Airline deregulation redux

jonathan flanders jon_flanders at compuserve.com
Fri Feb 22 08:12:47 MST 2002


<<The only way to resolve the crisis is to attack variable capital (wages).
Which adds up to serious trade union struggles in the coming period, if you
ask me.>>


Someone forwarded to me the commentary below a few days ago. Since that
date, the IAM and the UAL went back into negotiations after the membership
voted down the UAL proposal two to one. Now a tentative agreement has been
reached and there will be another vote.

Given the airlines financial picture, it is indeed very hard to see how
conflict between workers and management will be avoided. A liquidation of a
carrier like United can't be ruled out, something the writer below says the
workers have already reckoned with.

Jon Flanders

Into Thin Air

  February 17, 2002

  By ROGER LOWENSTEIN

http://www.nytimes.com/2002/02/17/magazine/17AIRLINES.html?ex=1014963825&ei
=1&en=ed4eb968a8693001

comment on the above article
by Len Wilson
IAM LL 1886

The article, while mostly about the pilots, appears to be accurate enough
and I'd recommend it to anyone who wants a better understanding of the
airline
industry's problems.

Nearly everything written about the labor situation at UAL attempts to
paint the workers as a bunch of greedy ingrates, using terms like "whopping
37%" (proposed mechanic raise) and "Alice in Wonderland" (describing our
world view).

Anyone setting out to write an article about our situation should be made
aware of several important points before proceeding:

* WE, the employees, own 55% of the company. Our stock is of the
"non-voting"
   kind but we are the REAL OWNERS. Please don't forget it.

* IAM-represented employees are working for 1994 level wages. EVEN WITH A
   WHOPPING 37% RAISE, we would be making less, in real dollars, than we
were
   in 1994.

* WE, the employees who were forced to participate in the ESOP to keep our
   jobs, entered into an agreement in 1994 to accept part of our pay in UAL
   stock. This stock didn't carry voting rights and WE COULDN'T SELL IT.
The
   only way we can gain control of it is to quit our jobs. It's like a
 retirement
   plan.

   The stock price started to seriously drop coincidental with several
   horrendously stupid (deliberate?) business decisions by CEO James
   Goodwin and his crew. The stock price slid from around $100 to its
   current level of $11-12.

   THE REALLY BIG STORY HERE WHICH IS NOT BEING REPORTED, is that many
   thousands of United Airlines employees have been ENRON-ized!
   The average mechanic who had UAL stock worth around $80,000 saw his
   retirement kitty shrink to less than $10,000 while he watched
helplessly,
   unable to get out.

Barring something unexpected, IAM mechanics' negotiators will reach a
tentative agreement with UAL in the next couple of days (deadline is
12:01 Wednesday). If we strike, our picket lines will be honored by pilots,
agents, rampers and others. Management is not going to try to keep going
and is starting a shutdown sequence that will have all flights cancelled
by Wednesday. It will probably mean the end of United Airlines but we are
ready to pull the plug on our company.

~~~~~~~
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