United mechanics reject contract deal

Mike Colias

Friday, Jan. 28, 2005 | 11:14 a.m.

CHICAGO -- United Airlines' mechanics union announced today that its members rejected a tentative contract agreement, dealing the carrier a setback in its efforts to cut labor costs without alienating its workers.

Members of the Aircraft Mechanics Fraternal Association also voted to authorize a strike if United succeeds in its efforts to get a federal bankruptcy judge to impose its own terms, union spokesman Richard Turk said.

The union represents about 7,000 United mechanics. Vote totals were not announced.

The contract, agreed to earlier this month by negotiators, would have cut wages by 5 percent for mechanics, followed by 1.5 percent annual pay increases through the life of the contract. About 570 employees who clean aircraft cabins would have seen their wages cut by 10 percent.

United pilots and flight attendants are conducting similar contract ratification votes, with the results to be announced Monday.

The union representing baggage handlers, ramp workers and public-contact workers faces an April 11 deadline for negotiating a pact after a short-term deal was put in place this month.

United is seeking to rewrite all its labor contracts to save costs for the second time in its 26-month bankruptcy. After slashing labor costs by $2.5 billion annually in 2003, the Elk Grove Village, Ill.-based airline says it needs another $725 million in yearly reductions.

The nation's No. 2 carrier also wants to eliminate its traditional pension plans and replace them with defined-contribution plans, a move that has inflamed unions and prompted dismay from the federal Pension Benefit Guaranty Corp., which would be expected to take responsibility for up to $6.4 billion of United's pension liabilities.