CWA Local President tells CLT OBserver deal getting close

C

chipmunn

Guest
US Airways to ask court to order cuts in wages - Machinists union says no to concessions; gate, ticket agents resisting
STAN CHOE AND TED REED, Staff Writers
US Airways is preparing to force wage-and-benefit cuts on two hold-out unions in U.S. Bankruptcy Court in two weeks.
The nation's seventh-largest airline stalled early Thursday in its quest to strip $840 million in annual labor costs, when mechanics in the International Association of Machinists rejected their share of the cuts by a 57 percent margin.
The airline also has yet to persuade gate and reservations agents, members of the Communications Workers of America, to vote on a concessionary deal.
If US Airways doesn't extract savings from the unions, it could lose about $1 billion in financing it needs to restructure.
To force the two unions into agreements, the airline plans to ask a bankruptcy judge on Sept. 10 to dissolve their labor contracts and write new ones for them.
US Airways would ask the judge for even more concessions than the rejected mechanics' contract and the pending CWA contract. But the airline said it still hopes to strike an agreement with both unions outside of court before Sept. 10.
Other companies have also been trying to rework labor contracts as the airline industry flounders. The IAM is locked in negotiations with Boeing and United Airlines, too.
Arlington, Va.-based US Airways, which carries more than 90 percent of Charlotte's passengers, has been bleeding cash for more than a year.
The airline has continued to fly since filing for Chapter 11 bankruptcy protection on Aug. 11, but expects to announce route cuts and layoffs soon. US Airways employs about 7,115 in Charlotte.
The airline is already about three-fourths of the way to its goal of $840 million in total annual savings through 2008, after pilots, flight attendants and IAM fleet service workers agreed to concessionary deals.
Management has also scheduled negotiating meetings with the CWA in the coming days.
But the IAM's mechanics say they likely won't talk to management again until they meet in court on Sept. 10. "No meetings are scheduled," said IAM spokesman Joe Tiberi. "Our members have made their voice known."
The contract the mechanics rejected Thursday would have saved the airline $152 million annually, cutting wages 6.8 percent. "We are extremely disappointed by the vote of our mechanics," airline Chief Executive David Siegel said.
Many machinists felt uneasy about how quickly the negotiating process has been racing, said Bill Wise, president of IAM Local 1725, which represents 1,771 US Airways mechanics in Charlotte.
Such negotiations often take between two and seven years, Wise said, and this one has taken only a few months. "You can't expect membership that's been beaten up for the past 10 years to make a decision in 10 days," he said.
Some machinists felt they could get a better deal from a Bankruptcy Court judge than from US Airways management. "Let the judge figure it out," said a Charlotte-based mechanic who voted against the contract.
The mechanic, who asked not to be named, said he expected to lose his job under the contract, so there was no reason to support it.
Getting labor concessions is crucial to US Airways because they trigger access to $425 million in cash.
When US Airways filed for bankruptcy protection, several lenders, including Charlotte's Bank of America, agreed to lend the airline $500 million in four installments to help it operate. The lenders set milestones to trigger each installment.
The airline received the first installment of $75 million on its first day of court. The second, $175 million, comes with IAM concessions. The third and fourth come after agreements with the CWA and other unions.
Similarly, the airline needs signed labor concessions to help finalize a conditional $900 million loan guarantee from the federal government.
While mechanics rejected their deal, fleet-service workers, also represented by the IAM, approved one early Thursday morning.
Their contract, which cuts wages by 8 percent, will save the airline $66 million annually.
"It was the lesser of two evils," said John Carr, who was on the negotiating team for the fleet-services team, in Charlotte. US Airways employs 991 fleet-service workers in Charlotte.
The fleet-service workers had too little leverage through negotiations, Carr said. The threat of going to court and watching their labor contract be dissolved was too great a threat, he said.
Meanwhile, CWA negotiators expect to remain in Washington through the weekend as they work to have a ratified deal in place by Sept. 10.
The negotiators are trying to meet company demands for $70 million in annual savings, said James Root, president of Charlotte CWA Local 3641, which represents 527 US Airways agents in Charlotte.
"We're looking at different pieces of the puzzle and trying to cut more," Root said. "We're getting very close, but we're not there yet."
The airline is unlikely to back down on the amount it's asking from the remaining labor groups.
So far, it has gotten 85 percent of its initial request from each union that's agreed to concessions -- its pilots, flight attendants and fleet-service workers.
For the CWA or mechanics to receive a better deal than 85 percent would ruin morale among US Airways employees, management said in a filing with the bankruptcy court.
Such a scenario would also send a dangerous message to unions, telling them brinkmanship will better their negotiating positions, management said.
 

