AFL-CIO Seeks Panel to Probe Eastern Dispute

Times Labor Writer

The AFL-CIO executive council Monday called on President Bush to appoint a Presidential Emergency Board to investigate the protracted, bitter labor dispute at Eastern Airlines and make recommendations for a settlement.

The appointment of such a board would prolong the deadline for a showdown between Eastern and its 8,500 mechanics and other ground workers for 60 days beyond March 3, when a federally mandated "cooling off period" ends and a strike could begin.

Negotiators for Eastern and the International Assn. of Machinists are scheduled to resume bargaining for a new contract on Wednesday in Washington. The two sides have made little progress in 16 months of talks. Management is demanding severe wage and work rule concessions. The union has agreed to a pay freeze, significant work rule changes and lowered starting rates for new workers, but it has resisted pay cuts.

Charles Bryan, president of the union's big Miami-based Eastern local, said he was not optimistic about a quick resolution. "I've seen no evidence management has any intention of settling," Bryan said. He said he, too, favored the convening of a Presidential Emergency Board but said the union could not count on that happening. A board would be authorized only to make non-binding recommendations.

"We have to assume there will be a strike at one minute after midnight March 3," Bryan said in an interview shortly after AFL-CIO President Lane Kirkland announced the council's action on the first day of its annual winter meeting here. "The AFL-CIO will mobilize its resources to assist the employees at Eastern to the fullest possible extent in the event the Machinists are forced to strike," Kirkland said.

More Financial Pressure

Attempts to secure a comment from the White House or the National Mediation Board, the agency that would recommend to the President that he convene the emergency panel under the Railway Labor Act, were unsuccessful. Eastern spokesman Robin Matell reiterated the company's opposition to creation of the Presidential Emergency Board. "Just the possibility of a PEB becomes a crippling roadblock to the possibility of a negotiated settlement," he said.

"The creation of a PEB would put more financial pressure on the company, and we would have to react accordingly," Matell said, but he would not elaborate. The creation of a PEB would delay the implementation of any possible wage cuts.

A presidential board was last convened in an airline labor dispute by President Lyndon B. Johnson in 1966. Its non-binding recommendations were spurned, and there was a strike of several weeks' duration against five airlines.

Frank Lorenzo, chairman of Texas Air Corp., Eastern's parent company, is perhaps the corporate executive most loathed by American unionists, and he was excoriated by Kirkland on Monday. "After misusing the nation's bankruptcy laws to bust the unions at Continental Airlines (in 1983), Frank Lorenzo has personally presided over the systematic dismantling of Eastern Airlines," Kirkland said, referring to the sale of many of Eastern's key assets, including its computer reservations system and the lucrative New York-Washington shuttle.

Lorenzo "now claims poverty at Eastern," Kirkland said with disdain. Eastern has lost more than $400 million in the last two years, and company officials say their workers must accept lower wages if the company is to remain viable. But Kirkland said Eastern's unionized employees have given up more than $1.5 billion in wages and other concessions during the past decade.

Sold for Bargain Price

For more than a year, the Machinists and their allies have charged that Lorenzo has been involved in an elaborate "corporate shell game" to gradually dismantle Eastern and ultimately transfer its assets and routes to Continental, which operates non-union. Lorenzo has denied the charge.

But financial analysts for the Machinists note that the reservations system was "sold" to Texas Air for $100 million in a 6% convertible note due in the year 2012. Financial analysts have said the reservations system was worth twice that much. An AFL-CIO report issued Monday also said Eastern had provided more than $700 million in financing, fees, loans and deposits to Texas Air in the last two years and $180 million in loans and payments to Continental. Eastern officials have consistently maintained that there was nothing improper about their dealings with Texas Air or Continental.

If there is a strike, picketing and other support activities may well extend beyond Eastern terminals. The Machinists have declared that they will wage a secondary boycott against any other airline that services Eastern planes or does business with the company in any other way. William W. Winpisinger, the Machinists' president, reiterated Monday that the union firmly believes that it could legally engage in a secondary boycott under the Railway Labor Act because of a Supreme Court decision on the issue last year.

This could create havoc for travelers. "Anything going to or from an Eastern plane would be a target, and that includes baggage, cargo or mail," Bryan said.

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