Negotiations between Pan American World Airways and representatives of 4,500 Teamsters Union workers broke off Sunday afternoon in New York and a union leader vowed to disrupt company operations using "guerrilla warfare."
Nonetheless, the union put off a call for a strike. And Pan American officials declared that they would keep all flights operating, regardless of what the Teamsters do.
The union originally had set a 12:01 am. Sunday deadline for a strike if a new agreement had not been reached. However, the two sides negotiated five hours past that deadline. Then, after an eight-hour recess, talks resumed but broke off shortly thereafter when the company rejected a proposal to arbitrate outstanding issues, according to a Teamster spokesman.
"We can strike any time we want," said William Genoese, director of the Teamsters airline division. He would not say when a strike might come. "We'll do it when it hurts them the most," he said in a telephone interview.
Additionally, Genoese said Teamster workers, who include reservationists, ticket takers, clerical workers and some fueling personnel, would engage in "guerrilla warfare" in a variety of ways in an attempt to exert leverage on the company.
He said this could include working at a slower pace than normal, declining to correct co-workers' mistakes and treating travel agents rudely. "We are at war with them, complete warfare," Genoese said after the talks broke down.
Asked if the company was concerned about disruption, Alan Loflin, a Pan Am spokesman, said "we'd prefer to have the Teamsters at work. But with them or without them, we'll operate to all destinations." Pan Am flies to 31 locations in the United States and 66 points abroad, he said.
On Sunday, the company lowered wages and imposed new work rules that will give Pan Am greater flexibility in deploying personnel.
Loflin said that Pan Am has lined up a force of substitute workers in the event of a strike and promised these individuals permanent jobs. He said the company also has warned its Teamster workers, verbally and in writing, "that it is highly likely any job abandoned in a strike action will be permanently filled by a replacement."
The labor dispute centers on Pan Am's attempts to reduce its costs by wresting $35 million a year in cuts from the Teamsters over the next three years. The company said it needs these concessions as part of an overall effort to save $540 million over the next three years to make the financially ailing carrier more competitive.
In recent months, Pan Am has garnered about $81 million from its flight engineers, $93 million from its flight attendants and $174 million from its pilots. The company's mechanics are expected to settle with the company shortly and make concessions in the neighborhood of $90 million, according to airline analysts.
George Miranda, vice president of Teamsters Local 732 in New York, said the union offered concessions of $25 million to $28 million a year over the next three years, about $7 million to $10 million less than the company was demanding.
Pan Am's Teamster workers are paid an average of $23,000 to $25,000 a year, Genoese said. In the last seven years, the only increase they have had was a 25-cents-an-hour cost-of-living hike in 1983.
Once the glamour company of the United States airline industry, Pan Am has fallen on hard times in recent years. In 1981, the company sold its Intercontinental Hotels unit for about $500 million in an attempt to offset losses. Then in 1985, the company sold its Pacific routes, which it pioneered with its Clipper ships in the 1930s, to United Airlines for about $750 million.
But the financial hemorrhaging continued. In 1986, Pan Am lost $462.8 million and the red ink kept running in 1987 as Pan Am lost another $265.3 million. Company Chairman C. Edward Acker and other Pan Am executives were criticized by union representatives and financial analysts for reacting slowly to downturns in airline traffic at certain periods and for failing to rapidly shift planes to other markets.
Ousted by Board
On Jan. 21, Acker and other company officials, including C. Raymond Grebey, the company's hard-nosed chief of labor relations, were ousted by the company's board. Thomas G. Plaskett, formerly president of Continental Airlines, was named to succeed Acker.
The Teamsters hoped that the change would lead to a reduction in the company's demands for concessions, but it soon became apparent that it would not. As early as Feb. 6, Genoese announced that he expected a strike on Feb. 22, when a federally mandated 30-day cooling off period expired.
The Teamsters face some significant problems in having an impact on the company. The pilots, the engineers and the mechanics all have said they would continue working in the event of a strike. The flight attendants have not stated their intentions, but it is anticipated that they are likely to continue working because they have already granted substantial concessions to the company.
By breaking off talks and implementing lowered wages and changed work rules Sunday, Pan Am has served notice that it believes that it has the upper hand, according to financial analysts. "They're calling Genoese's bluff," said John Pincavage, an airline analyst with Paine Webber in New York.
The Teamsters represent Pan Am workers at airports in Boston, Chicago, Detroit, Honolulu, Houston, Los Angeles, Miami, Orlando, San Diego, San Francisco, Seattle, Tampa and Washington. The vast majority are employed in New York and Miami.