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US Airways Union Says Raid Halted Progress on New Contract

Stocks in this article: AAMRQ.PK LCC UAL

CHARLOTTE, N.C. ( TheStreet) -- When the International Brotherhood of Teamsters announced two months ago that it would seek to raid US Airways (LCC) mechanics and related workers, the incumbent International Association of Machinists was understandably displeased.

Not only was the IAM in danger of losing 3,500 members as well as hundreds of inactive members, but also the union was two years along the road to negotiating a new contract for the group and the talks had to be suspended. "We were at the end game," said IAM spokesman Joe Tiberi. "It had taken us two years to get to that point. We had asked for a release from the National Mediation Board. I don't know when or if (the board) would have acted on that request, because that is when everything stalled."

The new contract was to be, and still may be, the second contract the IAM has negotiated at US Airways since the 2005 merger with America West. Until a merger with American Airlines (AAMRQ.PK) became likely, no other major union at the carrier had negotiated a contract following the merger.

Voting in the mechanics and related workers representation election begins today, with ballots to be counted on August 12. Ironically, a week ago, on July 1, mechanics received a 3% raise, as a result of the contract the IAM negotiated in 2009. That followed a 3% raise that took effect on July 1, 2012, seven months after the existing contract became amendable on Jan. 1, 2012.

If the Teamsters win, Tiberi said, it would take months to restart contract talks. Bill Wise, a union negotiator and president of IAM Charlotte Local 1725, said the airline and the IAM have reached tentative agreements on about 85% of contract issues, although key economic issues, including wages and retirement pay, are still to be negotiated. "We pretty much got derailed with the Teamster raid," Wise said.

As a starting point, the company proposed a 3% raise on the day of signing and a 2% raise eighteen months later. In response, the IAM proposed wage increases of approximately 13% over two years as well as increased pay for mechanic licenses. The proposals are short-term because the pending merger would bring new negotiations on a joint contract. Top-scale US Airways mechanics with ten years on the job currently earn about $68,000 annually.

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