The Asian Wall Street Journal
Thursday, September 17, 1998
By the Associated Press News Service
MANILA – The ground-crew union of ailing Philippine Airlines reversed its decision to accept an agreement aimed at helping the carrier survive, said officials.
PAL’s Vice President, Manolo Aquino, said the Board of Directors of the PAL Employees’ Association decided to reject the offer by the company’s Chairman and majority owner, Lucio Tan.
The offer would have given workers three board seats and PAL stock in exchange for a 10-year suspension of their collective-bargaining agreement.
Mr. Aquino said the PAL Employees’ Association, the airline’s largest union, accused the management of “many things that are not true,” but declined to elaborate.
The proposed accord had been described as a last-ditch move to prevent the closure of the 57-year-old airline.
Mr. Aquino, however, said immediate decision to close the company has been reached and officials were to meet on the matter.
Calls to the union’s president, Alex Barrientos, went unanswered.
Under the proposal made last week, Mr. Tan offered to give 20% ownership of the company to its employees, which would allow them three seats on the airline’s 15-member board of directors.
Each employee would receive 60,000 shares of stock valued at 300,000 pesos ($6,869) from the Tan group’s shareholdings in PAL. They wouldn’t be allowed to sell their shares until their retirement.
The company also pledged to refrain from cutting salaries and medical benefits, and to rehire retrenched union members who haven’t received separation pay.
The airline posted losses of 2.2 billion pesos ($50.4 million) in the first three months of the year beginning April 1, mainly because of work stoppages.
A 22-day pilots’ strike in June caused the heaviest damage, creating revenue losses of about 200 million pesos per day, said PAL.
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