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US Airways Permitted to End Labor Contracts

A bankruptcy judge will allow US Airways to void contracts with its machinists as a last ditch effort to save the company.  The ruling also will permit the airline to terminate pension plans.  The machinists will have an opportunity to vote on the company’s final contract proposal, but it is expected that the contract will not be ratified. 

Voiding contracts, not seen in the airline industry since the Frank Lorenzo years at Continental, is equivalent to a cancer patient trying an experimental treatment in Mexico—sure it may work, but it’s a move made in desperation. 

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