This article from NYTimes.com has been sent to you by psa188@juno.com. Hmmmm..raising costs drastically in a recession. Does this make sense? psa188@juno.com /-------------------- advertisement -----------------------\ Presenting the reloadable Starbucks Card. The Starbucks Card is reloadable from $5 - $500. Fill it up. Use it. Use it. Then, fill it up again. https://www.starbucks.com/shop/reload.asp?ci=672 \----------------------------------------------------------/ United Mechanics Approve Contract, Averting Strike March 6, 2002 By KENNETH N. GILPIN Mechanics at United Airlines approved a new contract yesterday, averting a strike that could have begun as early as tomorrow. United's 13,000 mechanics and cleaning crew workers voted by 59 percent to ratify the new contract, union officials said. The mechanics rejected a previous contract offer three weeks ago, but United and negotiators reached a tentative agreement on Feb. 18 on a contract that further improved pay and benefits. A strike would have been ruinous for United, which lost a record $2.1 billion last year. Many analysts had said a strike would force the airline to file for bankruptcy protection. "Today's ratification puts a long and difficult process behind us," John W. Creighton Jr., the chairman of the UAL Corporation (news/quote), United's parent, said in a statement. He added that the approval "provides a foundation on which to build our strategic recovery efforts." Scotty Ford, the president of the United chapter of the International Association of Machinists and Aerospace Workers, said in a statement, "I want to thank our members at United for the strong support they gave their negotiating committee under very difficult circumstances." The agreement replaces a contract that ran from 1994 to 2000. In return for equity ownership in the airline, United mechanics agreed to a pay freeze when the old contract was in effect. At the date of signing, the mechanics' top hourly wage, which has been $25.60 since 1994, will rise 37 percent, to $35.14. That figure will increase to $37.54 by the end of the contract in 2005. Over the next two years, mechanics will receive retroactive pay of as much as $16,500 covering the period from July 12, 2000, until the signing date of the new contract. United will make these payments quarterly. In addition, United agreed to raise pensions and to pay the fees for the government-issued licenses that the mechanics hold. United has been preparing for this contract since the old one expired in July 2000. Samuel Buttrick, an analyst at UBS PaineWebber, said the reported labor expense on United's balance sheet already reflected the cost of the new agreement. "Their reported labor costs are incrementally unimpacted," he said. "United has high labor costs. So does American Airlines. So does US Airways." Still, United must somehow cope with those costs, which "naturally impair United's ability to achieve reasonable returns on capital," Mr. Buttrick said. Given United's fragile financial condition, analysts said the carrier would most likely ask mechanics and other unions to give back some of the gains they have just won. United has yet to reach agreement on a new contract with its 23,000 ramp, customer service and reservation employees. Their contracts expired in July 2000. http://www.nytimes.com/2002/03/06/business/06AIR.html?ex=1016450682&ei=1&en=c938a779d8fca1e4 HOW TO ADVERTISE --------------------------------- For information on advertising in e-mail newsletters or other creative advertising opportunities with The New York Times on the Web, please contact onlinesales@nytimes.com or visit our online media kit at http://www.nytimes.com/adinfo For general information about NYTimes.com, write to help@nytimes.com. Copyright 2002 The New York Times Company