WTC Freight Workers Sent Packing After Parent Firm Shuts Down Its Operations
Victoria A. Miller spent Monday morning on the phone, looking for a job. She worried about how to update her resume and about a job interview she had lined up for 2 p.m.
But unlike many April job-seekers, Miller is not a graduating senior from high school or college. She worked more than nine years as a consumer service representative at Los Angeles International Airport for WTC Air Freight. And like more than 100 other WTC employees at the airport, she lost her job last weekend.
“For the first time in 10 years I don’t have a job, and I’ve been working for even longer than that. I’m 43 years old and all of a sudden I don’t have a place to go,” said Miller, who was also a shop steward for Teamsters Local 986.
The corporate parent of Newport Beach-based WTC Air Freight shut down the air freight firm Sunday and merged its operations with another subsidiary, laying off 127 union workers at Los Angeles International Airport and close to 100 more in San Francisco, Chicago, Miami and Boston.
Pittston Co. merged heavily unionized WTC with mostly non-unionized Burlington Air Express of Irvine in a move to cut costs and improve competitiveness, said Thomas F. Murrill, Burlington’s senior vice president and general counsel.
By combining and consolidating the offices, equipment and staffs of both companies, Burlington seeks “to provide the best service and make a healthy profit at it,” Murrill said, while declining to estimate savings from the merger. Excess office space and equipment will be subleased, he said.
Murrill would not confirm the union’s figure for the number of layoffs. “We’re not keeping tabs. We’re not keeping a score card. . . . I haven’t had time to talk about numbers like that.”
Pittston bought WTC last July and transferred its operating control to Burlington. Headquartered in Greenwich, Conn., Pittston is one of the nation’s largest coal mining firms.
The mood was somber on Friday at WTC offices in Los Angeles International Airport, said Victoria A. Miller, a WTC customer service representative at Los Angeles International Airport and a shop steward for Teamsters local 986. “Most of these people have worked here 15 or 20 years. It’s like family. . . . Everybody here is devastated.”
Some of the Los Angeles workers will receive jobs at Burlington and the rest will get two to 12 weeks of severance pay. In exchange, workers have agreed not to strike or stage a work slowdown during the next six months, under the terms of a deal offered by Burlington in mid-March, Miller said. “It was either accept or we close down on March 31 and you have nothing.”
Burlington offered 14 full-time jobs and 17 part-time positions--at lower pay and with loss of seniority--to the 127 unionized WTC employees at Los Angeles International Airport, Miller said.
Murrill declined to comment on the number of former WTC union workers hired by Burlington, but said the merger should not be viewed as union-busting because some non-unionized Burlington workers also lost their jobs. He would not say how many Burlington workers or in what cities they lost jobs. Miller said she knew of no Burlington layoffs in Los Angeles but said there may have been some elsewhere.
WTC workers in San Francisco were surprised by the layoffs, said foreman Donald Aiuto, a shop steward for Teamsters Local 85. “We never heard a word out of Burlington. Nobody said a word about losing our jobs until a week ago,” when Burlington told a contract negotiating team that all 34 workers would lose their jobs, he said. The union’s contract expired March 31.
Told of Plan in January
“They throw us out in the street at (age) 55, 56, 54, 53, when it’s hard to get a job,” he said bitterly, noting that he had just celebrated his 55th birthday.
The move was ironic, Aiuto claimed, because WTC made a small profit in the last two years while Burlington lost $19 million last year and has lost $15 million so far this year.
Murrill, who declined to confirm or deny Aiuto’s figures, said the company announced on Jan. 11 that it would merge WTC and Burlington. The two companies together lost $19.1 million on sales of $598.4 million last year, he said, declining to break down the figures by company. The financial woes of WTC and Burlington mirror the fierce competition and cost-cutting that has broken out across the air freight industry.
Burlington’s move to shut down WTC makes financial sense because ferocious price-cutting is forcing all air freight companies to try to cut costs, said Theodore R. Scherck, president of Colography Group, an air freight consulting firm in Marietta, Ga. “They have to get their unit costs, their price per shipment, their price per pound down to where they can make money at prevailing rates.”
Wages account for a quarter to a third of the air freight industry’s costs, Scherck said, and are an obvious place to cut back. “Obviously from management’s viewpoint, you’d prefer that the higher-priced people go,” and unionized workers typically are paid more than non-unionized workers, he said.
At the airport in Los Angeles, customer service representatives, cargo handlers and cargo agents made $15.38 to $15.83 an hour at WTC and $8 to $13 an hour at Burlington, Miller said.
Air freight movements soared 22% in February from a year before because of rising exports, said Paul J. Hyman, director of cargo services for the Washington-based Air Transport Assn. of America. But growth in the market has not yet helped the profitability of air freight companies because of the cut-throat competition they face from commercial airlines, which have become increasingly aggressive about selling cargo space in the bellies of their passenger planes, he said.
Aboard the cargo planes of air freight companies such as Burlington, “There are no passengers upstairs to help pay the cost of the pilots and the fuel. . . . You have to have very sharp pencils for pricing or your customers will go elsewhere,” Hyman said.
As a result, air freight firms are seeking to pare costs by flying their planes more frequently, cutting staffs and simplifying job classifications, he said. “The difference between traffic and profit is management, operating efficiency and how much you can squeeze down your operating costs,” he said.
