USAir's surprise appointment of former UAL chief Stephen Wolf to its helm could further exacerbate an already fragile situation with its unions.
The new USAir chairman and chief executive, renowned for his hard-line stance towards unions, now faces labour groups deeply mistrustful of management. One labour leader at a rival carrier says USAir employees have never believed the airline's troubles were their responsibility, and now the airline is recovering - it is predicting profits for 1995 - they feel vindicated.
USAir is seeking $500 million in union concessions; Wolf's predecessor Seth Schofield resigned after talks with labour broke down last summer after months of negotiation, but stayed on until a successor was found.
Wolf's dealings with the unions could be complicated. The pilots, whose contract is up for renewal in April, are not likely to feel any need to cooperate with Wolf due to a 1992 agreement of no layoffs until 1 July 1997 in exchange for wage concessions. If the machinists, currently in contract negotiations, and the flight attendants, whose contract expires next January, take their cue from the pilots, arduous months of bargaining lie ahead.
Wolf joins USAir after a quiet period working as consultant to Air France. But he was reviled by unions at United, where he eventually was forced to leave as part of the employee buy-out package which he negotiated.
BA has waived its subscription rights to a further $450 million of preference shares in USAir because it did not expect to get authority from the US Department of Transportation to raise its stake.
Jane Levere
Source: Airline Business
