TWA: One Strike and You're Out

It's countdown time at TWA again.
The airline and its employees have entered the traditional 30-day "cooling-off" period provided by federal labor law, meaning that the National Mediation Board has thrown up its hands and set in motion the process through which the airline's employees could legally strike. Contract talks were scheduled to resume today in Washington, D.C., but after two years of flying in circles, the negotiations have been declared legally dead under the Railway Labor Act.

If the clock strikes 12:01 a.m. EDT on June 10 without a new agreement, TWA's future could be as murky as that yellow stuff they called eggs on your last breakfast flight. A strike would be all but certain, and unless it ends eight minutes after it starts (like one by the Machinists in December 1982), it might be time to find another name for that ugly dome downtown.

There's not much everyone agrees on, but on this they do: It's one strike and you're out for St. Louis' hometown airline.

"TWA simply does not have the resources to afford a strike, and this outcome would be a losing proposition for all of us -- including our company, and union leadership, our customers and, most importantly, our employees," wrote William F. Compton, who's about to become the latest in a long line of CEOs at the airline.

Compton wasn't exactly talking trash here, seeing as how the sentiments were expressed in a letter to William O'Donnell, who, as president of District Lodge 142 of the International Association of Machinists in Kansas City, is the fellow across the bargaining table. Something on the order of "Go ahead and walk, we'll run the place fine with scabs" might have shown more confidence.

Then again, O'Donnell and the Machinists are only holding trump cards in their hands if they're willing to watch an airline crash. The union represents no less than 16,000 of TWA's 21,000 employees -- ranging from mechanics, machinists, baggage-handlers and rampers to flight attendants, ticket agents and customer-service personnel -- so "take this job and shove it" means no one works here no more.

From all financial accounts, even the rosiest reports show TWA barely getting by while competitors are flourishing thanks to a rocking economy and exceptionally low fuel prices. It's a virtual given that the airline could not withstand a strike of any significant duration.

"You can stick a fork in us if they walk," one management person told me, most anonymously.

So would they do it? Would union members give in to more than a decade of pent-up frustration over concessions and givebacks and lies (in the case of former TWA czar Carl "Slobodan" Icahn) and just say they've had enough?

It's doubtful, highly doubtful, because with the exception of some older employees who'd just as soon live off their pensions than be insulted again, most of those 16,000 workers needs their jobs and their benefits. More likely, the union's act of brinkmanship is just a traditional attempt to get the most they can from a company that has been to labor relations what boxer Mike Tyson has been to sportsmanship.

"My gut feeling is that they won't strike," Raymond Hilgert, professor of management and industrial relations at Washington University, told me Tuesday. "They want the leverage that comes with taking this down to the last moment."

Not that you can blame them.
"It's quite clear that the workers at TWA have suffered along with the airline itself," Hilgert says. "They always seem to get the short end of the stick when comparisons are made with the rest of the industry, and the union is probably angry, feeling it has been yanked around so much.

"Apparently they feel they can wring out greater concessions with the threat of a strike."

On the other hand, Hilgert adds, "The company has been in the economic doldrums for at least a decade, not being able to turn a profit, and a lot of it goes back to Carl Icahn. The company is saying it just can't afford to do any more than it's offering, and that may be right. It may not have the ability to pay any more."

Publicly, the two sides are have stayed relatively tame in their statements.
"We really feel this issue is going to be resolved," TWA spokesperson Julia Bishop said Tuesday. "Companies go through this -- we're not alone -- and we strongly feel TWA is going to survive the situation."

Gerry Sundling, secretary-treasurer of Machinists Local 949 in St. Louis, said, "At this point, it's too early to call." He, too, refrained from saying anything too combustive, although he maintained that the workers were serious.

"Our employees have been giving things up since 1986 -- we've made many sacrifices since that time -- and we're well under industry levels," Sundling said. "We want to be brought up to industry levels."

The company claims it is offering some $250 million in wage and benefit improvements over the next four years, but there are issues involving work rules and retirement as well. And with the Machinists representing so many different groups -- each with its own issues (and not especially aligned with one another on all of them) -- it's hard to decipher much of anything.

On the face of things, it seems that the company is offering reasonable raises (flight attendants, for example, would get boosts of 8.5, 6.36, 4.19 and 3.73 percent over the next four years), but when it beams that these would bring them up to 90 percent of the industry average, the union is offered a pretty easy counterpunch: What makes you think the rest of the industry will stay stagnant in pay during this period?

In turn, the company could fire back that in its far-below-average condition, its employees can't expect to be at industry norms. But those same employees then pick up the paper and read about how bright the airline's future now appears.

Worse yet, this is a company that can afford typically lavish executive pay and benefits, luxury boxes at all the sporting events, membership in Civic Progress and all the other trappings of a healthy giant corporation. Such items may be small on the balance sheet, but symbolically they're out there for anyone in St. Louis to see.

Is TWA healthy and rebounding, a civic cornerstone around which St. Louis should rally? Or is it struggling and strapped and vulnerable, in need of understanding "employee owners" who should be willing to work for far less than their industry counterparts?

The answer is probably in the middle. And so, uncharacteristically, is this:
TWA employees really shouldn't strike. But given their company's Neanderthal management history, you can't blame them for going for every dime, and every benefit, they can get.

Even if it takes until midnight on June 10.

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