=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SFGate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2004/09/16/f= inancial0939EDT0044.DTL --------------------------------------------------------------------- Thursday, September 16, 2004 (AP) Alitalia ground crew unions agree to 2,500 job cuts ALESSANDRA RIZZO, Associated Press Writer (09-16) 11:09 PDT ROME (AP) -- Alitalia said Thursday it has reached an agreement with unions representing its ground crew staff to cut 2,500 jobs and freeze pay increases, moving a step closer to approving a crucial restructuring plan. The new agreement, which was reached with five unions representing ground staff, will produce $182 million in savings, the state-run airline said. Alitalia, which initially sought to lay off more than 3,400 ground workers, said it hopes the government will aid dismissed workers. The company has been holding around-the-clock negotiations with unions. Management representatives met with flight attendants Thursday in hopes of reaching a similar agreement with them. The company said when it first presented the plan on Sept. 6 that it wanted to lay off 1,050 flight attendants. The airline has already reached a deal with pilots, who agreed Tuesday to increase their annual flying hours and to have a larger part of their salaries based on how much they work. Alitalia initially said it would lay off 450 pilots, but agreed to cut that to 289, plus 100 taking early retirement. Alitalia has set a Monday deadline for union approval of a restructuring plan, which initially included laying off about one-quarter of the company's 22,000 employees. Union sources told Dow Jones Newswires on Thursday that the final agreement would probably include 3,500 full-time job cuts, rather than some 5,000, as the company had originally planned. "In the history of Alitalia, this is the first time that unions accept proper job cuts," Abaxbank analyst Lucio Cannamela said. "Even if the job cuts are 1,500 less than planned, what matters is that there are layoffs and that a final deal is reached." Union approval of the recovery plan is crucial to the company's survival as it would allow Alitalia to access a $488 million loan approved by the Italian government and the European Union. Alitalia says it has only enough liquidity to pay salaries until the end of this month. The EU Commission welcomed progress in the negotiations. "It is good news for the Commission," Amador Sanchez Rico, spokesman for EU Transport Commissioner Loyola de Palacio, said in Brussels. He said Alitalia still had to notify EU regulators about its restructuring plan, but added that the plan could be reviewed quickly. The government, which owns 62 percent of the airline, is considering giving boosted unemployment benefits to dismissed workers. Still reeling from the massive crisis that hit the airline industry after the Sept. 11, 2001, attacks, Alitalia has been struggling amid competition from discount carriers and consolidation among established players. The company has posted an annual profit only four times in the last 16 years. ---------------------------------------------------------------------- Copyright 2004 AP