December 27, 2002
United Airlines Bankruptcy Update
To District 141-M Represented Employees at United Airlines:
Dear Sisters and Brothers,
In an expected development, United Airlines filed an application today in U.S. Bankruptcy court for rulings that can lead to changes in wages, work
rules and benefits for IAM members and all unionized employees at United Airlines.
United petitioned the court for two rulings under Section 1113 of the U.S. Bankruptcy Code: one, (an 1113© motion) begins a process that can lead
to abrogation of collective bargaining agreements, the other, (an 1113(e) motion) seeks immediate financial relief, including a 13 percent pay cut,
effective January 1, 2003, for IAM members at United.
United stated the proposed immediate wage cuts are necessary to achieve cost reductions targets required by its Debtor in Possession (DIP)
financing terms through May 1, 2003. United’s complete 1113 application is available Click Here.
Non-negotiable pay cuts proposed by United for IAM members as ''take it or leave it'' measures was rejected by the district leadership and will not be
presented to IAM membership for ratification. The IAM will object in court to United’s application for emergency wage reductions. We have taken
this position in full knowledge that the proposed 13 percent pay reduction is just the first step in United’s cost reduction plan. United has made clear
their intention to seek major scope changes in our agreement which would necessitate a second ratification.
Representatives of other Unions at United are presenting the company’s 1113(e) pay cut proposals for a ratification vote. United has applied to the
bankruptcy court to impose their 1113(e) terms on IAM members in the event all the other unions ratify the terms proposed by United.
Also in today’s court filing, United stated that if temporary modifications are achieved, it would delay its application to seek total rejection of labor
agreements until March 15, 2003. If the temporary terms are not in place either due to rejection by the membership of any other Union or the refusal
of the judge to impose terms on IAM members, the application to reject the agreements that was filed today will go forward as scheduled.
The IAM believes United’s financial problems can best be resolved with a business plan that emphasizes negotiations and partnership with its
union-represented employees for the long-term health of the airline, its employees and shareholders. The “13 percent solution†represents an
approach using the court to impose temporary measures, but should not negate the need for a long-term resolution that would provide adequate
opportunity for employee involvement and consent.
Judge Eugene R. Wedoff has scheduled a status conference on United’s application for December 30, 2002. The Machinists Union will be
represented by attorney Sharon Levine from the firm Lowenstein Sandler.
We remain convinced that a comprehensive recovery plan can be a success for United’s employees, passengers and investors alike.
Sincerely and fraternally,
Scotty Ford
President and General Chairman
IAM District 141-M
United Airlines Bankruptcy Update
To District 141-M Represented Employees at United Airlines:
Dear Sisters and Brothers,
In an expected development, United Airlines filed an application today in U.S. Bankruptcy court for rulings that can lead to changes in wages, work
rules and benefits for IAM members and all unionized employees at United Airlines.
United petitioned the court for two rulings under Section 1113 of the U.S. Bankruptcy Code: one, (an 1113© motion) begins a process that can lead
to abrogation of collective bargaining agreements, the other, (an 1113(e) motion) seeks immediate financial relief, including a 13 percent pay cut,
effective January 1, 2003, for IAM members at United.
United stated the proposed immediate wage cuts are necessary to achieve cost reductions targets required by its Debtor in Possession (DIP)
financing terms through May 1, 2003. United’s complete 1113 application is available Click Here.
Non-negotiable pay cuts proposed by United for IAM members as ''take it or leave it'' measures was rejected by the district leadership and will not be
presented to IAM membership for ratification. The IAM will object in court to United’s application for emergency wage reductions. We have taken
this position in full knowledge that the proposed 13 percent pay reduction is just the first step in United’s cost reduction plan. United has made clear
their intention to seek major scope changes in our agreement which would necessitate a second ratification.
Representatives of other Unions at United are presenting the company’s 1113(e) pay cut proposals for a ratification vote. United has applied to the
bankruptcy court to impose their 1113(e) terms on IAM members in the event all the other unions ratify the terms proposed by United.
Also in today’s court filing, United stated that if temporary modifications are achieved, it would delay its application to seek total rejection of labor
agreements until March 15, 2003. If the temporary terms are not in place either due to rejection by the membership of any other Union or the refusal
of the judge to impose terms on IAM members, the application to reject the agreements that was filed today will go forward as scheduled.
The IAM believes United’s financial problems can best be resolved with a business plan that emphasizes negotiations and partnership with its
union-represented employees for the long-term health of the airline, its employees and shareholders. The “13 percent solution†represents an
approach using the court to impose temporary measures, but should not negate the need for a long-term resolution that would provide adequate
opportunity for employee involvement and consent.
Judge Eugene R. Wedoff has scheduled a status conference on United’s application for December 30, 2002. The Machinists Union will be
represented by attorney Sharon Levine from the firm Lowenstein Sandler.
We remain convinced that a comprehensive recovery plan can be a success for United’s employees, passengers and investors alike.
Sincerely and fraternally,
Scotty Ford
President and General Chairman
IAM District 141-M