Eastern Won’t Accept Binding Arbitration in Contract Dispute

MIAMI — Eastern Airlines on Tuesday rejected binding arbitration in the 16-month-old contract dispute with its largest union, setting the stage for a 30-day deadline in management’s showdown with the Machinists.

“In a very real sense, the stakes for Eastern are so fundamental, so very directly tied to whether Eastern can survive, that the company cannot in such a situation allow a third party (or an arbitration board) to make those decisions,” Tom Matthews, Eastern senior vice president for human resources and chief negotiator, wrote to the National Mediation Board.

The federal board began mediating the Eastern-Machinists talks one year ago. Under its rules, the refusal of one of the two parties to submit to binding arbitration will lead to declaration of an impasse. That triggers a 30-day “cooling-off period.” If there is no settlement, the union may strike and the company may impose its own work conditions on the union employees.

‘Urgent Incentive’

Bill Gill, an NMB official in Washington, said the board members would meet later this week and presumably will declare an impasse.

President Phil Bakes said in a statement he is “guardedly optimistic” that a settlement can be reached under the pressure of a deadline, which the company has sought for months.

“A firm deadline is a very real and urgent incentive for both the company and the union to work out differences,” Bakes said.

Machinists District 100 President Charles E. Bryan, who has charged that the company wants a strike so it can try to break the strike and bust the union, wasn’t immediately available for comment Tuesday. His office said he would hold a news conference later.

NMB Chairman Walter C. Wallace on Jan. 9 halted the special mediation he was directing between the two sides after 3 1/2 days. Wallace had joined mediator Harry Bickford in Key Largo, Fla., for an intense effort to resolve the contract.

The company, which is seeking $150 million in wage concessions from the 8,500-member union, estimates that it is losing $1 million a day.

Eastern is awaiting completion of a $365-million sale of its Northeast shuttle service to New York developer Donald J. Trump and has said it must sell other assets to stay afloat unless it can reduce labor costs.

$50-Million Raise

Houston-based Texas Air Corp., which began taking over Eastern nearly three years ago, also owns Continental Airlines, a non-union carrier.

Wallace returned to Washington after 3 1/2 days at Key Largo and explained in a statement Tuesday that mediation couldn’t be carried out “in a fishbowl.” He blamed violations of a news blackout but didn’t cite either side.

The Machinists, representing mechanics, baggage handlers and other ground service workers, or more than one-fourth of Eastern’s employees, were seeking a $50-mllion raise, the company said.