The Spark

the Voice of
The Communist League of Revolutionary Workers–Internationalist

“The emancipation of the working class will only be achieved by the working class itself.”
— Karl Marx

United States:
United Airlines—Using the Courts to Bankrupt the Workers

Jan 27, 2003

On January 10, a federal bankruptcy judge imposed a 13% wage cut on United Airlines workers represented by the International Association of Machinists (IAM), completing the first round of concessions taken from the workers. As the company emphasized in court, these concessions were not to be the last. According to United, the "interim" 13% cuts imposed by the judge on IAM-represented workers and the "interim" concessions given "voluntarily" by its other unions 29% by pilots, 13% by flight dispatchers and meteorologists, and 9% by flight attendants were only enough to let it get through the next few months.

This, United explained, was why it had also filed a second motion, asking for the right to void all its union contracts. But United asked the court to put off hearing this issue until March 15 giving it a chance to come to a "friendly agreement" with its unions for further concessions.

The judge gave United everything it asked for including a reduction in IAM members’ pensions, something that United had not asked for from other unions not as of January 10, anyway. It was a warning: if you don’t accept the concessions, the court will impose worse ones.

Blackmail! Extortion! That’s all this is. And it’s directed not just at the workers at United, but at the whole airline industry, and behind them at the whole working class.

Turning to the Bankruptcy Court to Take Concessions

Over the last few years, many more companies have used bankruptcy proceedings to attack the workers wages, benefits and working conditions. And, increasingly, some of the biggest companies in the country have been trooping into bankruptcy court. Of the 12 biggest bankruptcies ever filed, nine of them took place since September 11. All of these companies filed under Chapter 11 provisions that allow a company to go on functioning, while getting rid of some debts, including pension and other obligations toward its work force.

Within the last few months, for example, Bethlehem Steel got permission from the bankruptcy court to completely junk all its pension obligations current and future. Retired workers will go on drawing a pension but paid out by the Pension Benefits Guarantee Corporation, which in many cases pays out less than what a worker would have drawn. What’s worse, there is no medical insurance whatsoever for retirees covered by the PBGC. National Steel had already done the same thing. But National Steel’s story didn’t stop there. A.K. Steel Holdings and U.S. Steel then went on a bidding war to buy up National. With bids around a billion dollars each, they both had the gall to insist they could not afford to cover the pensions. They would take National but only if they were allowed to slough off responsibility for its retirees, past and future.

Behind these examples stand hundreds of other companies doing the same thing. The Pension Benefits Guarantee Corporation went from being eight billion dollars in surplus at the beginning of 2002 to being almost two billion in deficit by the end of the year, as the result of this wave of bankruptcies. And most of this decrease came before the PBGC began to pay out to retirees at some of the biggest bankrupt companies.

Of course, for years, companies not only have been junking their pensions, but also cutting wages, chipping away at working conditions, increasing the intensity of work and cutting jobs. But this turn to the bankruptcy courts indicates a new turn of the screw, promising an even worse wave of attacks on the working class, not just on pensions, but across the board.

In the current economic situation, the bankruptcy court provides companies with a convenient way to radically lower their labor costs, using the threat of a company’s complete liquidation to put the workers in a seeming impasse and thus to lessen the risk that the workers will fight back.

If the companies think they can get away with this it’s because of policies led by the unions for years. They accepted round after round of concessions during the 1980s, concessions they justified with the argument that it was necessary to rescue the bosses, that the workers’ future well-being depended on their company’s well-being. This view gained even more currency during the ’90s, as the unions diverted the workers away from fighting for their interests and pushed them instead to search for a "partnership" with their own boss. But partnership with the bosses did not protect the workers, any more than concessions had. During the supposed "good times" of the 1990s, the workers continued to lose ground, despite enormous profits rolled up by the companies to which the unions had given concessions a few years before and were working together with now. Whether granting concessions or seeking a "partnership," the unions were impressing on the workers the false idea that they could find common ground with their bosses. This did not protect the workers, it simply disarmed them, diverting whatever desire they might have had to fight collectively to improve their situation. And it encouraged the bosses to come back and ask for more.

The example of what’s happening at United today is particularly important because it shows to what point these policies have led the working class the biggest corporations in the country today think they can get away with junking in one blow commitments they would not have dared touch, even a few years ago. The unions’ policies have brought the working class into a dead end. To break out of it, the workers are going to have to begin to fight again for their own interests. Forget about what the boss wants.

