Eastern Posts Bond, Says Layoffs Start Saturday

Associated Press

Eastern Airlines posted a $4.7-million bond with a federal court, clearing the way for the money-losing carrier to lay off 4,000 employees later this week, a company spokeswoman said Sunday.

“The layoffs will be effective Sept. 10 at the end of the employees’ normal shift,” spokeswoman Virginia Sanchez said. “We really don’t know what the exact number of employees will be. Some may take early retirement; there are different options.”

Eastern has lost about $1 billion during the past decade and in July announced plans for the layoffs. The company said it also was cutting service to 14 cities in order to save money.

But the company’s three main unions sued.


U.S. District Judge Barrington Parker ruled in Washington, D.C., last week that Eastern could proceed with the service cuts, but could not lay off union personnel. The U.S. Court of Appeals late Friday dissolved Parker’s order, but said the carrier would have to post the bond in order to cover a month of paychecks should the unions win their case.

The bond was posted with the court late Saturday, Sanchez said.

Miami-based Eastern has been locked in battle with its unions to cut labor costs, which the airline contends are responsible for its losses. Machinists union members are to vote Sept. 15 on a company proposal for $161 million in annual wage concessions.

Eastern union spokesmen were not immediately available for comment Sunday. But Saturday, spokesmen still surprised by the appeals court ruling vowed that they eventually would win their case.


“We strongly believe that the earlier ruling will be upheld,” said Charles Bryan, president of the Miami local of the machinists union.

He also reiterated past contentions that the airline planned the layoffs to hurt its unions rather than to save money. The unions contend that Texas Air Corp., Eastern’s parent company, is stripping the Miami-based carrier’s assets to the favor of sister carrier Continental Airlines.

The layoff plans, the largest such move in Eastern’s 60-year history, include management personnel, about 1,000 flight attendants, 1,000 machinists and 500 pilots.

The company and its flight attendants union Thursday reached a deal under which some workers would take leaves of absence, in which the workers would keep their seniority if called back.