[catastrophe 1984 while they develop "cost-cutting" policies. American…]
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catastrophe 1984 while they develop "cost-cutting" policies. American Airlines has set up a two-tiered wage structure that pays new employees significantly less.
Frontier Airlines has partly circumvented its union contracts by setting up a subsidiary, Frontier Horizon, that pays its nonunion employees much lower wages.
The result of all these concessions is that the airline industry is once again showing a profit-to the tune of $500 million in 1983. Dollars and Sense magazine (March 1984) reports that profits in the airline industry could reach $2 billion in 1984. More passengers and lower fuel prices figure into this turnaround but most important are the wage and benefit concessions imposed at almost every airline. Business Week reports (Nov. 28, 1983) that United Airlines, for example, operated last year at 96.4% of its 1978 capacity with 21% fewer workers. The Iniernationai Viewpoint Box 80B 2520 N. Lincoln Ave.
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ruling (continued from page 7: “Bankruptcy ruling stuns labor”) agreed to renegotiate contracts in the hope of saving jobs.
The NLRB assumed a somewhat more aggressive stance. They argued that union contracts should only be set aside in bankruptcy proceedings if the company can demonstrate that the business is likely to fail unless the contract is voided.
The Supreme Court rejected both of these arguments. The court's Feb. 22 decision delivered a heavy-handed blow to the collective bargaining process— holding that companies can set aside union contracts immediately upon filing a Chapter 11 bankruptcy petition.
The Supreme Court ruling now allows a company to discharge its labor contracts by merely showing that the contract burdens the reorganization plans and that the interests of the parties-the company, creditors, and union-balance in favor of rejecting the contract.
Little danger exists that thousands of businesses will now rush to bankruptcy court. However, many employers will file such petitions, and countless others will undoubtedly use the Bildisco ruling to threaten workers and impose concessions.
Moreover, the Bildisco case openly demonstrates the Supreme Court's willingness to tamper with what the labor officaldom considered untouchable notions about the so-called sanctity of the collective bargaining process. It is clear that legal action alone offers no real protection for workers' rights.
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