"Worker Ownership" Another Term for Concessions

Ten years earlier, United had also claimed to be in a crisis, declaring losses for three straight years. To convince the workers to give up concessions in wages, benefits and working conditions, the company had offered two things: one) they were to get stock, enough so that collectively they would own over half United’s shares; and two) at the end of six years, they were supposed to have all the concessions wiped out and their losses repaid. The estimate put on these concessions at the time came to a total of about 4.5 billion dollars. Then, too, the unions caved in to management’s blackmail, with the IAM convincing its workers to accept wage cuts averaging 14% in 1994. The pilots took a 24% wage cut. Only the flight attendants, who were among the lowest paid employees, refused to go along.

This was the famous "employee-ownership" deal, which proved to be nothing but a con game. Just as in Enron’s case, the workers could not sell their stock for many years and, in any case, not until after they retired or quit; and the stock was not set up to pay out any dividends to the United "worker-owners" until 2000. Nor did the deal even pretend to give workers representation on United’s board proportionate to their stockholdings the unions got only two seats out of twelve.

As events were to show, "worker-ownership" gave no protection to the workers. Six years after giving up concessions, their wages were only where they had been in 1993. And taking inflation into account, the basic wage rates for United mechanics, for example, were about 30% less in 2001 than they had been in 1993. At the end of the six-year concession contract, United simply stonewalled union proposals to bring United workers up to wages prevailing in the industry and to restore benefit cuts. At the same time, the fact that United was able to lower its "labor bill" and keep it down during all these years also weighed on the wages of workers at other airlines.

United finally did agree to a new contract for the pilots in the summer of 2000, after a much publicized campaign during which pilots refused overtime, tying United’s system up in knots. But when the mechanics started to refuse overtime and began to "work to rule" on safety checks or carried out "sick-outs," the company quickly suspended workers, then rushed to the courts to get an order threatening jail time to mechanics who continued these actions. The machinists were stuck with their concessions.

It seems that management of a "worker-owned" company acts exactly like management in every other capitalist company. The fact that the workers owned the majority of shares of stock didn’t give them control over management, any more than the relatively small amounts of money written into each of their stock accounts turned them into capitalists. By contrast to executives who manage to sell off big shares of their stock before bad economic news hits, the workers were stuck with these shares, which today are practically worthless. As of September 11, the machinists were still working under the old concession contract, 15 months after it had expired.

In the first weeks after September 11, airlines announced they would cut at least 140,000 jobs, with United alone proposing to suppress 20,000. Contractual job protections, seniority rules and job classifications were thrown out the window by the airlines which argued that it was the fault of the terrorists.

Congress quickly paved the way for the airlines to demand outright concessions from their workers, under the guise of giving grants totaling five billion dollars and loan guarantees worth ten billion. Taking a page out of the book that Jimmy Carter wrote for Chrysler during its drive for concessions, the Bush administration, backed up by both parties, proposed a requirement that airlines applying for loans must "provide a demonstration of concessions by the air carrier’s security holders, other creditors, or employees."

United quickly announced that it would apply for government grants. Then it suggested that it might have to apply for government loans if the economic situation worsened putting its workers on notice that it would soon come calling for more concessions.

Giving a Very Temporary Pay Increase in Order to Get Permanent Concessions

The company had a problem on its hands. The workers, who had been promised in 1994 that their concessions would be repaid, were still waiting and not happy about it. So the company carried out a kind of end run. In early 2002, after having stalled for more than a year and a half, United finally agreed to wage increases which had been proposed by an arbitration board for the mechanics. Pointing to United’s pay scale, which was about 30% below the standard at the other big airlines, the board proposed an immediate increase but only of 21%, with two more increases in 2003 and 2004, totaling 6.7% more. The board also recommended that only part of the increase be paid retroactively for the time since the old contract had expired. Thus, the workers were to get a big wage increase but not enough to make up for what they had lost, nor enough to make up for inflation.

But the real point of this deal was the trick attached to it, which the government board proceeded to spell it out: "Given the aftermath of September 11th for United, the Board would be unable to recommend the industry leading wages and benefits set forth herein without agreement upon appropriate IAM participation in a financial recovery plan." To that end, union leaders signed a letter committing the union to negotiate wage and other concessions if, during the first six months of the new contract, the company "proposes to implement a financial recovery plan to address the company’s severe financial condition or as a prudent alternative to a bankruptcy filing."

