This article from NYTimes.com has been sent to you by psa188@juno.com. /-------------------- advertisement -----------------------\ Enjoy new investment freedom! Get the tools you need to successfully manage your portfolio from Harrisdirect. Start with award-winning research. Then add access to round-the-clock customer service from Series-7 trained representatives. Open an account today and receive a $100 credit! http://www.nytimes.com/ads/Harrisdirect.html \----------------------------------------------------------/ Unions Mostly Negative, So Far, on US Airways' Call for Cuts May 25, 2002 By EDWARD WONG US Airways ended a week of first-round talks yesterday with its six unions in which it asked for substantial cuts in wages and benefits to help the airline obtain a federal loan guarantee. But the largest unions left the table with mixed reactions to the demands, ranging from "more than necessary" to "totally unacceptable." The airline has said it wants to cut a total of $950 million from nonmanagement labor costs to present a business plan by June 15 to the government to secure the loan guarantee. David N. Siegel, the chief executive, has said he wants to shave more than $1.2 billion off the total costs. The application to the government could succeed or fail depending on labor concessions. Union representatives said that the airline wanted annual cuts of $595 million from pilots; $182 million from mechanics; $90 million each from the flight attendants and the customer service agents; and $79 million from fleet service workers. The airline also asked for concessions from its dispatchers' union and from sales agents in Bermuda. The cuts would come from wages, health care, pension plans and virtually every other area. "The initial response is that the proposals are totally unacceptable," said Joe Tiberi, a spokesman for the machinists' union, which represents mechanics and fleet service workers. "US Airways had to know that these proposals would be unacceptable to our members." But in such negotiations, airlines often start with an overly high number. The amounts asked of the unions add up to more than the $950 million that Mr. Siegel had said he wanted. Executives will meet with some union representatives next week to continue talks, although the machinists' union said it wanted to review the proposals before committing itself to further discussions. "We are meeting with all the stakeholders to put together the restructuring plan," said David Castelveter, a spokesman for US Airways. "But it would be inappropriate at this time to discuss the details. We'll leave those talks in the room." Last month US Airways reported a first-quarter loss of $166 million. That was its seventh consecutive losing quarter. It lost $2 billion last year and suffered more than almost any other airline after the Sept. 11 attacks because it concentrates its flights on the East Coast. Nearly 90 percent of the airline's 35,700 or so employees are members of a union. "We think what they're asking is more than necessary for pilot contribution," Roy Freundlich, a spokesman for the Air Line Pilots Association, said yesterday. There are about 4,800 pilots at US Airways, with 1,100 more on furlough. Their salaries range from $35,000 for a new hire to $280,000 for a senior captain. The pilots are also concerned about Mr. Siegel's plans to increase the airline's regional jets to 300 within five years, since pilots who fly such jets are paid less. The $90 million that the airline wants to cut from the flight attendants is about 21 percent of that group's current labor costs. There are 7,500 active flight attendants and 2,500 on furlough. "Attempting to cut 21 percent of the overall flight-attendant costs in essentially 15 days is not a reasonable request," said Jeff Zack, a spokesman for the Association of Flight Attendants. "As we go along, we will work on a number that we think is most appropriate and try to come to an agreement with US Airways at the end of the day that this number will work with them." The Communications Workers of America, which represents more than 7,000 active customer service and sales agents, posted details of the airline's requests on its Web site. "These discussions are going to be very difficult," the message said. "We cannot commit to a solution that is unfair to passenger service employees, and at the same time we want to ensure the survival of the airline." Mr. Siegel has said that workers who are paid the most will have to concede the most, and that employees will be able to enter into a profit-sharing plan under the restructuring. US Airways would be the seventh and largest airline to apply for a federal loan guarantee. Congress set up the $10 billion program last fall, and only America West's application has been approved. It received $380 million last fall, but the government asked for the option to buy a third of its stock, sending shivers up the backs of airline executives around the country. http://www.nytimes.com/2002/05/25/business/25AIR.html?ex=1023375893&ei=1&en=d710b7b02f053468 HOW TO ADVERTISE --------------------------------- For information on advertising in e-mail newsletters or other creative advertising opportunities with The New York Times on the Web, please contact onlinesales@nytimes.com or visit our online media kit at http://www.nytimes.com/adinfo For general information about NYTimes.com, write to help@nytimes.com. Copyright 2002 The New York Times Company