UAL Must be Close to Liquidation, to Get This...

Running close to the deadline, the International Association of Machinists and Aerospace Workers (IAM) reached five tentative agreements Tuesday with United Airlines to provide the bankrupt carrier with $2.6 billion in savings over a 6-year period.

"In the history of this industry, there is no precedent for the climate in which these agreements were negotiated," said Randy Canale, District 141 President and lead negotiator, representing Ramp & Stores, Public Contact Employees, Security Guards and Food Service employees. "Nothing but the prospect of a liquidated United Airlines and the permanent loss of more than 70,000 jobs can justify such sacrifices by employees."

Huge shifts...

Details of today's recovery accords include a 13% reduction in hourly wage rates, a 20% employee co-payment toward the cost of the traditional health insurance plan and work rule changes to allow greater use of part-time employees. Total cost savings from pay, benefit and work rule changes for nearly 23,000 employees are expected to reach $445 million annually.

IAM negotiators achieved the recovery targets while preserving existing pensions, vacations and recall rights for furloughed employees. Negotiators also established a profit sharing plan and enhanced benefits for any employee whose job classification is eliminated.

Full details will be presented to IAM members at informational meetings prior to ratification voting, a process expected to take three weeks. If approved, the agreements will deflect a pending bankruptcy court motion to abrogate any unmodified labor contract at United Airlines.

"We were determined to prevent the worst effects of bankruptcy from being unilaterally imposed on our members," said Canale. "A consensual recovery plan is the best way to rebuild United while preventing a court ordered 'cure' from bringing far more painful terms for IAM members and their families."

A similar but separate agreement was also reached Tuesday on behalf of nearly 500 IAM members at Mileage Plus, Inc., a wholly-owned subsidiary of United Airlines. Voting on all agreements will be completed by April 29, following local informational meetings.

Mechanics, as usual, not in on this...

The mechanics, represented by IAM District 141-M (not to be confused with these workers, at 141), have stayed out of these talks. One may recall that, as the only major union that would yield nothing to UAL last December, their rejection of any deal was cited by many as the proximate cause of United's Chapter 11 filing, at least at that particular time (December 9, 2002). As of now, those workers, perhaps hoping the other unions will take all the cuts, have still not agreed to anything. Separate talks between United and IAM District 141-M, representing Mechanic & Related and Fleet Technical Instructors at the airline are continuing.

Last week, the Flight Attendants, Flight Dispatchers, and Meteorologists all agreed to tentative deals; the Pilots have a tentative agreement for $1.1 billion in cuts -- and the mechanics haven't done Deal One. How long the other unions, which all made earlier cost-reduction deals prior to this months' actions, will keep playing "chump" for the mechanics in this increasingly high-stakes game is the billion-dollar question.

FMI: www.iam141.org