Air Transport World

Managements move to reduce the bite of labor costs. (airline industry)

It was to be expected that when deregulation changed the rules of the game there would be a reshufiling of the players at the U.S. air transport industry table, and of course this has happened. There is a whole new look to the industry's labor relations.

Managements have been able to extract concessions from the unions that would have been considered unthinkable a few years ago. At the same time they have granted concessions that would have been considered eqully unthinkable. And where one side or the other has been unwilling to budge, some managements have unilaterally taken drastic steps that they claim were necessary for survival or growth but which labor people generally see as attempts at union-busting.

Robert J. Joedicke, veteran Wall Street observer of the airline industry, has been warning the established airlines that they would have to get their costs under control if they were to survive in the new environment of decontrolled routes and fares, made even stormier by the entry of new, low-cost, non-union airlines. He urged labor and management to replace their tradiionally adversarial positions with a cooperative approach aimed at saving the airlines and, consequently, labor's jobs. Sugar coating

To most unions this called-for cooperation seemed one-sided: Management would give up nothing but labor would have to moderate its demands for wage increases or, in fact, take cuts and freezes in wages and benefits and make concessions relating to working conditions. Although the logic for taking the medicine was there unions didn't like the bitter taste. However, wholesale layoffs and bankruptcies or the threat of bankruptcy have proven powerful persuaders. Some sugar coating has made the taste more palatable. Unions have held their nose and taken the medicine. And where they haven't, some managements have executed end runs--like starting up new, non-union affiliates.

Probably most acceptabel to labor of all the deals that have been swung in recent months is the two-tier wage arrangement at American Airlines. In return for maintaining the wage scales and guaranteeing the jobs of present employes, the unions have agreed to substantially lower stating pay for new hires--up to about 50% in some categories--and will permit some cross-utilization and the use of part-timers at some stations. …

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