Story from the Tribune. During the news black-out it appears that UA and ATSB had a very open dialogue. Seems they are looking for an addition 1 Billion...so one could assume the magic number is $6 billion.
The WSJ detailed the debt deadlines looming:
UAL debt obligations coming due in the fourth quarter.
Due Date Amount
Bank revolving credit facility Nov. 17 $300 mil
Aircraft-backed security Dec. 2 $575 mil
Machinists union back-pay installment Dec. 15 $70 mil
10.67% Series E senior debentures due May 2004 Nov. 1 $19.7 mil
11.21% Series B senior debentures due May 2014 Nov. 1 $20.8 mil
They could possibly squeek by with the $300 mil payment - possibly. Obviously, no way they could for the %575 mil. If there appears to be solid progress by the end of October, UA could hedge its bets that ratification would pass. It would be a one shot process and I would hope all union leadership would express the urgency to members. If one union votes no...immediate ch11. Tribune article below...
Machinists for United go own way
By John Schmeltzer, Tribune staff reporter. Tribune wire services contributed to this report
Published October 10, 2002
Labor solidarity at United Airlines fractured Wednesday when the machinists broke away from a union coalition and began separate talks on a concession package.
The move by the International Association of Machinists and Aerospace Workers came as sources said the federal loan board considering United''s request for a $1.8 billion loan guarantee has asked for another $1 billion in employee concessions.
United''s five major unions last month proposed $5 billion in givebacks, well short of the $9 billion that United has said it needs to qualify for the loan from the Air Transportation Stabilization Board and avert bankruptcy.
The union coalition and United have been negotiating a framework for the concessions during the past two weeks but had kept a virtual news blackout on any progress.
In a statement, United confirmed that it began independent talks with the machinists union Wednesday.
We plan to enter into bilateral negotiations with each of the coalition members, as we have always expected to do, the company said.
A machinists union spokesman described independent talks with the airline as the most expeditious and efficient way to get the process done. Nevertheless, the union, which represents more than 35,000 United ground workers, will continue to communicate with other unions, the spokesman said.
Other unions discounted the impact of the machinists action. A spokesman for the Air Line Pilots Association said there is a broad consensus among the unions on an overall framework for an [economic] recovery plan.
T.J. Sesko, a spokesman for United''s flight attendant union, said the coalition of unions remains intact.
We continue to work together to avoid a bankruptcy filing, Sesko said.
Whether that will be possible likely remains up to the Air Transportation Stabilization Board. Sources said the board is pressuring United to come up with another $1 billion in cuts from its employees as a condition for the loan.
United lost $2.1 billion last year and is expected to lost more than $2 billion this year.
Time could become UAL''s largest enemy.
UAL is facing a $300 million loan payment to banks Nov. 17 and must come up with another $575 million for loans due Dec. 2.
Paul Whiteford, chairman of the United pilots union, in a letter e-mailed to members last week, said the airline is at crunch time.
Time is of the essence. We are not under any artificial deadlines or any company, ATSB or [union]-imposed deadlines. We are under a practical deadline, one which cannot be postponed, delayed or set aside, Whiteford said. Quite simply, United must have a substantial loan in place prior to mid-November.
The WSJ detailed the debt deadlines looming:
UAL debt obligations coming due in the fourth quarter.
Due Date Amount
Bank revolving credit facility Nov. 17 $300 mil
Aircraft-backed security Dec. 2 $575 mil
Machinists union back-pay installment Dec. 15 $70 mil
10.67% Series E senior debentures due May 2004 Nov. 1 $19.7 mil
11.21% Series B senior debentures due May 2014 Nov. 1 $20.8 mil
They could possibly squeek by with the $300 mil payment - possibly. Obviously, no way they could for the %575 mil. If there appears to be solid progress by the end of October, UA could hedge its bets that ratification would pass. It would be a one shot process and I would hope all union leadership would express the urgency to members. If one union votes no...immediate ch11. Tribune article below...
Machinists for United go own way
By John Schmeltzer, Tribune staff reporter. Tribune wire services contributed to this report
Published October 10, 2002
Labor solidarity at United Airlines fractured Wednesday when the machinists broke away from a union coalition and began separate talks on a concession package.
The move by the International Association of Machinists and Aerospace Workers came as sources said the federal loan board considering United''s request for a $1.8 billion loan guarantee has asked for another $1 billion in employee concessions.
United''s five major unions last month proposed $5 billion in givebacks, well short of the $9 billion that United has said it needs to qualify for the loan from the Air Transportation Stabilization Board and avert bankruptcy.
The union coalition and United have been negotiating a framework for the concessions during the past two weeks but had kept a virtual news blackout on any progress.
In a statement, United confirmed that it began independent talks with the machinists union Wednesday.
We plan to enter into bilateral negotiations with each of the coalition members, as we have always expected to do, the company said.
A machinists union spokesman described independent talks with the airline as the most expeditious and efficient way to get the process done. Nevertheless, the union, which represents more than 35,000 United ground workers, will continue to communicate with other unions, the spokesman said.
Other unions discounted the impact of the machinists action. A spokesman for the Air Line Pilots Association said there is a broad consensus among the unions on an overall framework for an [economic] recovery plan.
T.J. Sesko, a spokesman for United''s flight attendant union, said the coalition of unions remains intact.
We continue to work together to avoid a bankruptcy filing, Sesko said.
Whether that will be possible likely remains up to the Air Transportation Stabilization Board. Sources said the board is pressuring United to come up with another $1 billion in cuts from its employees as a condition for the loan.
United lost $2.1 billion last year and is expected to lost more than $2 billion this year.
Time could become UAL''s largest enemy.
UAL is facing a $300 million loan payment to banks Nov. 17 and must come up with another $575 million for loans due Dec. 2.
Paul Whiteford, chairman of the United pilots union, in a letter e-mailed to members last week, said the airline is at crunch time.
Time is of the essence. We are not under any artificial deadlines or any company, ATSB or [union]-imposed deadlines. We are under a practical deadline, one which cannot be postponed, delayed or set aside, Whiteford said. Quite simply, United must have a substantial loan in place prior to mid-November.
