Crunch time at airlines
Crunch time at airlines
JOB ACTIONS over US Airwaysâ€™ attempt to void union contracts--and threats of similar actions at United Airlines--shook up air travel during the holiday period and highlighted the urgent need for labor solidarity in the industry.
A Christmas Day sick-in by ramp workers at US Airways caused massive confusion and forced cancellation of 1,100 flights. The workers, members of the International Association of Machinists (IAM), stayed away from work to protest management threats to void union contracts and impose $350 million in wage and benefit cuts.
US Airways is seeking $1 billion in concessions--this on top of $1.2 billion worth of givebacks during an earlier round in bankruptcy court in 2003. All told, the six major airlines aim to extract $7.5 billion in concessions in 2005 and wipe out at least 20,000 jobs.
The excuse for this cut is high labor cots--but after the concessions at the major carriers, Southwest Airlines, for example, has the highest-paid mechanics.
The real reason for the crisis is the chaos caused by deregulation of the industry and a short-term scramble for profits that led to overcapacity. Now the airline industry creditors are in a brutal cost-cutting war to try to drive one or more carriers out of business and restore profits for the rest.
In the case of US Airways, the governmentâ€™s Air Transportation Stability Board is cracking the whip for the cutbacks under terms of a federal loan guarantee. Banks and a major creditor, General Electric, also want concessions.
Ramp workers drew the line on Christmas Day--and showed the potential power that airline workers have. Managementâ€™s response to the job action was to ask US Airways employees to work the New Yearâ€™s holiday for free.
Unfortunately, the fightback at US Airways was weakened when the local union representing 6,000 customer service representatives, members of the Communications Workers of America (CWA), voted December 23 to accept a contract that included $137 million in wage reductions--a 12.9 percent pay cut--despite an earlier threat to strike.
The Association of Flight Attendants (AFA), which recently affiliated with the CWA, also dropped a strike threat to reach a tentative agreement with US Airways that will surrender $157 million by agreeing to terminate their pension and eliminate retiree health care coverage. Newly hired flight attendants will earn as little as $12,000 per year. A vote on the deal was set for January 5. For their part, pilots, members of the Air Line Pilots Association (ALPA), agreed to a deal with US Airways worth hundreds of millions in concessions--this after the unionâ€™s $3.7 billion pension plan was terminated in 2003.
The picture is similar at United, where management plans to use a January bankruptcy court ruling to gain the authority to void union contracts. The company has already obtained $5 billion in concessions and 20,000 job cuts since entering bankruptcy two years ago. The AFA has voted to authorize a strike if management goes ahead with the plan.
United is seeking to play unions off against one another. Even while threatening to wipe out contracts, theyâ€™ve proceeded to negotiate a deal with ALPA in which the pilotsâ€™ defined-benefit pension would be converted into a 401(k)-type plan. Management would then use the ALPA deal to try to impose a similar plan on other workers, who are paid far less than pilots and who couldnâ€™t afford to save as much in any case.
Yet some of the money for the pilotsâ€™ new retirement plan would come from the insurance premiums that United ceased paying to the Pension Benefits Guarantee Corp. (PBGC), a federal institution that insures defined-benefit plans. For that reason, the PBGC moved to seize control of the United pilotsâ€™ pension plan in order to cover $8.3 billion in liabilities for 120,000 workers and retirees.
Meanwhile, Unitedâ€™s negotiations continue with mechanics, who since 2003 have been represented by the Airline Mechanics Fraternal Association (AMFA). Mechanics voted to oust the IAM as their bargaining agent after that union refused to take a stand against concessions (Ramp workers at United, however, are still represented by the IAM).
The mechanics feel they canâ€™t retreat any further. â€œWeâ€™re lucky to find work that pays half of what we made at United,â€ said Jennifer Salazar Biddle, a laid-off mechanic at the airline. â€œIâ€™ve corresponded with mechanics who mow lawns and drive tow trucks trying to make ends meet.â€
The one-at-a-time concessions bargaining by airline unions has already been catastrophic--and if they continue down this path, even worse setbacks are in store. The resistance at US Airways on Christmas Day points in a different direction--in which workers can fight back and rally public support for a sane, re-regulated and safe air travel system that puts people before profits.