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Judge Lets Airline Toss Contract

Order Delayed Until Machinists Vote on Proposal

By Keith L. Alexander and Amy Joyce
Washington Post Staff Writers
Friday, January 7, 2005; Page E01

A U.S. Bankruptcy Court judge yesterday granted US Airways' request to throw out its machinists' contract as part of the airline's effort to cut costs and emerge from bankruptcy protection.

But Judge Stephen S. Mitchell delayed enforcement of the ruling at least until Jan. 22, when union members are scheduled to vote on US Airways' latest contract proposal. If the union rejects the cost-cutting proposal, the existing contract will be nullified and the airline permitted to replace it with a cheaper one.

US Airways' machinists are the only employee group that has yet to agree to concessions. (Julia Malakie -- AP)

In siding with US Airways, Mitchell said the mechanics were being "asked to cut their own throats" in deciding on voting on a contract that included steep pay, benefit and job cuts. But Mitchell said the mechanics should consider which would be worse: half of them losing their jobs, or all of them losing their jobs should the airline be forced to liquidate.

"Is it fair for these employees who have worked so hard for this airline to have their contract rejected? No, it's not," Mitchell said. "But the question is, will there be any jobs at all at the end of the day?"

In a conciliatory gesture, the machinists union yesterday said it would not disrupt the airline's operations leading up to the vote on the airline's proposal. Leaders of the International Association of Machinists and Aerospace Workers, who had threatened a walkout if the union contract was nullified, agreed to present the airline's latest proposal to the union's 8,450 members for a vote. Details of the proposal were being finalized yesterday.

For its part, US Airways said it would await the vote before seeking further action on the current contract.

The union, which represents the airline's mechanics, baggage handlers and fleet service workers, is expected to vote not only on the airline's proposal but also on whether to authorize a strike should the majority of members oppose the new contract.

Also yesterday, Mitchell ruled that the Arlington-based airline could terminate the defined-benefit pension plans of its flight attendants, machinists and nonunion workers.

"The final proposal and strike authorization is in the hands of the employees," said Joseph Tiberi, machinists union spokesman.

The machinists union is the only employee group that has not agreed on a new cost-savings plan. The union has adamantly opposed the airline's demand for more than $225 million in concessions, which amounts to a cut in pay and benefits of up to 23 percent. The airline has also sought to outsource heavy maintenance work to outside facilities, a move that would result in the elimination of about 2,000 of its 4,000 mechanics jobs.

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