10 Per Cent Wage Cut Won't Fly Canadian for 10 Days

10 Per Cent Wage Cut Won't Fly Canadian for 10 Days

It's No Solution

CAW Says "No" To Wage Cuts!

We Already Gave

Canadian Airlines is in financial difficulty. The company wants the employees to take an additional 10 per cent wage cut for the next 4 years. The company says that employees must show their commitment to the corporation, so CAI will be better positioned to negotiate financial relief with the key players: the Royal Bank, AMR, the federal government, the Alberta and B.C. governments.

CAI EmployeesCommitted

The fact is that for the past 5 years, employees have made tremendous contributions to the company. The company's own statistics say a lot. Since 1991, over 1,000 employees have lost their jobs and those still with the company are working harder than ever:

  • the available seat miles increased 40 per cent
  • revenue per employee increased 38 per cent

The workers have given the company a big reduction in labour costs:

  • labour costs in 1995 are only 26.4 per cent of operating revenues compared to 31.2 per cent in 1991.(Source: 1995 CAI Annual Report)
A History Of Giving

At each financial crisis, the company has demanded concessions from the workers. CAW members have responded each time:

Company needs wage cuts for AMR investment; CAW members give 5 per cent wage cut for 36 months.

Company needs bridge financing for AMR investment; CAW members temporarily increase their wage reduction to 10 per cent.

Company needs to cut costs; CAW enters early bargaining and accepts work rule changes equivalent to 17 per cent payroll reduction ($17.1 million savings) with no wage increases for the term of the 3-year agreement.

CAW members have shown their commitment to the airline. In addition to working hard under stressful conditions, members have agreed to have their wages cut or frozen for 8 years.

Equality Of Sacrifice?

Members at CRAL, making as little as $9 an hour gave up wages, while former CEO Kevin Jenkins enjoyed a salary of $370,000. The Royal Bank topped the banks with 1995 profits of $1.3 billion; John Cleghorn, the bank's executive officer, made $2.3 million (including stock options) for his year's work.

AMR reported profits of $167 million and expects to do even better in 1996. Robert Crandall had his pay boosted to $750,000 this year with an additional $300,000 "incentive" plus a yet-to-be-decided bonus and $1.6 million in shares.

These are the people who think airline workers should take another cut in pay.

Labour Isn't The Problem

A further 10 per cent wage cut obviously isn't the solution. It will not solve the problems of Canadian Airlines. The company expects to get about $75 million per year from the employees. But 1995 operating costs averaged $8.7 million a day. The "10 per cent solution" is not even a "10-day solution".

And from past experience, we know where our sacrificed wages will go: special discount fares to fight off a low-cost new entrant; flying empty seats 15 minutes before the competitor in order to win the route.

And what happens in 1998 when the Open Skies agreement pits Canadian carriers head on against U.S. mega-carriers on the 3 major cross border routes?

CAI cannot even say that wage cuts are a strategic part of a well-designed business plan. The 10 per cent wage cut isn't about saving an airline. It's a quick grab to cheapen airline labour on the way to negotiations with AMR and the Royal Bank.

CAI's labour costs are already lower than it's major competitor. Labour costs aren't the problem.

What Is The Solution?
The Federal Government Must Act

The federal government must recognize the harmful effects of its transportation policy. The cut-throat competition of deregulation over the past decade has taken its toll on airline workers. The government cannot stand by as Canadian workers continue to bear the brunt of a bad policy.

Say "No" To Wage Cuts!

CAW Local 1990 President Anne Davidson met with the Bargaining Committee and Executive Board to discuss the proposal to open the collective agreement and take a 10 per cent wage cut. The proposal was rejected unanimously.

At a later meeting CAW President Buzz Hargrove gave his whole-hearted support to the decision of Local 1990.

Here's what you can do:

- Tell the company that CAI employees' wages and benefits are not the problem.

- Let your co-workers know that you intend to stick together and refuse any further wage cuts.

- Attend the CAW Local 1990 information meeting.

Meeting Schedule

November 7, 1996 Toronto
November 8, 1996 Vancouver
November 12, 1996 Calgary
November 13, 1996 Montreal
November 14, 1996 Ottawa
November 15, 1996 Halifax
Novemer 18, 1996 Edmonton
November 19, 1996 Winnipeg
November 20, 1996 Regina
November 21, 1996 Saskatoon

Notices will be distributed with further details.

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