United pilots approve 29% cut in pay

Dave Carpenter

Wednesday, Jan. 8, 2003 | 9:43 a.m.

CHICAGO -- Making progress toward lowering labor costs in bankruptcy, United Airlines won three unions' approval of temporary wage cuts and began negotiating with its machinists on longer term proposals.

The carrier also hopes to gain pay-cut ratification from its flight attendants today, a day after its pilots, dispatchers and meteorologists all consented to interim, double-digit wage reductions.

The Elk Grove Village, Ill.-based airline, which filed for Chapter 11 bankruptcy last month, says it must reduce wages by $2.4 billion a year through 2008.

The pilots' union announced Tuesday that pilots had approved a 29 percent pay-cut. United dispatchers and meteorologists also announced they had ratified 13 percent cuts.

The 8,500 pilots, the most powerful and highest-paid of United's employee groups, agreed to immediate, temporary pay cuts by an overwhelming majority. Seventy-seven percent of pilots participated in the weeklong voting, and 92 percent of those approved the cuts as recommended by union leaders.

United CEO Glen Tilton said in a statement that he was grateful for the employees' sacrifices.

But in a warning that concessions may be much tougher to achieve in talks toward a long-term contract, they criticized the airline for not involving unions more in the labor cost-cutting process since last month's Chapter 11 bankruptcy filing.

Paul Whiteford, head of the United branch of the Air Line Pilots Association, called the ratification a good-faith act to help stabilize the company in the initial months of bankruptcy and provide more time to negotiate a long-term contract. But he strongly urged management to work with the union on its reorganization plan.

"We have been disappointed at management's approach to labor discussions since the bankruptcy filing, and we expect that this significant pilot sacrifice will encourage the company to engage in a collaborative discussion over a reasonable economic settlement of ALPA's contract," Whiteford said.

Flight attendants have been voting since last week on whether to accept a 9 percent wage reduction, as agreed to by union leaders.

The Machinists' union, however, has objected to United's proposal that its members take 13 percent pay cuts, saying the company has not provided sufficient evidence that double-digit reductions are needed.

United plans to file a response to the machinists in federal bankruptcy court on Wednesday.

Bankruptcy Judge Eugene Wedoff then is expected to rule later this week on whether to impose the pay reductions on the machinists -- 37,000 mechanics, baggage handlers and other ground workers.

United has said that if Wedoff doesn't impose the pay reductions on the machinists or any other union fails to ratify them, it will begin the legal process of nullifying the labor contracts and imposing new ones.

Top leaders of the International Association of Machinists and Aerospace Workers began negotiating with the company Tuesday in Chicago, although a spokesman said there was no change in the union's opposition to United's proposed temporary cuts.

"Regardless how the judge rules, United's request for long-term reductions still needs to be addressed," union spokesman Joseph Tiberi said.

United, the world's second-largest carrier, filed for Chapter 11 bankruptcy protection on Dec. 9 after losing $4 billion since the middle of 2000. It hopes to emerge from bankruptcy sometime next year.

The airline has until Feb. 15 to cut costs or it could lose the rest of $1.5 billion in interim financing from a group of banks.