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US Airways mechanics reject concessions
©Associated Press RICHMOND, Va. -- The union representing US Airways' mechanics said it is prepared to fight any attempt by the airline to win wage and benefit concessions through bankruptcy court. Mechanics represented by the International Association of Machinists rejected the push for concessions early Thursday. Fleet service employees, who load luggage and freight, accepted them. There are about 420 US Airways mechanics and related workers at Tampa International Airport, where the airline operates a maintenance hangar. The airline, which is operating under Chapter 11 bankruptcy protection, had sought $219-million in annual savings from its largest union as part of a $1.2-billion cost-cutting plan. The split vote means a savings of $65-million, the union estimated. David Siegel, US Airways president and chief executive, said the company would pursue the concessions from mechanics through bankruptcy court if a deal is not reached before a Sept. 10 hearing. No negotiations have been scheduled, spokesmen for both sides said. "The next step is up to US Airways," said International Association of Machinists and Aerospace Workers spokesman Joseph Tiberi. He said the union was willing to meet with management. "But we're also prepared to defend our members and their contracts in court if they go through with the plan to ask the bankruptcy court to authorize amendments," he said. US Airways spokesman Dave Castelveter said company officials expect to meet with union negotiators soon. "Time is critical," he said. "We want to emerge from Chapter 11 in the first quarter of 2003, so we have to make something happen on the labor front in the very near future." The fleet employees agreed Thursday to accept 8 percent wage cuts now, with increases of 2 or 3 percent between 2005 and 2008. They also lose 10 sick days, vacation days and holidays. Sixty-two percent of the fleet employees approved the concessions. Fifty-seven percent of mechanics and related workers voted to reject pay cuts of 7 percent now, followed by annual increases of 2 percent in 2004-07 and 5 percent in 2008. They also would have lost nine sick days, vacation days and holidays. Wage concessions do not apply to employees who make less than $30,000. The vote was intended to allow US Airways to gain access to $175-million in financing that is part of a larger $500-million package, according to court records. US Airways also is negotiating with the Communications Workers of America on a wage and benefit concession package. The CWA's 6,700 passenger service employees are being asked to accept $70-million in annual wage cuts. If an agreement cannot be reached, the bankruptcy court will be asked at the Sept. 10 hearing to invalidate the airline's contract with the CWA. "It's critically important to our restructuring that all the employee groups share in the sacrifices of the cost-cutting plan," Castelveter said. US Airways, which has had the industry's highest labor costs, is seeking about $840-million in annual labor cost cuts as part of its plan to restore profitability. The airline lost $2.1-billion in 2001 on revenue of $8.3-billion. The pilots' union, flight attendants and Transport Workers Union had already agreed to a combined $552-million in cuts. US Airways of Arlington, Va., the nation's seventh-largest carrier, was the first major airline to file for bankruptcy after the Sept. 11 attacks. UNITED'S LABOR COSTS: United Airlines of Chicago said Thursday that it is asking its employees to approve cutting its labor costs by $1.5-billion annually over the next six years as part of its emergency restructuring plan. The labor cutbacks, to include pay reductions and the scrapping of recently negotiated raises, would provide the bulk of the $2.5-billion the struggling carrier has targeted in annual savings in order to ensure its recovery. The first specifics of United's plan to transform itself into a smaller, more cost-efficient carrier came at the halfway point of its self-imposed 30-day deadline for reaching agreements with labor and other groups on far-reaching cutbacks. UNITED'S TICKETING: UAL Corp.'s United Airlines said it's tightening rules on upgrades and fare discounts and is raising the fee for issuing paper tickets to $20 as part of cost- cutting efforts to avoid bankruptcy. The company will strictly enforce fare rules and minimum and maximum stay requirements for domestic and international flights, UAL said in a statement distributed by Business Wire. United also said it will eliminate additional reductions on already discounted fares when negotiating prices with corporate customers. -- Times staff writer Steve Huettel contributed to this report, which used information from Bloomberg News.
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From the Times Business report
From the AP
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