Aug 30, 2002 By Matthew Barakat Ap Business Writer 3 min read

ARLINGTON, Va. (AP) – US Airways’ mechanics rejected wage and benefit concessions Thursday, while workers who load luggage and freight accepted them. The air carrier, which has filed for Chapter 11 bankruptcy protection, had sought a combined $219 million in annual savings from its largest union as part of a $1.2 billion cost-cutting plan. The divided vote amounts to a savings of $65 million, according to a union estimate.

“We are extremely disappointed by the vote of our mechanics,” said David Siegel, US Airways president and chief executive. He said the company would seek the concessions through bankruptcy court if it cannot reach a new agreement.

The International Association of Machinists, which represents about 12,000 workers, voted separately on the concessions.

Fleet workers, who load luggage and freight, approved the concessions by a 62 percent margin; mechanics and related workers rejected the proposal by a 57 percent margin.

The union represents 6,800 mechanical workers and 5,400 fleet workers.

They voted over the past several days.

The vote was intended to allow US Airways to gain access to $175 million in financing that is part of a larger $500 million package, according to court records.

The fleet service employees agreed to accept 8 percent wage cuts now, with increases of 2 or 3 percent between 2005 and 2008. They also lose 10 sick days, vacation days and holidays.

The mechanics and related employees rejected wage reductions of 7 percent now, followed by annual increases of 2 percent in 2004-07 and a 5 percent increase in 2008. They also would have lost nine sick days, vacation days and holidays.

Any employee who makes less than $30,000 will be exempt from the wage concessions.

“The changes approved by the fleet service membership will be made to their agreement,” said IAM General Vice President Robert Roach Jr. “Our attorneys are prepared to defend our mechanical and related members and their contract in bankruptcy court.”

US Airways is negotiating with one other union, the Communications Workers of America, on a wage and benefit concession package.

The CWA’s 6,700 passenger service employees are being asked to accept $70 million in annual wage cuts. CWA spokeswoman Candice Johnson said Wednesday that negotiations are ongoing.

The airline has asked a bankruptcy judge to invalidate its contract with the CWA if an agreement can’t be reached. A hearing on that issue is scheduled for Sept. 10.

US Airways, which has had the industry’s highest labor costs, is seeking about $840 million in annual labor cost cuts as part of its plan to restore profitability. The airline lost $2.1 billion in 2001 on revenue of $8.3 billion.

The pilots’ union, flight attendants and Transport Workers Union had already agreed to a combined $552 million in cuts.

Arlington, Va.-based US Airways is the first major airline to file for bankruptcy following the Sept. 11 attacks. It is the nation’s seventh largest carrier.

It cut capacity 23 percent last year after Sept. 11. Earlier this month, it reduced its flight schedule an additional 13 percent, from 1,550 daily departures to 1,350.

Earlier this week, the airline sought to reduce costs by imposing stricter rules on nonrefundable tickets. Such tickets will now lose their value completely if a passenger misses his flight. Previously, a traveler would be given credit for the value of his ticket, minus a $100 fee.

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On the Net:

http://www.usairways.com/

http://www.iam141m.org/

http://www.iam141.org/