US Air Mechanics Prepare for Fight



US Air Mechanics Prepare for Fight
RICHMOND, Va., Aug 29, 2002 (AP Online via COMTEX) -- The union representing US Airways' mechanics said it is prepared to fight any attempt by the airline to win wage and benefit concessions through bankruptcy court.
Mechanics represented by the International Association of Machinists rejected the push for concessions early Thursday. Fleet service employees, who load luggage and freight, accepted them.
The airline, which is operating under Chapter 11 bankruptcy protection, had sought $219 million in annual savings from its largest union as part of a $1.2 billion cost-cutting plan. The split vote means a savings of $65 million, the union estimated.
David Siegel, US Airways president and chief executive, said the company would pursue the concessions from mechanics through bankruptcy court if a deal is not reached before a Sept. 10 hearing. No negotiations have been scheduled, spokesmen for both sides said.
"The next step is up to US Airways," said International Association of Machinists and Aerospace Workers spokesman Joseph Tiberi.
He said the union was willing to meet with management. "But we're also prepared to defend our members and their contracts in court if they go through with the plan to ask the bankruptcy court to authorize amendments," he said.
US Airways spokesman Dave Castelveter said company officials expect to meet with union negotiators soon.
"Time is critical," he said. "We want to emerge from Chapter 11 in the first quarter of 2003, so we have to make something happen on the labor front in the very near future."
The fleet employees agreed Thursday to accept 8 percent wage cuts now, with increases of 2 or 3 percent between 2005 and 2008. They also lose 10 sick days, vacation days and holidays. Sixty-two percent of the fleet employees approved the concessions.
Fifty-seven percent of mechanics and related workers voted to reject pay cuts of 7 percent now, followed by annual increases of 2 percent in 2004-07 and 5 percent in 2008. They also would have lost nine sick days, vacation days and holidays.
Wage concessions do not apply to employees who make less than $30,000.
The vote was intended to allow US Airways to gain access to $175 million in financing that is part of a larger $500 million package, according to court records.
US Airways also is negotiating with the Communications Workers of America on a wage and benefit concession package. The CWA's 6,700 passenger service employees are being asked to accept $70 million in annual wage cuts. If an agreement cannot be reached, the bankruptcy court will be asked at the Sept. 10 hearing to invalidate the airline's contract with the CWA.
"It's critically important to our restructuring that all the employee groups share in the sacrifices of the cost-cutting plan," Castelveter said.
US Airways, which has had the industry's highest labor costs, is seeking about $840 million in annual labor cost cuts as part of its plan to restore profitability. The airline lost $2.1 billion in 2001 on revenue of $8.3 billion.
The pilots' union, flight attendants and Transport Workers Union had already agreed to a combined $552 million in cuts.
Arlington, Va.-based US Airways, the nation's seventh largest carrier, was the first major airline to file for bankruptcy after the Sept. 11 attacks.
Hey..I don't know about you but, I don't want any p---ed off mechanics working on the plane, I'm flying in....

I believe the legal teams of IAM and CWA need to work together on this one...
Sir, all the throatcramming was performed by U mgt with a contractshredder held to our heads. Maybe cooler heads will prevail once we sit back down at the table.
This fight was not started by U mechs. W&G set the stage and Dave&Friends fired the opening shots, the IAM forced by this weeks vote will have to seriously defend their labor group or forfeit the ability to represent us. While negotiations will begin once again, TPG, Davis&Orinstein and god knows what other players(W&G?) will strategize their next move with total disregard for passengers and employees in this high stakes game where winning is everything, not saving an airline.
UAL777flyer...let me pose a question to you. Have you at all once thought that maybe it is the company playing hardball with CWA and IAM???? 12 proposals from CWA being returned by the company to CWA gives me the impression that they are. Not trying to start flame throwing, just a question.
Of course I've thought about it. And of course they're playing hardball with the unions. They're trying to save the airline from ceasing to exist. They hold all the leverage. If you think you're going to get a better deal from the judge, you're in for a big surprise come September 10th. The end result is that no matter how this shakes out, the best outcome for you is going to be a very painful set of changes that are going to significantly impact all of you. It's better to negotiate that pain and try to save your company than to have it crammed down your throat by a third party.
Negotiations were underway with IAM when ALPA&AFA settled then u filed ch.11 to avoid the lease payments that came due, the primary reason for our problems ala W&G. With ch.11, U mgt was given the free hand to force proposals at IAM, while attracting TPG&Friends after ALPA/AFA agreements, with no incentive to bargain in good faith. For this mech alone this was reason to vote no, come back when you want to negotiate not just demand.
I ask this homestly not to stir? Are we to believe that us just wanted to pick a fight with only the iam and cwa and were happy with the other union bois and girls? I mean why do you think all the other unions agreed to the percentage of paycuts and voted yes but these 2 unions feel the company isnt being fair to them ? Some one explain to me Thanks