In other words, the union agreed to bind the workers to accept future concessions before the company had even spelled them out. The workers were being given a pay increase, most of which was going to be taken back almost immediately. Most significant any negotiations over the concessions would take place within the framework of the contract and its no-strike commitment. The workers were being asked to put legal handcuffs on themselves in advance.

Many of the workers represented by the IAM, and especially the mechanics, were strongly opposed to the new contracts for this reason. They were also angry that they weren’t getting full retroactive pay, and that it would not be paid right away, but only in eight installments over two-years time, with the first installment not until March of 2003, more than a year from then.

And, as before, some mechanics continued to raise the idea of decertifying the IAM and joining the Aircraft Mechanics Fraternal Association, a craft union restricted to mechanics.

After testing their members’ reactions, IAM leaders pretended to come out against this contract a few days before the vote, supposedly because it had been imposed by the arbitration board. The contract was turned down by mechanics and utility workers in mid-February 2002 with 68% voting against. IAM leaders headed back to the negotiating table, quickly adding a few cosmetic changes to the first offer: retroactive pay was to be increased but still to only about 60% of what should have been paid and the date for the first quarterly payment was moved up from March 2003 to December 2002. They also added a provision that workers could vote on any concessions that might be negotiated. The no-strike commitment was, of course, left in place.

This time, IAM leaders threw themselves into pushing for this contract, arguing that it was necessary to "nail down" wage increases before things in the airline industry got any worse. This contract was carried, but only by a 59-41 margin.

The IAM then went on to negotiate similar contracts for the other United workers it represented. The last contract was ratified in April 2002. According to IAM leaders, the new contracts put the wages of the workers at "the top of the industry."

Mocking the whole process, United CEO Jack Creighton issued a statement calling these new IAM contracts, "a critical milestone in developing a recovery plan that meets the needs of passengers, preserves jobs, and puts the company on the road to financial stability." On the very day negotiations for the last IAM contract were being wrapped up, the company called its unions into a meeting to discuss its need for a "recovery plan" that is, for concessions. IAM officials boycotted the meeting, refusing, they said, to talk about possible concessions because the pending contracts had not yet been ratified! As they were soon to demonstrate, they would be all too ready to talk about giving back what they had just negotiated and much more. But one thing at a time, please!

United Demands 9 Billion Dollars the Unions Offer 5.8

Alarming stories now appeared in the business press about United’s situation. In 2001 when it had been proposing to buy out US Airways and to start up a private jet service for business executives, called Avolar United had emphasized the strength of its financial position, underplaying its large losses in the first half of that year. Now, referring to those same losses and about September 11, it talked about its rapid "cash burn." As summer wore on, United began to list all its loans that would soon come due loans for which it had pledged its aircraft, implying that if it couldn’t pay them its creditors would seize the planes, thus forcing United to shut down.

Even if United had been in as bad a shape as it claimed, this was absurd. In the spring of 2002, the industry had already estimated that over 2400 planes, about 11% of the world’s civilian air fleet, were parked in the Mojave Desert producing no income. United’s creditors hardly wanted to park still another fleet of planes out there. But union leaders not only didn’t point this out, they repeated these stories about loans coming due, adding to the sense of crisis.

In August 2002, leaders of all the unions were summoned to company headquarters where management presented them with its "recovery plan." United was demanding concessions worth nine billion dollars over six years.

Leaders of all the unions rushed to form the "United Airlines Union Coalition" not to organize a resistance against such an outrageous demand, but to come up with a counterproposal. They would pledge five billion dollars worth of concessions over five years calling them "labor cost savings." By the following month, the union coalition had agreed to up their offer to 5.8 billion dollars in concessions. The union coalition conveyed its proposals in a letter which ended with the following assertion: "The coalition framework is without precedent for this or any other airline, and United has the most committed employees and strongest airline franchise in the world. We will not let it fail."

Once again, the unions were going to the rescue of the bosses instead of preparing the workers to fight back.

