Union Accord Clears Way for Purchase of PSA : USAir Extends Deadline to Allow Teamsters Members to Ratify Contract Changes

SAN DIEGO —  Pacific Southwest Airlines and Teamsters Union Local 2707, which represents 3,800 PSA employees, reached tentative agreement Wednesday on labor contract changes that clear the way for USAir Group to conclude its $400-million purchase of PSA.

The tentative agreement came just one day before a deadline set by USAir, which had threatened to abandon the deal if San Diego-based PSA failed to negotiate modifications in labor contracts with unions representing 4,800 of its employees. USAir on Wednesday extended that deadline until May 17, USAir spokesman David Shipley said, to allow time for Teamsters members to vote on the agreement.

The contract changes were agreed to by the leaders of Local 2707 and now must be ratified by 3,800 Teamsters-represented PSA employees at 28 locations in six states. The union is likely to hold the vote by telephone in order to meet the May 17 deadline, Local 2707 Secretary-Treasurer Marvin L. Griswold said Wednesday.

Only Possible Roadblock

Final agreement by PSA and the Teamsters is the only possible roadblock in the path of the merger. Three other unions representing PSA employees have already agreed to USAir’s demands and airline shareholders and federal regulators have approved the sale.

The Teamsters have tentatively agreed to drop so-called “successor clauses” in four contracts covering PSA’s flight attendants, mechanics, station agents and reservations agents. The contracts had guaranteed that the union would continue to represent its members after a merger with USAir.

The Teamsters represent just 1,500 of USAir’s 15,700 employees and it is now unlikely that the union will represent present PSA employees after they join USAir when the two carriers merge.

USAir’s flight attendants are represented by the Assn. of Flight Attendants and its mechanics by the International Assn. of Machinists. USAir’s baggage handlers, reservations agents and ground personnel are not represented by unions.

In return for their agreement, the Teamsters said they negotiated a $3.2-million trust fund that will make severance payments to employees of both PSA and USAir who do not accept out-of-town transfers brought about by the merger. The fund will also help pay for out-placement services.

‘Sigh of Relief’

PSA employees were “breathing a collective sigh of relief” when word of the tentative agreement went out shortly after 1 p.m. Wednesday, according to Robi McCord, a ticket counter employee at John Wayne Airport in Orange County. “This was the last major hurdle, the last monkey on our back, as far as this deal going through,” she said.

PSA’s Teamsters-represented employees will give “overwhelming support” to the agreement, predicted Carol Austin, a PSA flight attendant who was at San Diego’s Lindbergh Field when the agreement was announced. “There’s a real celebration going on here.”

More than 100 employees at PSA’s reservations center here “stopped taking calls, stood up and applauded” when the accord was announced, said Nancy Leavenworth, a 14-year PSA employee. “This means PSA will survive, because we wouldn’t have survived alone as a regional carrier.”

Had the deal not gone through, PSA would have faced a “lowering and restructuring of its costs,” and possibly, a halt of service to one or more of the cities it now serves, according to documents the airline filed earlier with the Securities and Exchange Commission.

The Teamsters and PSA began negotiating in February but the most recent round of talks began only last Friday, according to Griswold, who said he “never had a doubt in my mind that we’d reach agreement. The only question was if USAir would give us time to put this thing to a vote by the membership.”

USAir also has agreed to buy Piedmont Airlines, headquartered in Winston-Salem, N.C., for $1.65 billion. However, the U.S. Department of Transportation has scheduled full hearings on the deal because the states of New York, West Virginia and Massachusetts have complained that it would lessen competition.

Times staff writer Robert E. Dallos in New York contributed to this story.