Two of the major unions at United Airlines remain deeply divided over possible employee participation in a buyout of the company. While the pilots seem poised to participate in a buyout, the machinists said they may block such a deal or pitch a recapitalization as a fallback.
The pilots could find division within their own ranks when their leaders meet Tuesday and Wednesday in New York to discuss the takeover of UAL Corp., Chicago-based parent of United.
Some United pilots expressed concern Monday that the union`s leaders are so eager to participate in a UAL buyout that they might grant too many concessions to UAL management.
The timing of the meeting has prompted speculation that the pilots and UAL`s management may be trying to put together a buyout deal that could be presented to the UAL board this week.
Some takeover speculators said Monday they anticipated such a bid might be in the range of $290 to $300 a share, if not higher. There was an unconfirmed rumor that UAL`s financial advisers were sounding out Far Eastern investors about participating in such a bid.
Last Friday, Los Angeles billionaire Marvin Davis asked the UAL board to act on his $275-a-share, or $6.19 billion, takeover proposal for the company by Thursday. It is presumed the UAL board will convene before Davis` deadline. On the New York Stock Exchange, UAL shares closed Monday up $3.50 a share at $281.50.
The United chapter of the Air Line Pilots Association declined to comment on the meeting in New York this week by its 27-member master executive council, except to say it would deal partly with the UAL takeover situation.
For the last two years, F.C. Dubinsky, chairman of the council, has been pursuing an employee buyout of UAL, to be led by the pilots but with all employees together having majority control. He has had little luck interesting UAL management or other United unions in the plan.
Dubinsky and one or two other pilot officials are believed to have spent much of the last two weeks in New York working with their financial advisers and UAL representatives on a buyout plan. The rest of the council has been kept in the dark about the negotiations, but presumably will be enlightened Tuesday.
Some United pilots are concerned that Dubinsky might ask the union to accept sweeping contract concessions in return for UAL stock. If the concessions involve deep cuts in pay and pension contributions, Dubinsky could face opposition from his membership, some pilots said.
”People think Dubinsky has been listening to bankers and lawyers so long he`s starting to think like them and not like a pilot,” said a pilot, who asked not to be named.
In the absence of support from other United unions, the pilots might have to assume a heavy financial burden through contract concessions if they decide to team up with management in a buyout bid.
In a letter Friday to the UAL board, United`s machinists said they favor maintaining UAL in its current form and will ”vigorously oppose any buyout and/or restructuring transaction,” especially one that endangers job security of machinists.
However, the machinists said they may propose, as a fallback, a recapitalization of UAL. They proposed a similar plan when NWA Inc., parent of Northwest Airlines, was put up for sale.
NWA was sold to an investor group, and the machinists` plan was never acted on.
