New United Court Filing May Spur Labor Talks


Dec 11, 2002
New United Court Filing May Spur Labor Talks
Motion Could Lead to Voiding of Union Deals
By Kirstin Downey
Washington Post Staff Writer
Thursday, December 26, 2002; Page E01
United Airlines, which filed for Chapter 11 bankruptcy protection two weeks ago, is expected to file a court motion today that will launch it into tough labor-management negotiations that could determine whether the company lives or dies.
United''s lenders, who are bankrolling the airline during its restructuring, want to reduce its labor costs by about $2.4 billion. The company sought bankruptcy protection after the Air Transportation Stabilization Board, created to give financial assistance to airlines struggling after last year''s terrorist attacks, turned down United''s application for a federal loan guarantee, saying the company had not done enough to restructure itself.
While the new filing, known as an 1113 motion, has been characterized by United as primarily procedural and is customary in many corporate bankruptcies, it lays the groundwork for terminating collective-bargaining agreements negotiated over decades by workers and management. Work rules and layoffs are expected to be as much of a focus in the deliberations as pay cuts and health care reductions. The airline says it is losing $20 million a day.
It''s like a gun to their head, Karen Asuncion, an official with United''s machinists union, said of some members'' reaction to news of the impending filing.
United''s motion will list prospective areas of contract changes, according to a memo from the Association of Flight Attendants to its 20,000 members at United. The memo said that the union intends to negotiate with the company in good faith to provide United the savings needed for a successful reorganization but that it will seek to make the changes least damaging to its members.
The company has indicated that nothing in its presentation is ''take it or leave it,'' and that ''there is room for negotiations,'' the memo said, but the group called the airline''s lengthy list of potential cuts overreaching and unrealistic.
United''s management has previously signaled that major cost reductions should come from the company''s 8,500 pilots, who are represented by the Air Line Pilots Association. In an informational brief submitted with its bankruptcy filing, United noted -- in italicized type -- that it pays its pilots $1 million more per day than American Airlines and Delta Air Lines pay theirs.
Additionally, United said it suffers from lower worker productivity than other airlines.
In particular, the work rules at United allow its pilots to fly the smallest number of hours per pilot in the industry, the brief said. In 2001, for example, United pilots on average flew just 60 percent of the hours flown by Southwest''s pilots each month.
The company is also considering changing rules limiting furloughs to make it easier to lay off workers when ticket sales fall and employees are not needed, according to the report.
Spokesmen for the Air Line Pilots Association said they are awaiting more specific concession proposals from the airline before commenting.
Flight attendants have been told they may be asked for reductions in health benefits, as well as salary cuts of 9 percent. Substantial cutbacks in flight schedules could eliminate many attendants'' jobs, possibly affecting seniority. Flight attendants with high seniority are typically able to choose the days, times and routes they will fly, while workers with less seniority generally have less desirable routes or work as needed, sometimes on short notice.
Stephen R. Randy Canale, president of the International Association of Machinists Local 141, told his union members that the bankruptcy judge could terminate the collective-bargaining agreements within about two months if the unions and management are unable to agree on wage and benefit concessions.
© 2002 The Washington Post Company