News Briefs, part 2
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>Strikebound USAir, Union Reach Pact
The Washington Post
USAir Group Inc. and its mechanics union reached a tentative agreement Thursday to end a four-day strike that shut down almost half of the airline's operations Monday morning.
The agreement, if ratified by the 8,300 members of the International Association of Machinists (IAM) who work for USAir, would send mechanics, cleaning crews and stock clerks back to work on Sunday and allow the carrier to return to normal operations the next day.
More importantly, analysts said, it allows the nation's sixth-largest airline to turn its attention to other issues in its fight to survive the worst downturn the airline industry has ever experienced.
And airline industrial relations specialists said that with the USAir settlement, the pressure will increase on workers at other carriers to take concessions to help the airlines ride out the recession.
Arlington, Va.-based USAir, which has lost more than $700 million in two years, is battling for survival on several fronts -- seeking concessions from its workers, trying to renegotiate a $600 million line of credit and seeking regulatory approval for an alliance with British Airways PLC that would provide $750 million and new strength to the carrier.
The strike forced a reduction in service by USAir to about 55 percent of normal and riled passengers whose travel plans had to be changed.
If the strike went on for more than two weeks, it could jeopardize both negotiations with the banks and the controversial British Airways deal, said Kevin Murphy, an airline analyst at Morgan Stanley Inc.
Negotiators for USAir and the IAM reached an accord at 11:30 Thursday morning after a nearly 24-hour mediation marathon.
The leadership of the union will recommend acceptance of the contract to the rank-and-file, said IAM spokesman Jim Conley. "We're glad that the strike is over and will be glad to get back to work," he said. Picket lines are expected to remain in place until Saturday night, he said. It will take several days for IAM members to vote on the pact; the union expects voting to be completed by Saturday night.
USAir Chairman Seth E. Schofield said the agreement achieved the company's objective of both short and long-term savings and called it "fair and equitable."
97-Year-Old Schwinn Bicycle Co. Files for Bankruptcy
Los Angeles Times
Schwinn Bicycle Co., whose Phantom, Sting-Ray, Varsity and other gleaming two-wheelers taught the sensation of freedom to generations of American youngsters, filed Thursday for federal bankruptcy court protection.
The venerable Chicago company, founded in 1895, owns just 7 percent o f the U.S. bicycle market compared to 25 percent during its 1950s heyday. The company said that it needs to restructure its heavy burden of debt and might need to merge with another company.
The family-owned company vowed to remain in business, and its bicycle s retain a solid, if stuffy, reputation. But Schwinn's woes were lamented across an industry that it still personifies for many Americans.
"It's a sad day for the bike world," said Mike Sinyard, owner and founder of Specialized Bicycle Components in Morgan Hill, Calif., whose 1981 "Stumpjumper" launched the mountain bike craze that has revolutionized the industry.
Edward Schwinn Jr., president and chief executive, blamed Schwinn's problems on $75 million of debt the company took on in the 1980s and said that the firm could no longer afford the debt burden in today's weak economy.
But cycling enthusiasts say that Schwinn missed the turn in the market to lighter, more sophisticated machines which helped triggered a cycling and fitness boom in the 1970s.