USAir Rejects Investment Proposal From Pilots : Labor: Union offered wage concessions for part ownership. The company signals it will still talk.

From Associated Press

USAir rejected its pilots union’s offer of wage concessions in return for part ownership. But the financially ailing airline suggested Friday that it is willing to continue talks.

“While some aspects of . . . (the Air Line Pilots Assn.) proposal offer hopeful prospects for future negotiations, a number of provisions are unacceptable,” the airline said in a statement from its Arlington, Va., headquarters.

ALPA, which represents 5,200 USAir pilots, offered Wednesday to swap $750 million in wage concessions in return for partial employee ownership of the airline.

USAir described the savings as illusory because they included future salary and longevity increases.


“The net result is that actual savings fall far short of what is needed, even before considering the financial benefits the pilots are seeking in return,” it said.

The company said any concessions must be based on April, 1994, levels if the airline is to remain “a viable competitor.”

The ALPA proposal, which also called for $1.75 billion in concessions from other USAir unions, was rejected Thursday by the Assn. of Flight Attendants. Other USAir employees are represented by the International Assn. of Machinists and the Transport Workers Union.

ALPA said its members make up 12% of the USAir work force and would shoulder 30% of the labor cost reductions.


USAir also said it rejected ALPA’s proposal of equal-percentage reductions in salaries for all employees regardless of income level, which it said “would cause lower-paid employees to subsidize higher-paid employees.”

ALPA said its proposed concessions represent about 20% of the pilots’ average $100,000-a-year salaries.

The USAir statement also said the ALPA proposal “would largely disenfranchise USAir Group’s common shareholders, who have already experienced a market loss in the value of their ownership.”

“Additionally, under ALPA’s proposal, the public common shareholders would have no voice in the selection of director nominees and little voting influence in the election of directors,” it added.


In announcing the proposal, Peter Gauthier, head of ALPA’s executive council for USAir pilots, said, “This is an offer to invest and not an offer to buy.”

But in its statement Friday, USAir contended that “in return for a minority investment, ALPA is seeking not only effective control over the governance of the company, but also dominant influence in the running of the business.”