Pan Am Scuttles Asset Sale After Pact With Union
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NEW YORK — Pan Am Corp. reached a tentative labor agreement Friday with leaders of its biggest union and, in return for the pact, withdrew its threat to sell its principal subsidiary, Pan American World Airways.
Pamela Hanlon, a spokeswoman for the airline holding company, said the Transport Workers union and the company had agreed on a wage freeze rather than the 10% pay cut the company had initially sought.
Hanlon, in comments to the Associated Press, would give no further details on the cancellation of the threat of asset sales. On June 8, the company’s directors said that because they had been unable to obtain sufficient wage concessions they were putting “any of the assets” of the airline on the block.
The agreement with the Transport Workers, covering about 5,200 mechanics, aircraft service personnel and flight dispatchers, must still be ratified by the union membership. It would save the airline about $81 million over the next three years.
“This is a crucial development in Pan Am’s plan for financial recovery,” Chairman Thomas G. Plaskett said.
The Transport Workers union is the third of the five unions at Pan Am to sign a new cost-saving contract with the carrier, which is still seeking $90 million in wage reductions from its flight attendants and has imposed $35 million in cuts on the Teamsters under federal labor rules.
Pan Am said it will now direct its efforts toward reaching an accord with the flight attendants.
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