Negotiations then shifted to separate tables where the concrete sacrifices would be worked out. The pilots union proposed an average 18% pay cut, among other things. The unions for flight attendants, whose wages were the lowest, offered to cut wages 3.95%. These concessions were soon ratified.This left the IAM, with several contracts representing mechanics, ramp and food workers, baggage handlers, ticket agents and a few other categories. IAM leaders had agreed inside the coalition to come up with wage cuts amounting to 7%.

But distrust was running high, particularly among the mechanics and this was aggravated when United announced it was giving its new CEO (the third in two years) a three- million-dollar signing bonus, plus almost another million in salary. The IAM complained that management was not contributing "its share"; United announced that it hadn’t forgotten its officers were trying to "finalize" what they would "contribute" to the "recovery effort." This was nothing but another slap in the face.

It wasn’t at all clear that concessions could be rammed down the throat of IAM members.

Pitting the US Airways Workers against the United Workers

It was exactly at this point that the IAM began to discuss a second round of concessions with US Airways, the number seven airline in the country. The unions had already pushed the workers to accept one round in the summer, agreeing to cut the wages of pilots, for example, by at least 26% and mechanics by 8%. This time, US Air was demanding concessions in work rules aimed at farming out a great many of the jobs of workers represented by the IAM to other companies or to reduce classifications so as to pay lower wages for the workers who continued. Among its demands was one particularly outrageous: to double co-pays for medical insurance for active workers and require all retirees to pay the full cost if they wanted to continue the insurance, even while increasing the deductibles for everyone. And, sniffing a new "opportunity," US Airways said that in the event the U.S. went to war against Iraq, it would immediately implement a 5% wage "deferral" for up to 18 months.

Once again, the unions agreed to the bosses’ demands. Union leaders announced that, after looking at the company’s projections, they had to conclude that this second round was necessary, if distasteful the only way to prevent US Air from being liquidated by its creditors. The US Air workers ratified the new concession demands although by much lower margins than the first round. One contract was passed with only a 5-vote margin. IAM district 141-M president, Scotty Ford, commented: "Our members have agreed to provide US Airways with the resources to avoid liquidation and successfully emerge from bankruptcy. Their sacrifice and commitment to the survival of this carrier deserves to be commended."

What was happening at US Air could only serve to encourage United to push harder still for concessions. The business press had already drawn attention to how much more US Air workers were giving up. The Wall Street Journal reported on November 14: "Analysts are finding fault with the size and validity of United’s desired labor cuts, leading some to speculate that the Air Transportation Stabilization Board will deny the carrier’s request for aid. They say that United’s planned sacrifices aren’t persuasive in light of more aggressive pruning at US Airways."

Then United announced its intention to cut another 9,000 jobs. The only reaction by IAM leaders was to warn the United workers that still more jobs would be lost if concessions weren’t given, thus reinforcing the bosses’ blackmail. The same Scotty Ford who praised US Air workers for accepting concessions issued this warning to United workers: "United Airlines is struggling to overcome the combined effects of 9-11 and an unrelenting worldwide travel recession." He then presented new concessions proposals to the United workers. Randy Canale, president of District 141, warned: "Too many airlines have been forced into bankruptcy, never to return. Too many good airline careers and families have been destroyed." Having brandished a stick, Canale then held out a carrot:"Despite obstacles and unprecedented economic pressures, I still believe our greatest days lie before us."

At the end of November, two of the three IAM units ratified this first round of concessions but the margin in the ramp workers’ vote was not very big. And the mechanics turned down the concessions demanded of them.

They were immediately attacked by the leaders of their union. Canale, in a letter to workers, declared: "It is unfortunate that some members at United still question the need for participation in a recovery program. At this stage, the alternatives are so undeniably worse, I question the motives and judgment behind such a decision." He denounced those who opposed the first proposal for "only trying to advance their own agenda."

The heads of the other unions began to condemn what they called the "selfishness" of the mechanics, and the heads of the IAM predicted that if the mechanics did not agree to give concessions that would be the end of everyone’s jobs. To force the workers to give in, union leaders were resorting to the bureaucrats’ usual tricks in this kind of situation: threats, arm-twisting and slander, at the same time trying to turn the other workers against them.

