NEW YORK, DEC. 10 -- Pan American World Airways union officials are to meet Friday with representatives of Braniff Inc. to begin talks on the massive concessions by labor that Braniff says are needed to complete the merger of the two airlines.
Pan Am Corp. tentatively agreed late Wednesday to spin off its main airline business and merge it with Dallas-based Braniff if Braniff can get pledges of $200 million worth of wage and work rules concessions from the unions for each of the next four years. Pan Am has said it has been unable to get such concessions.
The transaction, negotiated by Chicago financier Jay Pritzker, who owns 97 percent of Braniff, provides for Pan Am employes to own between 13 percent and 20 percent of the merged company.
Margaret Brennan, chairman of the Joint Labor Coalition, which consists of four of Pan American's five major unions, said in a telephone interview today that the first meeting with Braniff officials will take place Friday.
Under terms of the agreement reached Wednesday night, the deal with the unions must be struck by Dec. 22 and ratified by the unions by Jan. 19.
"Under the right circumstances," said one union confidant who declined to be identified by name, "the unions would absolutely be willing to give these concessions."
Saying that "it all depends on what the choices are," he added that to gain the concessions from the unions, the merged airlines would need new "quality management and a major infusion of capital." He said more capital would be needed than the $50 million loan to Pan Am by Braniff that is part of Wednesday night's agreement.
The union coalition has said that it would be willing to make concessions totaling $180 million a year but that has not been sufficient for Pan Am.
Tom Lambert, president of Pan Am's Flight Engineers International Association, said today that his union has already made its share of the required concessions to the airline, including a 16 percent pay cut, reduced vacations and modified work rules.
He added that such concessions would be given to any new management.
The pilots union, a part of the coalition, agreed earlier to make $55 million in concessions but made the continued independence of the airline a condition of the offer.
"The pilots could be the stumbling block," said Louis Marckesano, airline analyst with the Philadelphia-based brokerage of Janney, Montgomery Scott. "The pilots may not want to see the company broken up and may not give concessions" to Braniff.