|
|
Mitchell also approved a request to terminate machinists’ and flight attendants’ pension plans and a frozen pension plan that was still providing benefits to 28,000 retirees.
For US Airways, it means a savings of almost $1 billion in pension obligations now through 2009.
It is the first time in the history of the U.S. airline industry that such drastic action has been taken by a bankruptcy judge.
But, Mitchell maintains, he was basically caught between a rock and a hard place.
"Which is worse -- that half of the mechanics lose their jobs or that all of the mechanics lose their jobs?" asked the judge, referring to the potential shutdown of US Airways.
Indeed, executives at the financially-beleaguered airline threatened liquidation of its assets as early as this week if they didn’t receive about $800 million in annual cost cuts from their labor unions.
Machinists will have a chance to nullify Mitchell’s alarming action on Jan. 21 when they vote on the company’s proposed contract.
If approved, the outcome will still be bleak for the employees who, despite the tweaking of pay cuts and work rule changes, will have to make the same dollar level of concessions.
Union negotiators are not making a recommendation for approval but, as union president Randy Canale noted in a letter to members, "voting provides our members with an opportunity to avoid termination of their agreements."
Some choice.
Understandably, some union machinists have threatened to strike if their contract is canceled. But the bankruptcy judge has wisely observed that US Airways’ "financial situation is not going to be enhanced by labor strife."
"I cannot decree labor peace any more than I can decree profitability. The ultimate question is whether there will be any jobs at the end of the day," said Mitchell.
All the same, it seems employees have born the brunt of US Airways’ financial woes.
This is the third round of concessions US Airways has sought from its unions in less than three years. Just last Wednesday flight attendants approved a new labor contract that cuts their pay by nearly 10 percent, saving the company about $94 million a year.
The federal government’s Air Transportation Stabilization Board lent US Airways $900 million in March 2003 to help it with its first bankruptcy.
The US Airways executives are hoping for an extension on the stabilization board’s Jan. 15 financing agreement deadline by sufficiently demonstrating that they have cut labor costs.
Now Continental Airlines executives are seeking $500 million in wage and benefits reductions and United Airlines executives say they need to cut $725 million off annual labor costs.
But the question remains, how did US Airways and other airlines get in this mess to begin with?
The high price of jet fuel is reportedly part of the problem with the Air Transportation Association estimating that all U.S. airlines spent $6 billion or 40 percent more for jet fuel in 2004.
Increasing airfare competition from low-cost carriers is also apparently contributing to the economic crises of airlines.
While it is in the best interest of employees to do what they need to do to preserve their jobs, bailing out the airlines shouldn’t fall entirely on the backs of the workers -- or the taxpayers, for that matter.
For employees to essentially be forced to choose the lesser of two evils by a bankruptcy judge, is a frightening omen for all American workers. For current and former employees to be ruled out of their hard-earned pensions is an outrage.
The Bush Administration has cultivated this "take it or leave it" attitude towards workers through its tax breaks for the rich and enabling of outsourcing, among other favors to corporate America.
With the threat of more than one U.S. air carrier dying at the start of his second term, President Bush should demand accountability from corporate executives whose poor management decisions have contributed to their companies’ financial crises, and require them to make some monetary concessions of their own.
And while he is at it, maybe Bush can get his oil baron buddies to do something about the high price of jet fuel.
