NEW YORK Trans World Airlines chairman Carl Icahn is negotiatinga deal to turn control of troubled TWA over to employees andcreditors in exchange for concessions, spokesmen confirmed today.
TWA has been operating under Chapter 11 bankruptcy protectionsince January and reportedly has been losing $1 million a day.
The Wall Street Journal reported this morning that union leadersand TWA executives met on Sunday to work out details of a plan inwhich employees would get 45 percent of the company's stock inexchange for a 15 percent wage cut and work-rule concessions.
Tim Connolly, spokesman for the Machinists union, and DonFleming, TWA spokesman, confirmed the details of the Journal storyand said talks continued this afternoon.
TWA's creditors would forgive about $1 billion of the $1.5billion in debt in exchange for the remaining 55 percent of thestock.
Icahn, one of the biggest corporate takeover strategists of the1980s, would step down as chairman and remain involved with TWA as aninvestor only.
Connolly said the union's 15,000 members at TWA have alreadyagreed to the plan in principle.
"Somebody has to make a move, so we figured we'd do it," he toldthe Journal. "We're sitting like an ice cube waiting to melt. Wehave to do something."
TWA, based in Mount Kisco, N.Y., has suffered from a weakdomestic route network, the recession-induced travel slump, and thedebt incurred when Icahn took it over in 1986.
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