NEW YORK — Labor unions at troubled Pan American World Airways are leaning toward Beverly Hills millionaire Kirk Kerkorian as the savior of the airline, a top union official said Wednesday.
"We said to ourselves, 'We have a better chance of having our jobs in five years with Kerkorian's plan than we would by staying with the current management,' " said the official, who asked that he not be identified by name. "I don't think that people realize what terrible financial shape Pan Am is in."
Pan Am spokesman Jeffrey Kriendler refused to comment.
Kerkorian's representatives met most of Tuesday with officials of the four unions making up the Pan Am Joint Labor Council, which has been seeking an investor to provide the financing for a restructuring of the ailing carrier. The Kerkorian team included Fred Benninger, chairman of MGM Grand Air, an airline recently launched by Kerkorian to fly all-first class service between New York and Los Angeles, Terry Christensen, president of Kerkorian's holding company, Tracinda Corp., and Donald Lloyd-Jones, a veteran airline executive.
A study group appointed by Kerkorian and headed by Lloyd-Jones recommended recently--after an intensive study of Pan Am's books--that Kerkorian make a major investment in the airline.
However, Christensen said in an interview Wednesday that published reports indicating that Kerkorian had already decided to make a sizable investment in the carrier were premature. "They are ahead of the news," he said.
Christensen said the union officials at Tuesday's meeting were "terrific, a very professional group of people. They are knowledgeable; they were prepared and they asked the best possible questions."
Earlier this year, the Pan Am unions--representing pilots, Teamsters, flight attendants, clerks and other workers--offered the carrier major wage and other concessions in exchange for a 20% stake in the airline and a change of management. The company refused the offer.
The union official declined to say how much Kerkorian would be willing to invest if the deal is completed but said the financier's request for concessions from the unions amounts to "more than the $180 million" worth of concessions that had been discussed earlier with Pan Am management.
All parties involved reportedly have agreed that the concessions must include changes in work rules, pay and pensions. It is expected that if Kerkorian takes over the airline the unions, in return, would get stock and seats on the board of directors.
"The Kerkorian proposals are more viable for the future of Pan Am than the management proposals," the union official said. "We are leaning toward Kerkorian."