EDITORIAL
What a Deal!
And Just as Crooked the Second Time Around!

Jan 7, 2002

Just look at it–this deal that America West cut with the newly formed “Air Transport Stabilization Board”! (This “emergency board” was authorized by Congress to hand out 15 billion dollars to the airlines, after September 11.)

America West is the first airline to be granted loans by the “emergency board.” The federal government will guarantee loans totaling up to 380 million dollars for America West. In exchange, the federal government will be given “stock warrants” which would allow the government–if it wants–to buy stock from America West. In other words, these warrants will allow the government to ... hand over still more money to America West.

In any case, this is not the worst part of the deal. The “emergency” board refused to give loan guarantees unless America West agreed to suspend currently scheduled wage increases for some of its workers and to “control labor costs” for all of them over the next six years.

America West, of course, was more than ready to agree. We can just hear its executives telling the unions: “the government says we must freeze wages until the year 2007.”

It’s the same game that was played in 1980, when Chrysler claimed, just as a number of airlines are doing today, that it was about to go belly-up. The government agreed to guarantee loans that Chrysler took out, in exchange for stock “warrants.” It also required Chrysler to demand wage and benefit concessions from its workers.

Unfortunately, two decades ago, when Chrysler demanded the union agreed whole heartedly to this rotten concessions deal. It would protect workers jobs–or so they said.

What will this game mean today, not just for America West workers, but for other airline workers and even workers in other industries?

We should remember that when Chrysler workers gave wage and benefit concessions so the company could get loan guarantees in 1980, Ford and GM then demanded concessions, too. And they didn’t need any loan guarantees from the government to do it. They just yelled, “we can’t compete,” and the union stepped forward to help them take wage and benefit concessions too. In fact all three companies took two rounds of concessions.

And–just as a reminder–after Chrysler, Ford and GM, came almost every other major company in the country, lining up to take back some of what workers had gained for themselves in earlier struggles.

So far, no major airline has submitted a request for loan guarantees. Some may never do it, some are just waiting to cut a better deal. (The fact that they can wait demonstrates something about their claims that September 11 did them in. Despite the big losses they talk about, they apparently all still have ready cash on hand, accumulated from the period when airlines profits were booming.)

But regardless of whether all or some or even none of them ask for loan guarantees, the main point of this deal has already been put in play: that is, to put pressure on the workers to reduce their standard of living.

We may have been dealt the same dirty hand that was dealt to workers two decades ago. But it doesn’t mean we have to play it. When someone cheats you at poker, then tries to deal from the bottom of the same crooked deck a second time, most people say STOP.

It’s time for workers–starting with those at America West–to say STOP, too. And if workers are determined, they can keep the weakest-hearted union official from caving in, not to mention reinforcing those union officials who do want to make a fight.