US Airways could go to court
to institute pay cuts
By Barbara De Lollis, USA TODAY
Trying to dissipate the skepticism of outsiders
about US Airways' future, CEO Bruce Lakefield told employees
late Wednesday that he intends to seek court-imposed pay cuts
Unless unions approve emergency pay cuts Thursday,
Lakefield said, the airline will ask the bankruptcy court to
allow management to implement them. He didn't specify the amounts.
The airline would have to argue its case for emergency relief.
"If we were to do nothing during the
traditionally slow fall and winter months, the drain on our
cash reserves would jeopardize the company's future and everyone's
job," Lakefield said in a letter to employees.
The Arlington, Va.-based carrier is seeking
payroll relief from all unions that have not yet reached concessions
pacts with it. So far, only one group of about 150 flight dispatchers
has reached a tentative agreement.
Lakefield released his letter hours after
US Airways' pilot leaders voted unanimously to restart concessions
talks with the company. Emergency pay cuts approved by the bankruptcy
court wouldn't preclude longer-term negotiated concessions.
The USA's No. 7 airline filed Sept. 12 for
reorganization under bankruptcy-court protection, its second
such filing in 25 months.
The new filing followed management's failure
to secure $800 million in annual pay and benefit cuts and work-rule
changes from its labor groups. During the first bankruptcy reorganization,
US Airways employees conceded $1.2 billion annually.
Wednesday, the 12-member pilots council voted
to drop restrictions on their negotiators that effectively stifled
earlier negotiations. Negotiators now have "renewed momentum,"
pilots spokesman Jack Stephan says.
The about-face, however, may come too late
to give pilots much bargaining power with management.
The airline is now seeking cuts of as much
as $436 million a year through 2009 instead of the initial goal
of $295 million through 2008.
The latest management proposal seeks 19.5%
pay cuts and cuts in some pilots' seniority, which would mean
less job protection and less preference in scheduling.
The pilots aren't surprised that the company
is seeking deeper cuts, Stephan says. Operating in bankruptcy
costs more, and the company's turnaround plan had erroneously
assumed concessions from all unions would be in place by Sept.
30. Furthermore, the company desperately needs to conserve cash
because it can't get fresh financing from outsiders.
In his message, Lakefield said he still prefers
to reach consensual agreements with unions. He called the decision
a "difficult, but necessary" one crucial to keep customers'
"We want to be certain that passengers
feel confident continuing to book on us," Lakefield said.