=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SF Gate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2002/12/10/f= inancial1947EST0423.DTL ---------------------------------------------------------------------- Tuesday, December 10, 2002 (AP) Bronner: US Airways loans hinge on labor deals (12-10) 16:47 PST (AP) -- BIRMINGHAM, Ala. (AP) -- Alabama's pension system chief said the state fund may withdraw some $200 million in promised loans to bankrupt US Airways unless the carrier's union contracts are modified. "The only other choice is liquidation," said David Bronner, head of the Retirement Systems of Alabama. "We can't keep on going as is, with union work rules that are from another century." The state pension system is taking a controlling interest on US Airways' board under an agreement to acquire about a third of the company for $240 million. US Airways' 6,500 flight attendants have little else to give, said Jeff Zack, spokesman for the Association of Flight Attendants union. "We've already given the most valuable thing to the airline -- cash -- with earlier wage and benefits cuts," Zack told The Birmingham News in a story Tuesday. "It seems to me Mr. Bronner's comments are intemperate at best, and might do more than anything to further the cause of liquidation." US Airways must increase productivity by allowing union workers to move between various jobs as the workday demands, Bronner said. "It's like the old railroad industry with them," he said. "Locomotives used to have a fire man long after trains quit using wood as fuel." The airline announced Nov. 26 it would seek more concessions from its unions before filing an updated reorganization plan in bankruptcy court. Some 2,500 employees will be furloughed during the next three months. The state pension system, with $25 billion in assets, would get a share = of dividends that a restructured, profitable US Airways might pay. Also, shares of the company could rise, making the 36 percent stake worth more than the $240 million RSA has agreed to pay. "Opportunities like this don't come around too often," Bronner said. A liquidation of US Airways would generate enough money to repay the $300 million the RSA already has lent, Bronner said. =20 ---------------------------------------------------------------------- Copyright 2002 AP