Pan Am Unions Tell About Talks With Goldsmith : Say They’ve Discussed Restructuring Possibilities With Other Parties Too
The coalition of labor unions representing most Pan American World Airways workers said Friday it has held preliminary discussions with financier Sir James Goldsmith about a possible restructuring of the airline’s parent firm.
In an announcement marking the latest development in Pan Am Corp.’s often-bitter relations with its unions, the company’s Joint Labor Coalition said it is also talking with other, unidentified parties about restructuring alternatives.
The coalition said its “discussions with Sir James have been very preliminary, that agreement with Sir James on a restructuring plan has not been reached, and that the coalition is pursuing other possible alternatives and talking with other interested parties.”
Margaret Brennan, chairman of the coalition, said she did not know whether Goldsmith was buying Pan Am stock and she declined to say whether Goldsmith had been approached by the unions.
Out of the Country
Pamela Hanlon, a spokeswoman for Pan Am, said: “We are aware of the contact between the labor coalition and Sir James Goldsmith, but beyond that we have no comment.”
The Anglo-French financier was out of the country Friday and not available for comment, according to Ruth Ann Waite, New York office manager at Generale Occidentale, a diversified company of which Goldsmith is chairman.
Pan Am stock rose by 37.5 cents to $5.375 a share in trading after the announcement.
Earlier this year, Pan Am rejected a proposal by the Joint Labor Coalition--representing pilots, flight attendants, flight engineers and Teamsters--for a financial restructuring that the unions said would save the company $600 million a year while giving them a one-third equity stake.
Asset Reduction
Several weeks ago, the coalition retained the investment banking firm of Drexel Burnham Lambert and the law firm of Skadden, Arps, Slate, Meagher & Flom to help in preparing a second restructuring plan and pursuing other alternatives.
Goldsmith recently sold most of his holdings in Generale Occidentale for an estimated $243 million as part of a broad program of reducing his assets and increasing his liquidity.
Last fall, Goldsmith acquired an 11.5% stake in Goodyear Tire & Rubber and announced that he was interested in a takeover of the world’s largest tire maker. Goldsmith also indicated that if he gained control he would consider selling off the company’s non-tire operations in order to increase shareholder value.
The move prompted an extensive restructuring by Goodyear, which bought Goldsmith’s stake at a price that gave him an $87.5-million pretax profit. Goodyear moved to sell off its oil and gas unit, its aerospace division and its wheel-making unit.
Pan Am has been struggling financially in recent years and was especially hard hit when trans-Atlantic travel slumped last year in the wake of concerns among tourists over terrorism and the Chernobyl nuclear accident in the Soviet Union.
Pan Am said Tuesday that a rebound this year in European travel helped it post a $10.5-million second-quarter profit, compared with a $152.4-million second-quarter loss a year ago. The company’s operating revenue jumped 33.6% to $899.9 million from $673.5 million in the year-earlier period.
