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Aviation History
1994
1994 - 0009.PDF
HEADLINES United approves sale to workers The board of directors of United Airlines has ap proved the $5 billion sale of the major US carrier to union workers, leading to the crea tion of the nation's largest em ployee-owned company. Before the deal is finalised, members of the Air Line Pilots Association and the Interna tional Association of Machin ists must approve it, as must the shareholders. The deal calls for wage cuts of as much as 15% and other labour concessions. Wages for union member will then be frozen for the five years. About $3.5 billion of the purchase price comes from wage and benefit concessions, with the remainder coming from pro ductivity gains. In return, the employees, in cluding 8,000 pilots and 28,000 rank-and-file machin ists, get a minimum 53% stake in the airline. This could grow to 63%, depending on perform ance of company stock during the first year of worker major ity ownership. United's 19,000 flight atten dants had dropped out of the negotiations, but have been in vited to participate in the em ployee stock-ownership plan. The agreement with the par ticipating unions also includes a no-strike clause for the dura- accounting and flight sched uling, from AMR for C$150 million a year. Air Canada is proposing the same services for C$70 million and would hire an extra 1,000 Canadian employees to operate them. The Air Canada offer in cluded a ten-year non-com petitive agreement barring Canadian from launching competition on any of the routes it sold. Canadian is pressing on with the consummation of the AMR deal, provided that it can extricate itself from the Gemini reservation system it shares with Air Canada. Air Canada is to appeal against a tribunal decision allowing the Gemini dissolu tion to go ahead. • tion of the initial investment period, as well as comprehen sive job protection. The unions involved have agreed to submit the agreement to their mem bership for ratification no later than 31 January. The airline and the unions expect to final ise the deal by 15 March. The agreement also calls for union support of a low-cost operation within United, code- named U-2, which will stick to markets within 1,200km (650nm). About 15% to 20% of United's pilots would work for the short-haul, low-cost, start up airline. Stephen Wolf, United's chairman and chief executive; would step down, as would John Pope, the airline's presi dent and chief operating offi cer. The unions have selected Gerald Greenwald, former vice- chairman of Chrysler, to suc ceed Wolf, if the buy-out goes ahead. D Lawsuit settlement brings end in sight for Tay-powered One-Eleven dispute Dee Howard settles One-Eleven suits Dee Howard has "resolved" law suits relating to its cancelled programme to re- engine the British Aerospace One-Eleven with Rolls-Royce Tay turbofans. The suits were filed by UK company Salian International, which provided finance for the programme, and by the UK's Hanson, which supplied chair man Lord Hanson's private One-Eleven for re-engineing. Keith Kaiser, a lawyer acting for San Antonio, Texas-based Dee Howard, confirms that both lawsuits have been re solved, but refuses to classify them as settlements. There is no confirmation of reports circulating within Dee Howard that the company, owned by Italy's Alenia, agreed to pay Hanson $16 million in a pre-trial settlement. Charles Schwartz, the lawyer represent ing Salian, says that Dee How ard has agreed to settle the company's suit for an undis closed amount, but which is expected to be $3-5 million. A jury had awarded Salian damages after finding Dee Howard guilty of breaching a contract with Saudi Arabian businessman Salem Binladen to form a separate re-engineing company in which he would have held a 20% stake. Dee Howard had appealed against the verdict, but settled before its appeal was heard. Hanson was suing Dee How ard for non-delivery. Dee Howard had argued that it was unable to complete the One-Eleven re-engineing pro gramme, halted in 1991, be cause BAe did not supply technical information needed for certification. Insiders con sider it unlikely that Dee How ard, or Alenia, will proceed with plans to sue BAe. • Chinese among bidders for Lake L ake Aircraft is negotiating with three groups which have signed letters of intent (Lois) to purchase the US am phibian manufacturer. One of the bidders is a Chinese com pany, says Lake president Ar- mand Rivard. The pending sale was con firmed as Lake's Chinese agent signed an Lol to buy a further 40 Renegade amphibians, which follow the initial 20 already destined for China (Flight International, 15-21 De cember, 1993, P21). Delivery of the first ten air craft on firm order has begun, Rivard says, and a formal ac ceptance ceremony will take place in China in January. The company has been on the market for about 18 months because its owners, the Rivard family, feel that they cannot afford to exploit the export potential for Lake's Renegade and Seawolf. All three groups with which Lake is negotiating have agreed to maintain the existing man agement team, Rivard says. • Dutch to buy Fokker 60 T he Netherlands defence ministry has approved the purchase of four Fokker 60 utility aircraft. The Dutch Parliament is ex pected to sign the deal by 1 February, clearing the way for a two-year programme leading to delivery of the first aircraft in March 1996. The development cost is put at NLG263 million (£92.6 mil lion) with an extra NLG30 million for programme man agement, training and technical support. NLG30 million is being provided by the Dutch economic-affairs ministry. The aircraft will be stretched by 1.62m over the Fokker 50 and be fitted with a large cargo door, strengthened floor, medi cal evacuation and troop- carrying equipment and self- defence electronics. The Dutch aircraft builder says that it will offer a 60-seat civil version of the aircraft "...if the market demands it". • FLIGHT INTERNATIONAL 5-11 January, 1994 7
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