ordered an immediate 21 percent wage reduction. He also limited the term reductions will be in effect to February 15, 2005. US Airways requested that the term extend through March 2005.

Judge Mitchell suspended contract provisions mandating aircraft fleet minimums, and allowed the carrier to temporarily subcontract Airbus heavy maintenance. He refused US Airways the right to subcontract work because of attrition or speculative job actions.

The 401(k) match has been temporarily eliminated, and contributions into the IAM National Pension Plan have been reduced from 5% to 3%.

IAM attorneys argued that US Airways’ requested modifications to the labor agreements were excessive and not essential to the carrier’s survival. US Airways is inappropriately using the 1113(e) process to achieve permanent changes to our collective bargaining agreements.

US Airways plans to file a motion asking the court to reject collective bargaining agreements if consensual agreements for long-term concessions are not achieved. We will respond to such a motion when it is filed.

It is clear that once again US Airways’ strategy is to reorganize on the backs of its employees without any clear plan for success. Unless a viable business plan is in place, no amount of negotiated or imposed concessions will save this carrier.

Today’s ruling will have far-reaching, dramatic consequences on all of US Airways’ unionized employees. The IAM is carefully reviewing the judge’s order to determine its full effect on the membership.

We will keep you updated as the situation develops.

William O'Driscoll
President-Directing General Chairman
IAM District Lodge 142

Randy Canale
President-Directing General Chairman
IAM District Lodge 141
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  • #4

I simply cut and pasted a comment from the Charlotte Observer. Instead of making a comment about me, why don't you contact the author and voice your complaint?


The only one more upset than myself is my Ex...... I have already contacted my attorney to schedule an appointment to make payment adujustments due to my upcoming salary adjustment. Myself I have over a thousand "sick" hours that are at this moment begining to disappear!!!!!!!
AP Tech said:
I have over a thousand "sick" hours that are at this moment begining to disappear!!!!!!!
And you will too and the ex will still get money given the transparency of your actions....face it, you can't win.... :p