OAK and IND to Close

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Nov 19, 2002
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In one of United's first major transformation steps
following ratification of its labor contracts, the
company today filed a motion in the U.S. Bankruptcy
Court to reject its leases at the Indianapolis and
Oakland maintenance centers. The company plans to
permanently close the IMC May 9 and the OMC May 31.

The company will outsource all heavy maintenance
work and shift some other maintenance work to the
San Francisco Maintenance Center. United's goal is
to streamline its maintenance operations and lower
costs, while continuing to ensure the highest
standards of safety and maintenance reliability.

This was a very difficult decision for the company,
union leadership and the employees, says Pete
McDonald, executive vice president-Operations. The
fact is that our Indianapolis, Oakland and San
Francisco Maintenance Centers have been operating at
about 50 percent capacity on heavy maintenance and
the annual C checks. By outsourcing heavy
maintenance, we estimate that we can reduce costs by
as much as 50 percent.

The maintenance center closings affect approximately
1,200 union-represented employees and 180 salaried
and management employees at Indianapolis. More than
600 union-represented employees and about 300
salaried and management employees are affected at
Oakland.

Randy Rotondo, managing director-Human Resources,
says, We have conducted seminars at the IMC and
will do the same for employees at the OMC to advise
them of the options available to them, as well as to
acquaint them with the job search and placement
assistance available through our partnership with
the Adecco staffing company. We will continue to
work with these employees to assist them in every
way possible. Eligible employees will have the
option of a special leave for retirement, severance
pay and continued medical and travel benefits or,
for those who exercise bumping rights, relocation
assistance.

United elected to consolidate its maintenance work
at San Francisco because the SFMC offers the
following benefits that Indianapolis and Oakland
could not match:

* An integrated facility that includes capabilities
for engine and components maintenance.

* A hub location that will not require aircraft to
be ferried in for maintenance.

United is finalizing the details of its maintenance
contracts with outside vendors and will make its
vendor selection on the basis of safety, quality of
maintenance, technical capability and capacity, in
addition to the cost of delivering the work.
 
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