Eastern Airlines Extends Wage Cuts; Union Irked

Eastern Airlines Chairman Frank Borman told employees Monday that he is extending the airline’s yearlong wage give-back plan because Eastern cannot afford the $22 million a month it would cost to reinstate salaries.

The plan was to expire at midnight Monday, but Borman said in a company-wide letter that the pay cuts, ranging from 18% to 22%, negotiated with Eastern’s 37,000 employees in December, 1983, will be continued until a new agreement is reached.

Charles Bryan, the head of Eastern’s largest union, the International Assn. of Machinists, promptly accused Borman of betraying airline employees.

Poor Earnings

“Everyone at Eastern Airlines feels totally betrayed by this letter,” Bryan told a news conference. “The company is in a better financial position than they have been in years. I could never trust Borman again from this point forward.”

Eastern made a profit in the third quarter but lost $41 million in the first 11 months of 1984. It hasn’t made an annual profit since 1979.

“Until the negotiation process is exhausted and a new wage and productivity plan is in place, wages and salaries established for all employees will remain at the level set by the 1984 Wage Investment Program,” Borman said.

“Adding 18% to 22% to our payroll costs would increase monthly operating costs by $22 million,” he said.

Had Heard Rumors

One Machinists Union member said Borman’s announcement was “like pouring acid on everything we’ve done.”

“There have been rumors that the company would unilaterally continue to take this money out of the paychecks. Needless to say, if that happened, all hell would break loose. I cannot believe they would be stupid enough to do something like that,” said the union member, who asked not to be identified.

Eastern has been negotiating for about a month with employees to extend the wage concessions which resulted in a transfer of 25% of Eastern’s common stock to employees during 1984.

The company also has been negotiating with the machinists for a new contract. Theirs expired Dec. 31.