Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, August 18, 1994 TAG: 9408190024
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: Knight-Ridder/Tribune
DATELINE: PHILADELPHIA LENGTH: Medium
Officers and financial advisers of the Air Line Pilots Association, at an informational meeting for union members in Philadelphia, said they were not seeking control of USAir but were demanding an equity stake and a voice in running the airline in exchange for wage cuts.
The union plan unveiled earlier this month calls for $2.5 billion in wage concessions over five years in exchange for employees' receiving 25 percent ownership of the airline. Under the proposal, the 5,250 unionized pilots would take $750 million in payroll cuts, and other employees would provide the rest.
USAir management objected to key portions of the union plan, especially that it would add more common shares, diluting the interest of current shareholders.
USAir, in a statement, said earlier that the pilots were seeking ``effective control'' of the airline's board while buying, through wage cuts, only 25 percent of the company.
The airline's two other major unions attacked the plan as well, saying it sought too great a sacrifice from them.
ALPA officials said the plan's cool reception was no surprise.
``The company has not given us a thoughtful response to our plan,'' union adviser Michael Glanzer said.
Despite the criticism, ALPA officials said they expect to start discussing the plan with company executives next week.
Bob Gaudioso, vice chairman of ALPA's USAir master executive council, said there is a model in what USAir can become in the turnaround at Northwest Airlines, which has become profitable after flirting with Chapter 11 last year. Northwest employees gave up some pay in exchange for a 30 percent stake.
ALPA expects negotiations among representatives of USAir's three other unions - representing mechanics, flight attendants and flight dispatchers - also will be difficult, because all employees are going to have to give up pay, Gaudioso said.
``This is going to be tough,'' he said. ``We're not the only ones here. We can't fix USAir by ourselves.''
Vic Mazzocco, a spokesman for the International Association of Machinists, said in a telephone interview that the major objection to the pilots' plan is that it expects pilots who make $100,000 a year and machinists, some of whom make $7 an hour, to take equal 20 percent pay cuts.
``We don't think one-size-fits-all is a valid approach,'' Mazzocco said.
USAir has lost more than $2 billion since 1990 and faces new low-fare competition on its major East Coast routes. With some of the highest labor costs in the industry, the airline has said it needs a $1 billion cut in annual operating costs.
by CNB