Clock ticking at United, still no deal with unions

UAL777flyer

Veteran
Aug 20, 2002
730
0
As much as I understand and agree with not commenting to the press about the status of negotiations for concessions, it is extremely frustrating that employees are getting absolutely ZERO information regarding progress or anything. I also realize that there is a limit to what they can comment on, but at a time like this, it is vitally important to communicate with the workforce. We've heard zero from Tilton since the unions gave him their proposal. I do understand his and the unions' desire to keep the negotiations out of the public eye, but the frustration level is so thick you could cut it with a chainsaw.
 

UnitedChicago

Veteran
Aug 27, 2002
756
0
www.usaviation.com
October 09, 2002
Clock ticking at United, still no deal with unions
(Reuters) — It''s autumn, the time when United Airlines said it might file for bankruptcy, but despite a labor offer of $1 billion a year in cost cuts, management and unions still have not struck a deal that will keep the giant airline out of court.

The clock is ticking toward a Nov. 17 debt payment United must make, and much work must be done between now and then to keep the carrier out of courts, said people familiar with the situation. A bigger payment is due in December.
The airline announced last week it would suspend payments on some debt/equity hybrid securities. United has cash, $2.7 billion as of June, but much of it is already committed.
The airline lost an aviation history record $2.1 billion in 2001 and another $850 million in the first half of 2002. The third-quarter loss, also expected to be large, will be announced next week.
After a brief recovery in the industry in April, the revenue picture for U.S. airlines worsened in late summer and early autumn, and cash burn rates at some airlines are once again a problem, executives have said. Higher jet fuel prices, fears of war in Iraq, cheap fares and a continued depression in travel demand add to the difficulties.
THE TO-DO LIST
Generally, rank-and-file workers get 30 days to approve contract changes hammered out by negotiating committees. At some unions, that time period may be accelerated.
United, a unit of Elk Grove Township, Illinois-based UAL Corp. must also resubmit information to the Air Transportation Stabilization Board on its application for federal guarantees on $1.8 billion of a $2.0 billion loan.
The board must then approve the request, an event which in itself is far from certain. The controversial agency has denied many applications, particularly from smaller airlines, and approved others only after tough conditions.
In United''s case, as was true with US Airways Group data and concessions are requested through 2008, sources said. Under particular discussion now is the picture for 2003 and 2004.
United spokesman Joe Hopkins on Wednesday declined to comment on the progress with a five-union coalition or when any announcement might be made. UAL shares on Wednesday were 12 cents, or 5.77 percent, lower to $1.96, near the low point of $1.90 hit after the bankruptcy warning this summer.
SECTOR UNDER FIRE
The airline sector was hard-hit again on Wednesday, after a Wall Street analyst downgraded the entire group and cut his rating on the No. 1 U.S. carrier, American Airlines parent AMR Corp. AMR shares sank to yet another new low of $3.46 after losing 75 percent of their value in the third quarter.
United initially asked the government for loan guarantees in late June, but said the cost cuts outlined were not enough to satisfy the agency, created after the Sept. 11, 2001, attacks sent the industry into an unprecedented downturn.
United then went back to labor unions in August and said it wanted $1.5 billion a year in cost costs for six years. Unions balked, formed their own coalition and after several weeks, put a new offer of $1.0 billion for five years across the table.
So far, United has not commented on the proposal officially, but sources said about a week ago the airline had gone back to the coalition with a request for something in between the $1.0 billion and $1.5 billion.
COALITION FRAGILE
Publicly, the unions will only say they are talking to each other and the company. Behind the scenes, people with long involvement in the airline are trying to hold together a fragile coalition between the five unions as it works to put together a package the government will like.
A sticking point —perhaps the most critical issue now — is how much each union will give up. No one wants to be seen as sacrificing too much compared to another group.
In addition, a long history of labor strife and fiercely independent unions make it a tough task.
The International Association of Machinists, representing the largest percentage of the roughly 84,000 workers at United, may be considering offering its own proposal to management, sources said. A union spokesman declined to comment other than to say there was nothing new to report.
The Air Line Pilots Association was the only one of the major labor groups to offer United any concrete figures back in June, when its agreed to 10-percent wage cuts in return for stock options and raises down the line.
 

UnitedChicago

Veteran
Aug 27, 2002
756
0
www.usaviation.com
UAL777Flyer:

I can only imagine how frustrating it must be for all of you at United. I've been scouring the net for any information and been frustrated...but the tension must be so thick at UA. Hang in there.

It is interesting that both sides - Management and Labor - have been equally tight lipped. Glass half full would say this shows that there is mutual respect and good faith negotiations going on. Otherwise...either side would love to use the press and the stock market to light respective fires.

I won't go into the glass half empty - we all know what those points are. :)

Hang in there all!