------------------------- Via Workers World News Service Reprinted from the Feb. 6, 2003 issue of Workers World newspaper -------------------------
WHAT WORKERS NEED TO KNOW: ECONOMIC CRISIS IN AIRLINES DEEPENS By Michelle Quintus Flight attendant & Local Executive Council officer, Association of Flight Attendants, New York Council 5 The crisis in the airline industry is deep and wide. Its source is the boom and bust cycles of the capitalist system itself. Airline management expanded recklessly during the boom years. Now, as thousands of airplanes are parked, rusting and depreciating in the desert, bankruptcies and massive layoffs plague the industry. This economic crisis is intensified by a number of other contributing factors. These include the U.S. government's policies of endless war and "Homeland Security," which threaten the airlines' very existence. All this has led major airlines to declare Chapter 11 bankruptcy. On Aug. 11, for example, US Airways filed for Chapter 11. By Dec. 9, United Air Lines and its 80,000 workers had been forced to take the same path. A federal agency, the Air Trans portation Stabilization Board, was created to assist the airlines after Sept. 11, 2001. To date, the ATSB has given only one loan guarantee of $1 billion to US Airways. The loan was conditional on a $200 million "modified restructuring plan" that undermined its union contracts. US Airways' "modified restructuring plan" includes a "war contingency." In the event that the United States invades Iraq, there will be an immediate 5 percent pay deferral for up to 18 months. The corporate owners are already trying to protect themselves from their inevitable losses in the event of a war--protect themselves by making the workers pay. "During this last week, almost every large airline has admitted that it has or is looking for bankruptcy lawyers," wrote Flight Attendants union leaders in a Jan. 24 update to members. "Of particular concern to industry experts are American and America West Airlines." INTENSIFIED WAR ON AIRLINE WORKERS "The prospects of a war with Iraq loom large over the industry. In the last Gulf War, there was a sharp drop in international and domestic traffic," the update continued. "Once again, as the war frenzy intensifies and the economic crisis deepens, our members face more layoffs and deeper wage cuts in our wages and benefits." As a result, airline workers have become more involved in the anti-war movement, joining other labor groups with anti-war resolutions. Like other workers, airline workers understand that the war on Iraq is not about protecting us, but about getting more access to the oil resources of the region. The Flight Attendants' United Airlines Master Executive Council recently passed a resolution proclaiming that it "holds strongly the belief that an unprovoked war with Iraq, which causes many casualties amongst members of our armed forces and the Iraqi people, is not in the best interest of our Cabin Crew Members, other airline workers, or the vast majority of other workers of the world." Rank-and-file airline workers were present at historic anti-war demonstrations in Washington and San Francisco on Jan. 18, as part of the U.S. Labor Against the War contingents. BIG BANKS PROFIT While the U.S. government and Pre sident George W. Bush occupy themselves with plans for an imperialist war for oil, the airlines are left to the wolves of the big banks. As each bankrupt corporation enters into Chapter 11 reorganization, it relinquishes its ownership rights. The debtors-in-possession-- financiers, banks and speculators--demand exorbitant interest rates and ownership rights to the airline's property as collateral. This enables debtor-in-possession financiers, in collusion with the bankruptcy court, to control the companies, which desperately need financing to operate during the reorganization process. The financiers then have the power to impose "covenants" on the airlines that specifically target the workers. At UAL, for example, the financiers demanded and got worker wage cuts of $2.4 billion per year from 2003 to 2008--totaling $12 billion in all. The debtor-in-possession financiers' demands aim at unions and the lowest-paid workers, leaving most executives' seven-figure salaries intact. In fact, after extracting big pay cuts from workers, ranging from 8.4 percent to 35 percent, both US Airways and UAL filed for management bonuses in bankruptcy court. Another 704 UAL flight attendants will be laid off as of Feb. 22--after they gave a 9-percent wage concession in January. These pay cuts go directly into the huge profits of J.P Morgan Chase, Citibank, Bank One and CIT--a $60 billion group of speculators that have bankrolled UAL. Many of these same banks face criminal charges in the Enron and WorldCom cases. MISMANAGEMENT, OVERPRODUCTION AND CORPORATE GREED At UAL, executive bonus packages have been termed the "Key Employee Reten tion Program." Most of these "key employees" were responsible for gross mismanagement during the airline's boom years. They bought too many planes, expanded beyond market capacity, attempted mergers costing millions of dollars, and sold off profitable parts of the company to former UAL executives while taking in millions of dollars for themselves. The workers did not share in the wealth of the boom years. Flight attendants endured an unprecedented 10-year contract with wage arbitration that resulted in 0-percent pay increases in some years. Mechanics invested their retirement and took wage cuts to purchase stock at $180 per share. It is now valued at under $2 per share. Many of them are now at retirement age but cannot afford to stop working. AIRLINE RESTRUCTURING THAT WORKS The airline CEOs and debtor-in-possession financiers are right about one thing: The airline industry needs "restructuring"--but not for more profits to CEOs and bankers. The restructuring should be based on returning to airline workers the value they created--returning it in the form of secure jobs, living wages, safe work rules, and ultimately, an air transportation system that is accessible and safe for everyone. At UAL, the workers still own over 50 percent of the company. We have $9 billion in pension assets to validate our rights. We have a union coalition capable of presenting our own restructuring plan that protects workers' jobs, wages and contracts. We have the experience, the skills, and the years of service to run the airline ourselves. We have three union representatives on the creditors' committee of the bankruptcy court. But if this committee is to retain its rightful power under the threats of the financiers, it must be backed up by our 60,000 union members in a show of power and unity with rallies and demonstrations. CLASS UNITY Capitalist competition between airlines is fiercer than ever. Many airlines are using company loyalty to get concessions from the workers so "their" airline will survive. Many workers interested in saving jobs have given in to this pressure. "Our flight attendant leadership again has demonstrated that it is resolute in its commitment to US Airways," said Jerry A. Glass, US Airways senior vice president of employee relations. Airline workers don't yet understand the breadth of our unified power. Our interests are not about one airline surviving this crisis over another airline. The loyalty of airline workers needs to be with each other, not with our corporate exploiters. Airline workers will survive this crisis by asserting our rights as a class. We don't survive by giving more and more from our wages and contracts. We will survive by asserting our right to be paid a living wage, reap the benefits of our own labor and ultimately own the means of production, and by claiming our property rights. We must assert that the airlines do not belong to the banks and the greedy CEOs. The real owners are the thousands of workers who built them. - END - (Copyright Workers World Service: Everyone is permitted to copy and distribute verbatim copies of this document, but changing it is not allowed. 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