USAir asks pilots for deeper wage cuts

September 16, 1994|By Ross Hetrick | Ross Hetrick,Sun Staff Writer

Countering a sweeping proposal from its pilots, USAir Group Inc. is asking them to take heftier wage cuts in exchange for a much smaller ownership stake in the company than the pilots union had proposed.

In early August, the Air Line Pilots Association, representing the company's 5,250 pilots, said it would agree to five years of wage and work-rule concessions, amounting to a 20 percent cut in pay, in exchange for employees acquiring a 25 percent stake in the company, $700 million in preferred stock and getting four members on the board of directors.

Recently the Arlington, Va.-based airline countered with a series of offers in which workers would take wage cuts ranging from 27 percent to 31 percent in exchange for a 10 percent stake.

The USAir response falls short of ALPA's proposal. And it signals the likelihood of tough and protracted negotiations between the troubled airline and its union as the carrier struggles to obtain $500 million a year worth of concessions from its employees.

David H. Shipley, a spokesman for USAir, confirmed that the airline had given a counterproposal to the airline pilots, but he refused to discuss the details.

"We have made a counter-proposal, but we are not going to present details of it," he said. "We'll keep the bargaining at the bargaining table."

The employee givebacks are considered critical to the viability of USAir which has lost more than $2.3 billion since 1989. This year, its losses are expected to top last year's $350 million.

Kelly Ison, a spokesman for the ALPA in Pittsburgh, also declined to discuss the proposal but confirmed that a wide gap exists between the union and company.

"We're fairly well disappointed that they choose to respond like that," he said. "They have to realize this is not a labor negotiation, but a corporate restructuring."

In August, the pilots union called for a "reinvention" of the airline. Besides wage cuts -- that the union said would amount to $2.5 billion over a five years from all employees -- the union also called for British Airways to invest an additional $450 million in the airline.

British Airways, which owns 22 percent of USAir's stock and has invested $400 million in the airline, has turned thumbs down on that idea.

USAir has said the ALPA proposal is "far short" of what it needs and called it an attempt by the union is take control of the company. USAir also said the wage cuts are "illusionary" because they are based on anticipated higher wages in the future, rather than present levels.

Other unions representing the airline's mechanics and flight attendants have also objected to the ALPA plan, saying their lower-paid members should not shoulder the same percentage cuts as the pilots, whose average wage is $125,000 a year.

USAir, which employs 45,000 workers, is the largest carrier at Baltimore-Washington International Airport.

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