United, unions get deadline to cut deal
By Mark Skertic
Tribune staff reporter
Published November 20, 2004
here
Union leaders and United Airlines have a January deadline for reaching a deal on wage and benefit cuts the airline says are necessary to emerge from bankruptcy.
U.S. Bankruptcy Judge Eugene R. Wedoff has scheduled hearings for Jan. 7 or 10--which has not been determined--to consider whether the court should impose contract changes if United and its unions are unable to agree on reductions.
United has told its six unions it needs an additional $725 million in annual savings and the replacement of the pension plan with a less-expensive defined-contribution plan to bring costs in line with expenses.
Talks are in various stages with each of the unions, Chief Financial Officer Jake Brace said during a break at Friday's hearing, although he declined to characterize them.
Brace said that some labor leaders' criticism of United's push for wage and benefit cuts is counterproductive to the airline's efforts to emerge from bankruptcy.
"We ought to be sitting down at the table and working out our issues," he said. "We have a real need to cut our costs; the need is urgent."
As expected, Wedoff granted United's request for more time to develop its reorganization plan. The airline, which filed for bankruptcy protection in December 2002, has until Jan. 31 to work on its plan without competing plans being submitted to the court by outside investors.
The airline this month outlined a variety of cost-saving proposals to the unions that, airline executives say, will cut an additional $2 billion in expenses. Last year workers agreed to $2.5 billion in annual concessions.
The Association of Flight Attendants has been the most outspoken against United's demand for more cuts. Flight attendants working for US Airways, another airline mired bankruptcy proceedings, also are being asked for contract concessions, and this week the union warned it was considering surprise work stoppages against various carriers if the court imposes contract changes.
Such threats are not expected to affect holiday travel.
"It's not going to happen," Brace said. "Thanksgiving travel plans for anybody are perfectly safe."
The court is not scheduled to consider whether to change the contract until after the holidays.
Additionally, airline employees' work rules are governed by the Railway Labor Act, and federal regulations say a strike can't occur without permission from the National Mediation Board.
By Mark Skertic
Tribune staff reporter
Published November 20, 2004
here
Union leaders and United Airlines have a January deadline for reaching a deal on wage and benefit cuts the airline says are necessary to emerge from bankruptcy.
U.S. Bankruptcy Judge Eugene R. Wedoff has scheduled hearings for Jan. 7 or 10--which has not been determined--to consider whether the court should impose contract changes if United and its unions are unable to agree on reductions.
United has told its six unions it needs an additional $725 million in annual savings and the replacement of the pension plan with a less-expensive defined-contribution plan to bring costs in line with expenses.
Talks are in various stages with each of the unions, Chief Financial Officer Jake Brace said during a break at Friday's hearing, although he declined to characterize them.
Brace said that some labor leaders' criticism of United's push for wage and benefit cuts is counterproductive to the airline's efforts to emerge from bankruptcy.
"We ought to be sitting down at the table and working out our issues," he said. "We have a real need to cut our costs; the need is urgent."
As expected, Wedoff granted United's request for more time to develop its reorganization plan. The airline, which filed for bankruptcy protection in December 2002, has until Jan. 31 to work on its plan without competing plans being submitted to the court by outside investors.
The airline this month outlined a variety of cost-saving proposals to the unions that, airline executives say, will cut an additional $2 billion in expenses. Last year workers agreed to $2.5 billion in annual concessions.
The Association of Flight Attendants has been the most outspoken against United's demand for more cuts. Flight attendants working for US Airways, another airline mired bankruptcy proceedings, also are being asked for contract concessions, and this week the union warned it was considering surprise work stoppages against various carriers if the court imposes contract changes.
Such threats are not expected to affect holiday travel.
"It's not going to happen," Brace said. "Thanksgiving travel plans for anybody are perfectly safe."
The court is not scheduled to consider whether to change the contract until after the holidays.
Additionally, airline employees' work rules are governed by the Railway Labor Act, and federal regulations say a strike can't occur without permission from the National Mediation Board.
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