Icahn Won’t Say Why : TWA Suspends Labor Talks; Union Cites Merger Possibility

ST. LOUIS —  Trans World Airlines Inc. has suspended contract talks with its largest union because of the possibility of a merger or change in management at the airline, a union spokesman said Friday.

The company, owned by takeover specialist Carl C. Icahn, confirmed that the talks had been halted but refused to say why.

Icahn had previously expressed interest in buying strikebound Eastern Airlines and had been in extensive talks with that carrier’s unions.

His interest recently has shifted to other possible combinations, according to a machinists union official.

“Carl’s been shopping that airline (TWA) now for the past couple months,” said John Peterpaul, vice president of the International Assn. of Machinists. “If he’s got a buyer, we’re not going to impede that . . . unless it’s a bad deal,” he said in a telephone interview from Washington.

Possible Strategy

A TWA memo sent to management employees late Friday said it would be premature to speculate about a merger.

“As you are aware, the subject of combination or merger of TWA has been discussed from time to time over the last several years and continues to be one of several possible strategies for TWA,” Jerry Nichols, executive vice president and chief operating officer, wrote in the memo.

“For us to speculate on any such possibilities at this time would be premature,” Nichols said.

Contract negotiations broke off Thursday, according to David Schulte, secretary-treasurer of Local 949 of the machinists union District 142.

Committee Informed

Schulte said he received a bulletin from the union’s district office in Kansas City, Mo., about the halt in negotiations.

The bulletin said TWA had informed the union’s negotiating committee of the “possibility of a corporate change in TWA as a result of a combination or merger of the airline.”

The machinists union represents mechanics, reservation clerks, janitors and other on-ground personnel. Its contract with the airline expired Dec. 31 and employees have been working under a temporary contract.

Schulte said the union has been negotiating since last fall.

“We don’t know whether he’s (Icahn) looking to buy or looking to sell, we don’t know,” said Schulte.

Both sides agreed to meet within 10 days to review the situation.