What some people fail to recognize this is not a negotiation in a traditional sense. The negotiation is for an employee group to figure out how they want to take the cuts, not whether or not there will be cuts.

The company must meet target cost savings to obtain the DIP financing, emergence financing, and the loan guarantee. Without such cuts the company will not have access to the capital markets to continue to operate and restructure.

The company is in default and nobody will loan a bankrupt company any funds unless the employee target concessions for all labor groups are met per the financing agreements.

There is very little room here. All labor groups except the IAM-M and CWA have reached new multi-year contracts and there is no time for the ratified contracts to be opened up and renegotiated.

Either those unions without restructuring agreements reach a voluntary accord or the company will seek deeper cuts, which would provide a lower CASM for the company if approved and the enterprise survives, provided the court imposes a contract on those holdout unions, which appears likely.

In the meantime you can bet that DL & AA will seek to acquire US assets and force the liquidation of US, just like at Eastern & Braniff.

Again, the option is not the amount of the cuts, but where they will occur. There is no option for the company because the DIP financing, emergence financing, and loan guarantee agreements require the target savings.

In the meantime, the IAM-M & CWA hold the US restructuring effort hostage until September 10.


While I mostly respect your opinions here, you are becoming tiresome on the liquidation possibilities. I do not agree with how the mechanics voted (I voted yes). I don't like how the IAM handled the whole deal. They protected themselves, didn't work with the membership from what I saw (did anyone get polled on what issues mattered to them?), went long stretches of time with no updates, and then took the week before the company filed off from negotiations to go to some conference (golf anyone?). I don't think this slows the restructuring greatly. This court date has been set for some time, it's not like the company now has to get a date, and therefore effect the date of emergence.

I can understand you feel frustrated having your cuts in place and someone else does not. I feel frustrated as well still having this hang over my head. The IAM had better find out what has teed most of its membership off, and fix it in the next week. The IAM would not even talk pushbacks or deicing. I don't think most would care if they gave deicing back to the company, and got us come cash in return. People saw the board seat, the pension, and holding on work rules as a way to protect the IAM dues machine, and not in our best interest. I still think they should not have used this vote as a backlash against the IAM, but that is what happened. The cuts will come, just of matter of what cuts they will be, and who imposes them.
On 8/30/2002 2:15:50 PM

I ask this homestly not to stir? Are we to believe that us just wanted to pick a fight with only the iam and cwa and were happy with the other union bois and girls? I mean why do you think all the other unions agreed to the percentage of paycuts and voted yes but these 2 unions feel the company isnt being fair to them ? Some one explain to me Thanks
What other goups have agreed to is no concern of mine.
Nor should you concern youself with any iam affairs.
Better yet do what you did in 92 ignore us and jump in bed with the co.

N628AU, you're right I am frustrated and the whole process is bad. Thanks for your constructive post.

628AU is right,the IAM tried to give things away that most of us feel are important(vac time for one)and keep things that most of us aren't really concerned with.Too bad nobody asked us.This whole mess could have been avoided.