IAM leaders rushed back to the company to cobble together a new version of the same contract, scheduling a re- vote for December 6. The IAM made no attempt to pretend it was coming back with a better offer: "It has been reported in the press that United’s goals and financial targets have not changed [i.e., since the rejection of the first contract]. They still need the same costs savings from the Mechanic and Related employees to avoid bankruptcy." Nor did it even pretend there would be no new job cuts. It simply argued, "the current plight is not of the employees’ making, but it will certainly take a collective effort of every United employee to keep this airline out of bankruptcy."

But even before the vote could take place, the courts intervened to help United increase its demands.

A Government Board Helps United Up the Ante

On December 4, the Air Transportation Stabilization Board, set up to administer the airline bailout, turned down United’s application for loan guarantees, giving, among other reasons, these two points: United’s debts required it to get bigger cost savings from labor; and its underfunded pension obligation required it to provide "alternatives" to that funding.

In other words, the Board was giving United another pretext to ask for still more concessions. Given the readiness of the union apparatuses to offer up concessions thus far, the Board and United had every reason to believe they would agree to this new extortion demand.

Five days later, United went into court filing for a Chapter 11 bankruptcy, the kind that allows a company to continue working, attempting to gain time to pay off some debt obligations, while it sheds other obligations including labor contracts.

Three days after that, on the 12th of December, the company presented its unions with a new list of demands, asking for still deeper concessions.

And what was the response from the unions? They all rushed to "their" company’s aid, condemning the ATSB and the Bush administration for refusing the loan guarantees, blaming the other airlines for interfering in the affair. The president of the Association of Flight Attendants (AFA) issued a statement condemning "the unethical collaboration between the Air Transportation Stabilization Board and some other airlines who stand to gain if United fails." He went on to proclaim: "These outside forces will not succeed in grounding United. The coming months will be difficult and painful for flight attendants as we work through the bankruptcy process. But we are committed to continuing the unprecedented cooperation between employees and management that will be necessary to turn United around and successfully shepherd it through reorganization. This process will mean further cuts to our contract and a bigger strain on our families. But we will face these challenges head on.... We will not be deterred from our goal of restoring United to the premiere airline in the world.... Those who doubt us will lose. They will not be able to compete with the new United."

Leaders of all the unions spoke in a similar vein, calling on United workers to rally around management in order to defend United against the competition. This was only another way to proclaim their readiness to help the company take still more concessions from the work force.

The president of the Air Line Pilots Association (ALPA) dredged up the specter of September 11 once again. "The aviation industry has been dealt yet another blow today as one of this nation’s greatest airlines was forced to file for Chapter 11. Pilots across the country are saddened, disappointed and angry that an airline as eminent as United, which was used symbolically by terrorists to carry out mass destruction, is now in bankruptcy. It pains me to acknowledge that terrorism scored another victory today, and this Administration let it happen."

On December 15, United announced that its lenders some of the biggest banks in the country were demanding that it get this latest round of concessions. If not, said United, the banks would cut off all its lines of credit.

The unions rushed to provide United with what was "necessary" to get it past this new crisis. But, as United and its bankers well knew, it was not a question of what was "necessary," but of how much the workers would accept to give up. And the willingness of the unions to bring pressure on the workers is what encouraged the company to keep demanding more concessions. ALPA, the pilots union, agreed that it would now recommend a 29% wage cut (in place of 18%). And AFA, the flight attendants union, recommended a 9% cut (in place of 3.95%). But the leaders of the machinists union, however, still had an angry membership on their hands and the mechanics had refused even to give up 7%.

In the midst of all this, United announced that it intended to file a petition asking the bankruptcy court to grant a 1113 order, that is, an order to vacate all union contracts. The petition was filed on the 27th, along with a second petition asking the judge to impose a 13% pay cut on all IAM members, effective January 1. IAM leaders then proclaimed that they were ready to negotiate whatever concessions that United’s situation required, but that these concessions should not be imposed at the point of a court order.

As we said at the beginning of this article, the petitions were heard on January 10, with the court granting the 13% wage cuts for workers represented by the IAM and approving the second round of wage cuts the other unions had offered. And, by rescheduling the hearing to get rid of all union contracts, the court gave United the next club it would use to extort still more concessions.

United’s Appetite for Concessions Grows Even Bigger

United, armed with the March 15 hearing date, said that it must now get cuts amounting to 2.4 billion dollars a year for six years or a total of 14.4 billion dollars.

