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Reuters
US Airways Outlines Mechanics' Requests
Wednesday November 27, 12:28 pm ET
NEW YORK (Reuters) - US Airways Group Inc. (OTC BB:UAWGQ.OB - News), which filed for bankruptcy in August, has asked mechanics and fleet service workers to let it outsource certain tasks, raise medical insurance costs, and make other changes in work rules to help save another $200 million each year, union representatives said.
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The proposed cuts, announced late on Tuesday, are part of a new push by Arlington, Virginia-based US Airways to slash another $300 million in yearly costs, on top of $1.3 billion in annual wage cuts already secured.
Revenue at the bankrupt air carrier, the nation's sixth-largest, has come in below levels it targeted in its application for $900 million in federal backing on a $1 billion loan.
That application for loan guarantees won conditional approval from the government's Air Transportation Stabilization Board. But US Airways does not expect final approval until it cuts enough costs to make up for the revenue shortfall and emerge from bankruptcy, which it expects to do in March.
The carrier announced on Tuesday that it would furlough 2,500 workers from all areas of its operations in the next three months. It immediately shut down a maintenance facility in Tampa, Florida, which the International Association of Machinists (IAM) said put 500 of its members out of work.
US Airways management met with IAM representatives late on Tuesday and said the airline was looking to save $200 million by changing employee work rules and benefits across its work force, according to a Web bulletin posted by union representatives.
US Airways spokesman David Castelveter would not comment specifically on talks with the IAM, but he said success was crucial in negotiations with all of the airline's labor unions over work rule changes.
It is imperative that we reduce our cost structure by $1.6 billion annually, and in order to do that, we need to continue to work with our employees to find ways to operate more productively, Castelveter said.
IAM Presidents and General Chairmen Randy Canale and Scotty Ford bristled at new requests from the airline.
When IAM members recently ratified modifications to their US Airways agreements, it came with the company's assurance that the revisions were all US Airways needed to successfully emerge from bankruptcy, Canale and Ford said in the letter to union members.
IAM leadership agreed that new changes to the contracts are not acceptable and have not been proven justified, they added.
The IAM was the only labor union to initially vote down its wage concession proposal from US Airways, which called for $160 million in wage cuts and other concessions each year. The union voted again and approved the package in mid-September.
US Airways asked IAM representatives on Tuesday for permission to outsource plant and ground equipment maintenance, aircraft catering, mail and cargo, and other operations. It requested that lower-qualified workers replace the mechanics who receive and push out airplanes and de-ice them.
US Airways also said it wants to eliminate its commitment for a 2-percent match to 401(k) retirement plan contributions for mechanics, and requested that all IAM members double their contributions for medical benefits.
In the case of a war with Iraq, US Airways said it will seek an immediate wage deferral of 5 percent for up to a year and a half, the message to union members said.
In return for workers' cooperation, the air carrier would agree to keep its fleet of aircraft at the current level of 279 or higher to protect jobs.
Well well...Maybe we can give back less , if we guess correctly on how long it takes to whip Saddams butt?
They are certainly covering all the bases , aren't they?
Maybe they should apply the same amount of effort to getting people to actually fly on our planes...then maybe less of this doom and gloom would be needed.