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Pan Am accords.

Pan Am accords

In talks involving four unions, Pan American Airways won some contract changes designed to reverse its unprofitable operation. The company has lost more than $750 million since 1980, which it attributed primarily to the growth of lower cost foreign and domestic competitors as a result of the deregulation of the industry.

The first settlement involved 1,500 members of the Air Line Pilots Association. The 32-month agreement, running to August 31, 1987, provided for payment of the scheduled 26-percent pay increase the pilots had forgone in 1982 to aid Pan Am. This will be accomplished in stages, over the term.

Later, 6,000 members of the Transport Workers Union struck after rejecting a Pan Am offer that included a 20-percent pay increase over 3 years, including the 14.5-percent in scheduled wage increases that had been deferred from 1982. The stoppage lost some effect when the pilots immediately crossed the picket lines and continued flying. Afterward, the 800-member Flight Engineers International Association returned to work, leaving only the 6,000-member International Association of Flight Attendants and 6,200-member Teamsters units off the job in support of the Transport Workers. However, an increasing number of the flight attendants returned to work after Pan Am began hiring replacements for the attendants and fired 157 of them for refusing to resume work. This led the leaders of the flight attendants' union to order all the attendants to return to work, and a few days later, the Transport Workers agreed on a contract.

A factor in the union's decision to settle was the dwindling support from the other unions. Another factor was concern over the possibility of permanent cuts in employment. Early in the strike, Pan Am had sold commissary operations in several cities, ending employment for 700 members of the Transport Workers union. Chief union negotiator John Kerrigan said, "The issue is whether continuation of the strike is in the interest of our members. We believe it is not.' He explained that a prolonged strike would inflict "heavy losses' to both sides and could result in the "total destruction of both.'

The accord provided for:

Wage increases of 5 percent on January 1 and November 1 of 1985 and in November of 1986 and 1987. The 20-percent total increase included the 1982 deferred amount of 14.5 percent, which the union had contended should have been restored in total on January 1, 1985.

One-time bonuses of $1,000 for mechanics, dispatchers, and flight simulators and $600 for other workers, payable in November 1985.

A new pay progression schedule requiring new workers to serve for 7 years before attaining the maximum rate for their grade. Previously, they waited 3 or 4 years.

Broadening of job assignments to permit greater utilization of employee skills.

Adoption of a new pension plan financed by company payments equal to 3.5 percent of employee earnings plus company stock equal to 2 percent of the earnings. Addition of $5,000 or $10,000 bonuses to induce employees to retire early.

New jobs, as they open, for the 700 former commissary workers or optional severance payments ranging from $10,000 to $30,000. All of these employees on the payroll on January 1, 1986, will be guaranteed permanent employment.

Cuts in health insurance benefits, and a new requirement that workers pay part of premium costs.

Permission for Pan Am to hire workers for a 5-day workweek of 5 hours per day, at reduced pay rates, to help with operating peaks. These part-timers cannot exceed 15 percent of the workers in the Transport Workers' bargaining unit.

Following the Transport Workers settlement, the Flight Attendants agreed to a 3-year contract that included:

A 21.5-percent pay increase over the term, including a 12-percent pay increase scheduled under prior agreements but deferred to aid the company.

A new "B scale' pay progression schedule for new employees under which they will start at $784 a month (compared with the previous $1,236 starting rate) and remain below the rates for workers already on the payroll.

A new provision permitting Pan Am to hire up to 150 foreign nationals for flights beginning and ending outside the United States. These attendants, who would not be members of the union, would be paid $225 to $773 a month, compared with a range of $1,900 to $2,250 for union members already on the payroll, according to a union official.

Bargaining was continuing with the 6,000 reservations, fuel haulers, and other types of workers represented by the Teamsters.
COPYRIGHT 1985 U.S. Bureau of Labor Statistics
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Author:Ruben, George
Publication:Monthly Labor Review
Date:Jun 1, 1985
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