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Union Leaders Mull Eastern Plans : Issue of Viability Called Key as Deadline Approaches

April 10, 1989|From Associated Press

WASHINGTON — Leaders of unions representing Eastern Airlines workers met Sunday to discuss the operating plans of the carrier's prospective new owners amid signs of progress in the talks, but continued questions about the viability of the buyers' plan.

The unions have been meeting with the prospective buyers, a group led by former baseball commissioner Peter V. Ueberroth, throughout the weekend but took time Sunday morning to discuss among themselves the Ueberroth group's plans for the strikebound airline.

One labor official close to the talks said the operating plan, including employee involvement in management decisions, was the major issue remaining in the discussions, which began Friday.

No 'Stumbling Block'

"The viability issue is a significant one," said the official, who spoke on the condition of anonymity. "I don't think there are problems of any significance except the viability issue."

That statement suggested that the unions and the Ueberroth group have settled or are near agreement on wage and other concessions sought by the buyers in return for giving Eastern employees a 30% ownership stake in the carrier.

But the official refused to discuss that issue further except to say, "I don't think the economics in any way are going to be a stumbling block."

Ueberroth's $464-million purchase agreement with Texas Air Corp. allows him to call off the deal if he does not reach new contract agreements with the unions by midnight Tuesday.

Talks between Ueberroth's representatives, led by James Thomas Talbot, and the three unions have been under the guidance of attorney David Shapiro, who is overseeing Eastern's affairs in his role as court-appointed examiner of the bankrupt airline.

Shapiro has imposed a news blackout on the negotiations and neither side has made official comments on developments. A representative of the Ueberroth group could not be reached to discuss the union official's characterization of the discussions.

If new contract agreements are reached, the Ueberroth group still would need a federal bankruptcy judge's approval of the sale.

The Ueberroth group and Eastern workers--those represented by the unions as well as non-union contract employees--each would own 30% of the airline with the remaining 40% sold publicly through stocks.

Entering the weekend talks, union officials said they wanted assurances that Ueberroth had a viable plan for restoring the airline to its pre-strike service level and no further plans to sell off Eastern assets.

Ueberroth agreed to give Texas Air $79 million in Eastern assets, principally landing slots and a gate at New York's LaGuardia airport, as part of the purchase and also has said he will complete plans to sell Eastern's Northeast shuttle routes to developer Donald J. Trump for $365 million.

In a related matter, Trans World Airlines Inc. and Carl C. Icahn responded Sunday to a suit filed Friday by Texas Air, charging that the rival carrier and its owner had illegally interfered in the talks between Ueberroth and the unions.

Suit Called 'Frivolous'

TWA and Icahn said in a statement that the suit was "frivolous."

"The contacts I had with Eastern unions were initiated by their request that I become involved," Icahn said. "I did not realize that I needed permission from (Texas Air Chairman) Frank Lorenzo to take phone calls from people I consider my friends."

Icahn also said he did not make any competing offer to the unions or a creditors committee, which must approve any sale of the airline, and that he would not do so unless Ueberroth's offer falls through.

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