United Airlines won labor peace Monday, though it may last only a few months, when two of its largest unions agreed to millions of dollars in concessions, and a bankruptcy judge imposed a short-term contract on a third.
Judge Eugene Wedoff ordered a temporary 10 percent pay cut for workers in the mechanics union after United’s attorney argued the financially ailing carrier needed the reduction immediately.
The Elk Grove Township-based airline’s pilots and flight attendants agreed to new contracts that cut pay and changed work rules.
But those concessions were not enough, said attorney Alexander Dimitrief, who maintained that unless the mechanics’ pay was cut, the airline’s effort to emerge from bankruptcy could collapse.
“We’re so close, we just need this court’s help,” he said.
Last week, members of the Aircraft Mechanics Fraternal Organization authorized a strike if the court imposed pay cuts. But union spokesman David Quinn said afterward that workers will not take any action unless the reductions are made permanent.
Quinn said the union is willing to resume talks with United.
“We intend to keep performing the high-quality work we’re performing now,” said Quinn. “Flight safety is not a bargaining issue.”
The deal the mechanics rejected would have cut their pay by 5 percent, while aircraft cleaners would have seen a 10 percent reduction, in addition to making work rule changes and outsourcing some work.
Wedoff issued his ruling after listening to attorneys for the union and airline for about an hour. He thanked United’s workers for their “extraordinary sacrifices.”
The mechanics were the only bargaining unit to reject a deal reached, although others made clear they accepted wage and benefit cuts only because they believed such moves were needed to keep United flying.
The union members who accepted the cuts Monday still are feeling the sting of $2.5 billion in pay and benefit givebacks they shouldered in 2003.
“We will be relentless and steadfast in holding management to an unprecedented degree of accountability, as they now have all of the tools they claim they need to exit from bankruptcy,” said Capt. Mark Bathurst, a pilots union leader, in a statement. Of its members who cast votes, 75 percent agreed to a 12 percent pay cut.
Flight attendants, who agreed to a 9.5 percent wage cut, also put the onus on management. The union narrowly approved the new pact, with 56 percent voting in favor of the contract.
“Indeed, this narrow vote is saying to management [that] flight attendants have sacrificed enough, and we will not allow this management to extract any more,” said union chief Greg Davidowitch in a statement.
United has said it needs to shave $725 million annually in labor costs. Cuts also have come from non-union workers and two small labor groups, representing meteorologists and dispatchers.
The baggage handlers, ramp workers and reservation agents represented by the International Association of Machinists and Aerospace Workers are operating under a temporary 11.5 percent pay cut, while the union continues to talk with United. Their deal expires in April.
The 10 percent pay cut for the mechanics will affect about 7,000 workers. It takes affect Tuesday and runs through May. The temporary cut will save the airline $21 million.
UAL Corp., United’s parent, filed for bankruptcy protection in December 2002. In the more than two years since, the airline has lost billions of dollars, including $1.6 billion in 2004.
While United’s management continues contract talks with the mechanics and machinists unions, it is also in discussions with all labor groups to terminate pension plans and replace them with less costly retirement options, such as a 401(k).
The flight attendants union, which said its workers now have the same pay levels they had in 1991, urged management to find an alternative to killing the pension program.
Davidowitch said the members “demand that current management develop a bankruptcy exit strategy that does not destroy the hard-earned pensions our members are counting on for retirement security. That would be one sacrifice too many.”