N628AU

Veteran
Aug 22, 2002
909
106
www.usaviation.com
But the IAM's mechanics say they likely won't talk to management again until they meet in court on Sept. 10. "No meetings are scheduled," said IAM spokesman Joe Tiberi. "Our members have made their voice known."



----------------


Apparently the IAM still does not get it. The overwhelming majority of us want a deal, just cut the pork the IAM gets, and if the company is willing to pay that pork, put it in our pockets, not the IAM's. I am sure the seat on the board, the 1.25 million, the automatically recognizing the IAM at Mid Atlantic, and the rest cost the company money, and it came out of our pockets. Get rid of the payout, the IAM at Mid Atlantic, and the seat on the board, and in return resotre some vacation and maybe some wages if there is money left over, you have 80-20 passage. Why is this so hard to understand? Maybe because they don't talk with their own membership.
 
Aug 23, 2002
406
0
As for all CWA members needing to take more pay cuts or benefit cuts because other groups who make much more did to spare their morale...Give me a break.....We already have for years....When these groups got big raises and we didn't...Nobody cared about our morale....Yuk..

Yeah, give me a combined 35 percent raise within a year or so like some groups did , and give me 20 % of the company in stock and I'll give some of it back.....

Morale couldn't get much lower than it already is... Between cutting out flights, layoffs, threats, wanting to take money back from the lower paid employees, many living from paycheck to paycheck, & stress from passengers complaints/concerns....The morale probably couldn't get much worse... (I wonder what the ticket sales figures look like right now?)
[:knockout:] [:((] [:knockout:] [:((] [:knockout:]
 
----------------
Apparently the IAM still does not get it. The overwhelming majority of us want a deal... Why is this so hard to understand? Maybe because they don't talk with their own membership.
----------------

N628AU,

You've nailed it on the head. From what I've seen posted on these boards, most of the membership is unified in their cry.

Still with battling the Corporate machine on one side, and taking on the labor machine on the other, we have a large and important battle thrust upon us.

I believe that the only way we can win, is if we and the CWA membership put our backs together and stand tough. Finally we have an audience with an "impartial" judge; let's do this smart. We're only going to get this one chance!
 
OP
C

chipmunn

Guest
During the pending court proceeding if the judge does not agree with the company's target position, he will violate the terms of the DIP financing, emergence financing, and loan guarantee guidelines.

To do so, would place the company at risk. Will the judge enter an order that would grant labor les of a haircut that could end up liquidating the company by placing all of the reorganization financing at risk?

How would it help the creditors by increasing business plan costs and potentially eliminating financing?

Chip
 

N628AU

Veteran
Aug 22, 2002
909
106
www.usaviation.com
Chip,

I agree that the judge will make a ruling that hits the bogey number. The question is, will he go beyond that? I have a tough time believing he will "fine" the unions any more than the bogey number, because if the company just put a proposal on the table less than two weeks previously, it will be difficult for them to prove they suffered any damage. The judge will most likely, IMO, grant was the proposal was in front of the unions previously. With any luck, the creditor's committee will try to appease the employees by taking out the pork the union was to get ($1.25 million payout, automatic representation at MDA, board seat, etc.) That being said, it is entirely impossible to predict what a judge will do. What happened to the CCAIR pilots last week proves that. Whatever happens, may it happen quickly so we can all get back on with our goal of rebuilding this company and emerging from this Chapter 11 nightmare.
 

deltawatch

Veteran
Aug 20, 2002
887
0
www.usaviation.com
"Whatever happens, may it happen quickly so we can all get back on with our goal of rebuilding this company and emerging from this Chapter 11 nightmare".

The fallout from not being fair with your frontline employees, which have already been raped twice, will last for a long time. The bad dream may just be begining. I hope things workout so we ALL can move forward.