The International Association of Machinists, in an effort to make it harder for Eastern Airlines to operate in the event of a strike, yesterday asked the federal government to declare Eastern and Continental airlines a single company for bargaining purposes.
The tactic, if successful, would open the door for Continental to be reorganized by its former unions. The major airline unions lost their representation rights at Continental in 1983 after Texas Air Corp. broke off negotiations and filed for reorganization under Chapter 11 of the federal bankruptcy code.
It could also head off the possibility that Texas Air, in the event of a strike at Eastern, would file for bankruptcy protection at Eastern, shutting it down and transferring its assets and operations to Continental.
In the meantime, Eastern has contracted with a cargo carrier to provide flight crews if Eastern pilots honor a strike by the IAM. Eastern and the IAM are currently in mediation with the National Mediation Board.
The machinists yesterday petitioned the mediation board to rule that Eastern and Continental are one "megaline" run by Texas Air Corp. and its chairman, Frank Lorenzo. As evidence, the IAM noted that Eastern pays Texas Air $500,000 a month to manage the company.
If the government rules that the two airlines are a single carrier, the IAM should be certified as the bargaining representative for workers at both airlines. The IAM currently represents about 12,000 skilled mechanics, baggage handlers and other workers at Eastern.
The IAM said the board had ruled in all other mergers since airline deregulation began that the merged carriers were a single entity for bargaining purposes.
Texas Air vice president Clark Onstad called the petition "simply a negotiating ploy" and said that the two carriers have not been merged. "We are quite confident that it will be found that Eastern and Continental are separate companies with separate managements that follow separate management strategies."
Eastern, which is seeking $490 million in labor concessions from all its unions, has proposed cutting IAM labor costs by what amounts to pitting the union's skilled workers against its unskilled members. The airline has proposed large pay cuts for unskilled workers such as baggage handlers over the next three years, and has offered to train these workers for higher skilled jobs. Eastern President Phil Bakes has said the company has to "fix our labor cost problem" if Eastern is to survive.
Lorenzo, who created New York Air (now part of Continental) as a nonunion airline and who then transformed Continental into a nonunion carrier, has redefined labor relations in the airline industry, forcing other airlines to reduce labor costs to remain competitive.
Charles Bryan, who heads the IAM unit at Eastern, said the union decided to petition the government after a great deal of study. "We've been evaluating this for a very long time," he said. Bryan said Eastern and Continental currently share sales and marketing functions as well as airplanes and bonus programs.
The Air Line Pilots Association, which represents Eastern pilots, has filed suit against the airline, charging the company with transferring valuable Eastern assets to Continental and other low cost, nonunion subsidiaries to the detriment of Eastern stockholders.
The union, under a concessions agreement worked out with Eastern in its last contract negotiations, holds a large block of Eastern's preferred stock.
ALPA has been working to organize pilots at Continental and says it has enough cards signed by Continental workers to call for a union representation election.
The pilots had considered filing for single carrier status, too, but decided not to pursue the tactic, said spokesman Ron Cole.
According to an article in a recent American Bar Association journal by John J. Gallagher, who represents Eastern on labor matters, declaration of single carrier status requires that four standards be met. They are that the carriers have common ownership, common management, common control of labor relations and interrelated operations.