August 26, 2002 >
US Airways, the airline that filed for bankruptcy-court protection two weeks ago, has its employees upset over $6 million in bonuses it plans to start paying to midlevel and senior executives in October.

Word of the payments comes as the airline prepares to slash costs elsewhere by cutting flights, reducing the number of jets it flies, laying off employees, and reducing the pay of the employees who remain, according to USA Today.

"That's just unbelievable," Debby Rater, who cleans airplanes at US Airways' Charlotte hub, told the newspaper. "It's like they're taking everything from us to supplement their income. We're trying to figure out if we can afford to stay in our home."

USA Today notes that employees will vote Wednesday on concessions that would cut their pay by at least 8 percent. The $6 million, she says, makes them want to vote down the proposal and take their chances with a bankruptcy judge.

But US Airways executives say the money is being paid partly because it's owed; about 500 employees, including lawyers, financial analysts and marketing staff, were promised bonuses for their performance in 2001 (when US Airways lost nearly $2 billion.)

In addition, they contend the bonuses will help retain employees who are vital to running the airline. US Airways' turnover rate has tripled among key managers, as headhunters circle "like vultures," says spokesman Chris Chiames. Under this arrangement, employees would collect as long as they stay.

Union officials tell USA Today they're repeatedly explaining the bonus payments to members in meetings leading up to the vote.

"It does not look good when they're giving $6 million in bonuses to certain people and asking others to take significant wage reductions at the same time," says machinists' union spokesman Joe Tiberi. "But if the entire upper management were to quit ... the company could not operate."

Links

• USA Today article
  
• From the HR.BLR.com Library:
  
  • Layoffs & Shutdowns
    
  • Incentives/Recognition