This one is for you PI, and the rest of the delusional.
Wednesday, September 15, 2004
By Ann McFeatters, Pittsburgh Post-Gazette
WASHINGTON -- After emerging from a half-hour meeting with US Airways Chief Executive Officer Bruce Lakefield, Pennsylvania's two senators said yesterday that they were sobered by the scope of the bankrupt airline's financial troubles and blamed the Pittsburgh and Philadelphia representatives of the pilots union.
Sens. Rick Santorum and Arlen Specter, both Republicans, said that while past management of the nation's seventh-largest airline, now in bankruptcy for the second time, is responsible for bad decisions, it is a "fact" the Chapter 11 filing was spurred by the pilots union's refusal to let members vote on a contract this past weekend.
Santorum said he was "very, very upset" with the four representatives of the pilots' union board who voted against taking the company's last offer to its membership, noting that eight of the 12 board members voted for it.
Because the two Pittsburgh and two Philadelphia union leaders represented a majority of pilots, they were able to block the motion to send the proposal to rank-and-file pilots.
"The [pilots'] union got their pound of flesh. Now where are we?" Santorum said. "These four individuals decided they could take the airline down, and they did," he said, adding that Lakefield told the two senators that the company was confident the members would have ratified the contract if they had been able to vote.
The Pennsylvania pilot representatives have said they refused to send the offer to their members because it was too draconian, and that their own negotiators had not even agreed to the $295 million concessionary package. Pilots union spokesman Jack Stephan also has argued that the airline was trying to make up for bad management decisions by wringing more cutbacks out of the unions without seeking similar sacrifices elsewhere.
Specter indicated that he would try to meet with the union representatives to hear their side of the story.
He noted that the airline had "complimented the unions for the concessions they've made," some $1 billion during and prior to the last bankruptcy filing two years ago. Specter specifically blamed former CEOs David Siegel and Stephen Wolf for bad decisions, and said it was a "source of wonder" to him that Siegel received a $4.5 million retirement package when he stepped down in April.
Both Specter and Santorum insisted that Lakefield, a former Wall Street banker who's been with the company since May, was doing "a good job." Specter said Lakefield is so hoarse he "can barely talk."
They said Lakefield, who gets an annual salary of $400,000, told them he had no golden parachute such as Siegel's. Nonetheless, Santorum said Specter joked that maybe they could help him by getting him fired. It was the only time in the meeting that Lakefield smiled, Santorum said.
Specter said that while Lakefield said "every effort" would be made to keep the airline afloat, the condition of the company is "a very difficult picture."
Both senators insisted there was no way the White House could intervene and rejected comparisons with the bailouts of Chrysler and New York City. "This is bankruptcy law and nobody, including the president, can supersede it," Santorum said.
Specter agreed, saying nobody should look to the White House for a "magic solution."
Specter said he flew US Airways on Monday, a day after the bankruptcy filing, and found a "high level of anxiety" among the employees he met. "A lot of emotional trauma out there," he said.
First published on September 15, 2004 at 12:00 am
Ann McFeatters can be reached at amcfeatters@post-gazette.com or 1-202-662-7071.
