As more airlines file for bankruptcy
Workers have to fight companies and courts
By Milt Neidenberg
On Sept. 12, for the second time in two years, US Airways,
the seventh-largest U.S. airline, filed for Chapter 11
bankruptcy. Responding to the refusal of the airline unions to
allow cuts of $800 million per year, they asked permission to
default on a $110-million pension payment due a few days
later.
In August 2002, the company had sought the protection of the
bankruptcy court in the Eastern District of Virginia to force
the airline unions to give them more than $1 billion in wage
concessions.
US Airways' collusion with the bankruptcy court to force
huge cuts in wages and benefits, primarily pensions and health
care, is a critical issue facing the entire labor movement.
When United Airlines, the second-largest in the U.S., filed for
Chapter 11 bankruptcy in December 2002, it forced the union to
give back billions of dollars that had been guaranteed by
then-existing management-union contracts.
The bankruptcy court is a tool of corporations--in
widespread use--to break existing contracts and lower their
labor costs. Steel companies that went into bankruptcy had a
field day as they defaulted on pension and health-care
liability. This anti-union weapon has been used by many other
corporations to get concessions.
The labor movement needs to recognize that a company in
Chapter 11 bankruptcy does not legally own its assets. It is a
"debtor in possession" that seeks the protection of the court
to abrogate its debt and force concessions on the unions and
workers, allowing management to reorganize the company. They
cannot issue one check without the approval of a
court-appointed trustee.
The combined power of the labor movement could fight to
force the bankruptcy courts to recognize that the unions are
the principal creditors, based on the accumulation of accrued
benefits--pensions, severance, health care, back wages, and so
on. Plus, it is the value of the workers' labor power that
keeps the corporation running.
The workers must mobilize to exercise their rights to be the
trustees of the bankrupt company in order to defend their
contracts and, as trustees, to seek remedies from deep-pocket
sources such as banks and other lenders. Otherwise the unions
find themselves between a rock and a hard place.
The following report to Workers World newspaper from David
Dixon in Char lotte, N.C., shows the difficult situation in
which U.S. Airways pilots find themselves right now:
Pilots angry at cuts
By David Dixon
Charlotte, N.C.
On Oct. 1, US Airways and the pilots' union, Air Line Pilots
Association, reached a tentative agreement that would slash
salaries 18 percent, instead of the 23 percent asked for in
bankruptcy court last week. However, union leaders were divi
ded late in the day on sending the agreement to their 3,200
members for a vote.
At the meeting in Charlotte between the company and union
officials, angry pilots showed their anger towards union
acceptance of the cuts. "'You're taking down our f------ jobs,
you loser!' one pilot told union rep Von Bargen. Mike Castlen,
a 737 captain from Charlotte, said he'd vote against the
proposal. 'That's my hard-earned money that I worked 20-some
years for,' he said." (Charlotte Observer, Oct. 2)
Union negotiators met again the next day with the union's
management council and about 80 pilots, but remained undecided
on whether to recommend that members accept the deal. Another
meeting is planned for Oct. 5.
If these cuts are agreed to, it will put more pressure on
the other unions representing flight attendants, ticket agents
and mechanics to accept concessions. Leaders of these major
unions say the pilots' deal will not deter their demands to
keep their pay. Also at stake are the workers' retirement
benefits.
Three locals within the Transport Workers Union have reached
accords with the bosses accepting pay cuts.
A court date is set for Oct. 7, when US Airways will ask for
23-percent pay cuts if consensual agreements with the other
unions have not been reached by then.
Reprinted from the Oct. 14, 2004, issue of
Workers World newspaper
This article is copyright under a Creative
Commons License.
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