More Union Talks Due : Shareholders of PSA Approve Sale to USAir Group
Shareholders of Pacific Southwest Airlines and PS Group, its parent corporation, on Tuesday overwhelmingly approved the sale of San Diego-based PSA to USAir Group for $400 million.
PS Group, which owns 83% of PSA’s outstanding shares, will realize a $279-million gain when the deal is concluded, and PSA employees, who own 8% of the airline’s stock, will receive $65 million. Employees have been receiving stock held in an employee trust since 1984 in return for agreeing to wage reductions and work-rule changes.
In two separate meetings held at PSA’s Lindbergh Field headquarters, 67% of PS Group’s shareholders and 91% of PSA’s shareholders voted to approve the sale. PSA, which began passenger service here in 1949, has 5,400 employees, of whom 2,000 are based in San Diego.
But a major hurdle to the merger remains. Before the deal can be completed, PSA management must negotiate contract modifications with the Teamsters Union, which represents 3,000 PSA flight attendants, ground personnel, station agents and mechanics.
USAir has conditioned its acquisition upon PSA management’s winning labor contract changes from all its union members. The amendments sought by USAir are related to income guarantees and union representational rights due employees in the event of a merger or acquisition.
Pilots Agree to Modifications
PSA’s 600 pilots and two smaller unions have already agreed to modify their contracts. Federal regulators approved the merger earlier this month.
Negotiations between PSA and the Teamsters continued on Tuesday in Washington, and both company and union officials were optimistic that a settlement would be reached in the near future. Last week, a federal judge in San Francisco ruled against a Teamsters request to force PSA into binding arbitration over the contract modifications.
Despite the Teamsters leadership’s push to retain much of the language contained in the 1985 contract, the 3,000 Teamster rank-and-file members voted 96% in favor of the airline sale. The Air Line Pilots Assn.’s 600 members voted unanimously to sell the airline.
Mixed in with the shareholders’ meetings on Tuesday was a poignant reminder of ill-fated PSA Flight 182, which, on Sept. 25, 1978, collided in midair with a private plane over North Park, killing all 144 on board, including 37 crew members.
Joan Wahne, the widow of flight engineer Martin Wahne, a crash victim, asked PSA board members to ensure that USAir retains a plaque honoring the dead crew members. The plaque is displayed near the front entrance to PSA’s corporate headquarters at Lindbergh Field.
Passes to Be Honored
PSA officers assured Wahne that USAir will honor lifetime passes that Wahne and other surviving relatives received from the late William Shemp, PSA’s longtime chairman.
“We paid the ultimate price,” said Wahne, who said she represented several widows of the flight crew.
PS Group, which plans to continue in business after PSA, its major asset, is sold to USAir Group, “has not started to concentrate on the future because this deal is not yet done,” PS Group Chairman J.P. Guerin said Tuesday.
All but $80 million of the $279 million that PS Group would receive for its 83% ownership stake in PSA will be used to pay off existing debt and merger-related costs, according Guerin.
USAir hopes to eventually blend PSA into an airline that will probably include Charlotte, N.C.-based Piedmont Aviation. Last week, USAir agreed to acquire Piedmont for $1.59 billion.