Two days after the hearing, United presented its concrete demands. The following demands were made of all the unions. Wages, which had already been severely cut, were to be frozen for two years, followed by wage increases of 1.5% a year for four years assuming no new concessions, of course. Among other things, workers would lose two holidays a year, have five of their vacation days "unpaid," and total vacation time reduced. They would have to use vacation days to cover any unpaid family & medical leave. The amount they could accrue in their sick leave bank would be reduced and occupational illnesses and injuries would draw out of this bank, thus reducing its availability for other illnesses or injuries. Workers would have a 20% co-pay imposed on their medical, dental, etc. insurance, and deductibles would be about doubled, depending on the plan. The payout on pensions would be decreased by 20%, with all retirement benefits before age 62 (60 for pilots) severely reduced. Retirees, once they reach Medicare age, would have to pay for all their medical insurance. The amount of severance pay for laid off workers would be capped eight weeks, instead of the previous 12. As for the company’s promise to put some of its stock into a 401(k) plan in return it’s nothing but a sick joke, given the losses United workers had already suffered holding United stock.

Then there are the specific cuts that apply to the different categories. Concerning the mechanics and other IAM workers, United intends, among other things, to create lower wage rate classifications for a number of jobs; to outsource as much work to lower wage companies as it wanted; eliminate or cut back on premiums tied to skills, seniority, or shifts; eliminate job protection clauses which currently prevent some layoffs; get rid of most restrictions on use of part-time workers. As for pilots and flight attendants, the company proposed to move a lot of their work into several "low-cost" airlines it was in the process of setting up, for which they might, or might not, qualify to work at still lower wages and benefits, of course.

How does a company like United get away with something as outrageous as this? It was the second biggest airline in the country, and had been extremely profitable for a number of years, posting earnings of 7.3 billion dollars between 1994 and 2000. And even while it claimed to be losing money in 2001, it found enough cash to be able to propose buying up US Air for 4.3 billion dollars. The deal fell through only because the government refused to OK it, on grounds it would have handed United a monopoly hold over large segments of the market. As for Avolar, United had laid out nearly 100 million dollars to it set up, and it had started to order a fleet of luxury business jets. Also in 2001, United paid out over 1.5 million dollars in salary and bonus and an additional 5.7 million in "severance" pay to James Goodwin, its chairman and chief executive officer, who was leaving under a cloud. In the three years running from 1999 to 2001, its four top officers alone made more than 20 million dollars. And in 2002, as we already said, right in the midst of this concession drive, it announced payment of four million dollars to its new CEO. Even if United really had lost money in the recent period, it could hardly claim it had no resources. It carries 20% of all U.S. air traffic, with hubs in Chicago, Denver, San Francisco, Los Angeles and Washington, plus a number of important routes to Europe and to Asia, and it had code-sharing arrangements that linked its flights with Latin America.

Where did this enormous company get the gall to demand such concessions from its work force? Where else, but from the positions taken up until now by the leaders of its unions. Each concession they agreed to was only an encouragement to the company to ask for more. This is not a question of United’s financial position, it’s a matter of the union leaders’ readiness to put the company’s interests ahead of the workers’ interests.

Sacrifices Taken "Fairly and Equally" from All the Workers Are Still Sacrifices

This readiness to put the company’s interests first was true of every one of the unions including, worst of all, the machinists, because it was among the workers represented by the IAM that there was strong opposition to these demands. But what the IAM leaders did pretending for a minute to oppose the concessions, but in a way which gave the workers no alternative not only didn’t encourage the workers to try to make a fight, it was a way to make the workers toe the line.

Look at what IAM leaders said after the bankruptcy court imposed the concessions on January 10, concessions which they had pretended to oppose: "Today’s action by the Court to impose wage reductions was opposed by the IAM in part due to the negative impact upon the PCE pension agreements. This in our view was an unfair and unequal burden, not being demanded of other employees in this process." IAM leaders didn’t need to worry, since the company soon presented the same demands for pension reductions to the other unions the sacrifices now being demanded are "fair and equal."

Having made this disgusting pretense of a "protest," IAM leaders then went on to argue that more concessions were needed: "Make no mistake. The very survival of United Airlines and our contracts is at issue in these discussions. Be assured that only the fair and equal sacrifices necessary for United’s survival will be presented for your review, comment and vote when these discussions have concluded."

