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Difficulties continue at Eastern.

Difficulties continue at Eastern

Eastern Air Lines, long beset by financial difficulties and an acrimonious relationship with its unions, experienced heightened problems that threatened its existence as an operating entity. On March 4, 8,500 members of the Machinists union walked out after rejecting company demands for wage cuts and changes in work rules that had been the focus of 17 months of negotiations. Eastern's plan to maintain a substantial part of its flight schedule was dashed when only a small number of the 3,500 cockpit crew members, represented by the Air Line Pilots, crossed Machinists' picked lines. Similar support for the stoppage came from 6,000 flight attendants, represented by Transport Workers. The abbreviated flight schedule and the resulting increase in corporate financial losses led to the layoff of 10,000 nonunion employees, leaving only about 1,500 workers on the job.

A few days after the walkout began, Eastern filed for protection from creditors under Chapter 11 of the Federal Bankruptcy Code. Despite Eastern's initial assurances that it would continue operating, groups of investors, some joined by the unions, began making purchase offers, particularly after entrepreneur Donald Trump indicated he might terminate a commitment he made in 1987 to purchase Eastern's shuttle operations. The strike had lowered the value of the shuttle operations from $365 million to less than $250 million.

This latest controversy at Eastern began in 1986, when members of the Air Line Pilots and Transport Workers agreed to wage cuts of more than 20 percent. Since then, Eastern has been pressing the Machinists to accept comparable contract changes. Eastern's last proposal to the Machinists before the work stoppage began was for lowering hourly wage rates to $16 (from $18.83) for mechanics and to $11 54 (from $15.60) for ramp service employees, and for cost-reducing changes in work rules.
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Title Annotation:Developments in Industrial Relations
Author:Ruben, George
Publication:Monthly Labor Review
Article Type:column
Date:Jun 1, 1989
Previous Article:Adjusted Japanese unemployment rate remains below 3 percent in 1987-88.
Next Article:Program opens jobs to longshore workers.

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