The leader of a rebel pilot group at US Airways accused the company of demanding too many sacrifices from employees, saying that the airline's request for $295 million in annual wage and benefit cuts from the pilots had ÿgone from need to greed.ÿþþBut the airline's chief executive, Bruce R. Lakefield, urged the pilots' union to accept the airline's proposal, arguing that ÿthe price is even higherÿ if no agreement is reached and US Airways is forced to seek bankruptcy protection. þþThe deadlock with the pilots is increasing the likelihood that the airline will file for bankruptcy this month, a move that many believe could lead to the airline's liquidation. þþLate Monday, leaders of the rebel group blocked a move to have the members of the pilots' union, the Air Line Pilots Association, vote on the latest cuts proposed by the airline even though no agreement had been reached between the pilots' bargaining committee and the company. The chairman of the union's leadership, Bill Pollock, said that there were no talks with the company yesterday and that he did not know ÿwhether and whenÿ talks would resume.þþEven so, both sides said they were willing to hold discussions, which industry experts took as a sign that there was still some hope for a deal, though time is running out. þþAn agreement with the pilots is seen as crucial for the struggling airline to win agreements from its other unions on the wage and benefit cuts of $800 million a year it says are needed to avoid a second bankruptcy filing. US Airways hoped to get the deals in place by Sept. 15, when it is scheduled to make a $110 million payment to its pension plans. þþBut the pilots' union is deeply divided over whether to grant any more concessions to US Airways, which is based in Arlington, Va. The pilots ÿare being confronted with this all-or-nothing proposition,ÿ said Gary L. Chaison, professor of management at Clark University in Worcester, Mass.þþUS Airways employees have already accepted two rounds of pay and benefit cuts, collectively worth $1.9 billion, while the airline was in bankruptcy protection. The airline emerged from bankruptcy in April 2003 to find that its costs were still much higher than low-fare rivals like Southwest and JetBlue.þþNow, the airline is trying to accomplish what it calls an ÿextreme makeoverÿ and refashion itself to resemble those carriers, with cuts in labor costs as the linchpin of a $1.5 billion restructuring plan.þþUS Airways is seeking the largest single portion of the cuts from its pilots, and met almost continuously with their union last week. People who have been briefed on the latest proposal from the company said that it called for a 21 percent cut in wages, and reduced contributions by the company to the pilots' pension plan.þþPensions are a particularly sensitive issue for the pilots. Before US Airways emerged from bankruptcy, the airline terminated the pilots' old retirement plan and replaced it with a less-generous program that combined a traditional pension with a 401(k) savings plan. Senior pilots, many of them based at the airline's hubs in Pittsburgh and Philadelphia, were particularly angered by the change.þþOn Monday, four members of the union's master executive council who represent pilots in Pittsburgh and Philadelphia voted to keep the company's latest proposal from being presented to the 3,000 union pilots for a vote. The council has 12 members and often makes decisions by a voice vote. But when a roll-call vote is requested, their ballots are weighted according to the number of pilots each member represents. The ballots cast by the four dissenting members - Fred Freshwater and John Brookman, who represent 700 pilots based in Pittsburgh, and Dan Von Bargen and John Crocker, who represent 1,200 Philadelphia pilots - counted for almost two-thirds of the union, outweighing those cast by the eight other members of the council. þþMr. Pollock, in a union statement, said he was ÿdisappointedÿ by the outcome, because he thought that the company's proposal provided pilots with ÿprotections that might not be available at a later date.ÿ He did not elaborate. þþMr. Freshwater said yesterday that he did not oppose all concessions to the airline, but that US Airways had demanded too much.þþÿI think the company has gone way beyond what they need to ask for,ÿ Mr. Freshwater said in an interview. ÿIt's gone from need to greed.ÿþþMr. Freshwater, the chairman of the union's Council 94 in Pittsburgh, said he and his fellow pilots did not think that they were holding the airline hostage by their stance. He noted that the union's negotiators had neither agreed to nor endorsed the company's proposal. þþHe said that 97 percent of the pilots in Pittsburgh and Philadelphia were against accepting more cuts. ÿI think the company is playing on the fears of the pilot group, and hopes to have a positive result from it,ÿ Mr. Freshwater said.þþMr. Lakefield, the chief executive of US Airways, said that the airline had originally proposed smaller wage cuts, but in combination with work-rule changes that would have eliminated hundreds of jobs. When the pilots' negotiating team balked, he said, the airline had to seek more savings from the pilots' paychecks instead. þþÿWe do not take lightly the sacrifices you have already made or the fact that all of us must make more,ÿ Mr. Lakefield said in a letter sent yesterday to the airline's cockpit crew members. ÿBut we also all know the price is even higher if we simply do nothing.ÿ He said the airline was ÿnot prepared to throw in the towel or conclude that we cannot reach an agreement.ÿþþA spokesman for US Airways, David Castelveter, stressed the airline's need to meet its financial commitments, including the pension payment and the requirements of the airline's federally guaranteed loans, the basis of its emergence from bankruptcy. US Airways must also satisfy lenders like GE Capital and the regional jet makers Bombardier and Embraer.þþLast month, a financial report prepared for the pilots' union by its financial adviser warned that US Airways was in danger of being liquidated if it filed for bankruptcy again, a warning echoed by the airline's chairman, David G. Bronner, who heads the Alabama pension fund that is the airline's biggest shareholder.þþMr. Freshwater said that he thought US Airways had already made up its mind to seek bankruptcy protection, although he acknowledged that it was ÿnot a foregone conclusion.ÿ þþThe pilots and the airline's other workers could end up worse off if that happens, said Robert W. Mann Jr., an industry consultant based in Port Washington, N.Y.þþMr. Mann said that any bankruptcy judge would look for evidence that the company had tried to solve its financial crisis before deciding whether to allow US Airways to terminate its labor agreements and replace them with less-generous contracts. ÿUS Airways might come in and say, 'We were expecting the pilots to lead, and they did - right over the edge,' ÿ Mr. Mann said.þþProfessor Chaison said some rhetoric from the union leaders was meant to persuade members that they were fighting hard. ÿThis is the ultimate in hardball,ÿ he said. ÿIt doesn't get any worse than this.ÿ þþþþ
Source: NY Times
