January 2003 • Vol 3, No. 1 •

The high end of the U.S. airline industry is in a tailspin, while its workers’ hopes for the future are caught in the downdraft. The industry’s 1980s deregulation spawned low-cost competition, much like the deregulation of the trucking industry that continues to bankrupt major freight carriers. That competition is compelling major airlines to reduce labor costs one way or another, or throw in the towel. Two of the major airlines, United Airlines and US Airways, are now in the bankruptcy courts, another weapon to drive down their workers’ living standards. To date, US Airways has cut its workforce by a third, to 32,000, and has won hundreds of millions in union-negotiated wage concessions. United Airlines is following a similar plan, seeking similar results.

Memories of the shutdown of Eastern Airlines and Trans World Airlines constantly remind the workers that what happened to those union workers could happen to them. That fear just eases the way for corporate and union snake-oil hucksters to peddle one concessionary scheme after another. In 1994, United’s unions sold their members on the notion that they should become stockholders, with representatives on the airline’s board of directors, in return for wage cuts to last until 2000. This was a variation on the scheme that Eastern Airlines had used, giving the unions some stock and a seat at the boardroom table. Those unions found that the corporate bosses held “rump” board meetings without the union representatives. The union reps on Eastern’s board were told that what information they did learn at the board meetings was confidential and could not be shared with their memberships. Then the Machinists Union was blocked, when it tried to vote its stock holdings in order to prevent Eastern Airlines from being taken over by the non-union rival that closed it down.

In 1994, United’s unionized workers, excepting the flight attendants took wage cuts that saved the firm nearly $5 billion dollars in exchange for about 55 percent of United’s stock and three seats on the company’s board of directors. The 1994 scam differed from Eastern’s in that the union workers themselves (not the union) held the airline’s stock, which they had to hold until they left the company.

But that difference hasn’t dulled the economic pain that United’s workforce now is suffering, and the increased pain that lies ahead. The stock that once was above $70 is now virtually worthless, destroying many workers retirement dreams. A few weeks ago, the airline’s unions, excepting the Machinists ranks, which handed their officials a defeat, agreed to give up one billion dollars a year in concessions in order for United to gain federal loan guarantees. However, United Airlines knew at the time that shortly it would be asking the union workers for still deeper cuts. United’s chief executive, Glenn Tilton, has now revealed that the plan submitted to the feds “was designed to stabilize the company. However, we knew there was more to do going forward. What we are seeking now is to transform the company for the long term and to make that transformation sustainable.”

United did not get the federal guarantees, which were opposed by Continental, Northwest and American Airlines. So now the airline is asking the unions to more than double their concessions to $2.4 billion a year, in order, this time, to qualify for lenders’ financing demands. Moreover, United has stated that it is seeking a liberalization of work rules, meaning that the workforce, already reduced by 17,000, will continue to shrink. If the unions don’t meet United’s new demands, the company says it will ask the bankruptcy court to unilaterally modify or even tear up the existing union contracts.

For all practical purposes, United now has its hands in the workers wallets, and the sky’s the limit on its demands for concessions. While there’s no evidence of a rank-and-file organized opposition to the corporate plundering, some mechanics are looking to the Aircraft Mechanics Fraternal Assn. (AMFA). That union came close to beating out the Machinists Union in a 2001 representation election. Still, it’s not clear how much of a difference a change of unions would make, unless the AMFA commits itself to mobilizing the ranks for the type of fight that led to the rebirth of organized labor more than 60 years ago. Clearly, organized labor once again needs to see itself as a fighting machine, or resign itself to withering away.