The company, backed up by the government, the courts and its big bankers present the workers with a pure and simple extortion demand: either give us all the concessions we are asking for including an end to a very significant portion of your current jobs, as well as a reduction in your standard of living and benefit protections or we will have the courts get rid of your contracts, and then we will take what we want anyway.

When US Airways demanded its first round of concessions, the IAM offered this justification:"Should this proposal be ratified by the membership, US Airways has agreed not to seek further cost reductions from 141 members during bankruptcy court proceedings. The company has indicated, however, that if this proposal is rejected it would petition the bankruptcy court to modify or terminate your current collective bargaining agreement. If they do so, the amendments they seek will not be limited to what is contained in this proposal." As events soon showed, both at US Air and at United, giving in voluntarily didn’t stop the companies from demanding more than "what was contained in the this [first] proposal."

In fact, to give up the concessions voluntarily means that not only do the workers give the company everything it demands, but by accepting the company’s extortion threats, they prostrate themselves in front of their enemy, encouraging the company to demand still more.

The only way out of this trap is for the workers to organize a fight to defend their jobs, their wages, their benefits. But this is exactly what the IAM leadership has not proposed in this situation, not once without speaking of the other unions.

From US Air to United to American to Delta to ... the Whole Working Class

When United announced that it was filing for bankruptcy, a spokesperson for American was quoted by the Wall Street Journal as saying, "United is our biggest competitor and if they fly with a cost structure significantly lower than ours, that may just accelerate the need to lower our costs." Underlining American’s intention to push for a bigger cutback in jobs and increased productivity of the remaining workers, American’s vice president for employee relations was quoted, "We can’t be paying two guys to do the work of one." He might as well have said it directly American wants one worker do the jobs of two! American also said it would "request" its employees to forego scheduled pay increases this year. Then on January 21, it announced it would ask its unions for concessions totaling two billion dollars a year as big as the ones at United Airlines.

At the same time, a Delta spokesperson said that while a pay cut was not in the current cost-cutting plans of the company, "pay cuts could not be ruled out." Delta has only a small part of its work force unionized, so the form the maneuver takes may be different, but the end result sought by the company will be the same a degradation of the workers’ standard of living and working conditions, and even bigger cutbacks in jobs.

This attack was aimed first at workers at the airlines. After all, September 11 gave the airline bosses such a good pretext. But if these severe sacrifices continue to be given up voluntarily by the airline workers, they will soon be demanded from other workers. The rest of the working class is already coming under attack.

This is the same maneuver that all the big companies carried off in the 1980s, when concession demands started at Chrysler, under the pretext that it was about to fail, but then moved on to Ford and GM which couldn’t pretend to be near failure only then to move on to the rest of the working class. The issue then was not the economic situation of these companies as Chrysler’s quickly resurrected profitability proved. The issue was whether or not the workers could be maneuvered into agreeing to sacrifice themselves for the increased profits of these companies. What played a key role in this debacle in the 1980s was the willingness of most union leaders to try to convince the workers of the need for sacrifice. A few did not, of course. But with the open support by most union leaders for the bosses’ concession demands, they quickly spread across the whole organized working class. And everyone paid, whether or not in a union.

The working class really finds itself in a dead end today created by the idea that the workers and the bosses have something in common, this idea which has been openly advocated by the unions ever since the Chrysler concessions.

The Workers Have to Break Out of this Trap!

Today, it seems like the bosses are holding all the cards in their hands.

It’s not true it’s just that the workers haven’t started to play their cards yet.

Someone has to refuse this blackmail, turn a deaf ear when the bosses cry that they are losing money.

Why should the workers believe anything the bosses say? The bosses lie and we know it. There’s no reason to believe their wild claims about going broke. But even if they were, that would change nothing. The only way we are going to protect ourselves is by fighting against the old bosses who lie to us or the new ones who will take over the company if it fails or the banks who try to sell off the company.

Companies like US Air and United are backed by enormously wealthy banks and other financial interests. Those big companies and their bankers can be forced to cough up the money but only if the workers fight. Only if the workers force them to do it.

If the workers in the airlines were to begin a fight, that could give confidence to other workers who also have many of the same problems and are coming under attack by their bosses.

It’s absolutely vital that the combative workers, the union militants and whoever else is ready to fight start to resist this new round of attacks. Those who are ready to fight have to prepare the rest of the workers to resist these attacks.

The working class has accepted too much already.