This article from NYTimes.com has been sent to you by psa188@juno.com. UAL Talks With Holdout Union December 2, 2002 By MICHELINE MAYNARD CHICAGO, Dec. 1 - United Airlines executives met today with leaders of the machinists union, seeking ways to persuade mechanics to reverse their rejection of $700 million in concessions. The airline is trying to bolster its case for federal loan guarantees and avoid filing for bankruptcy protection. The meeting of senior executives at the airline and officials of the International Association of Machinists, which represents 13,000 airline mechanics, took place at an undisclosed site, a United spokesman said. United faces a crucial decision on Monday on whether to make a $375 million payment on loans backed by aircraft or take advantage of a 10-day grace period, buying time as the airline tries to put an overhaul plan into place. The decision on the loans will be made by the board of the airline's parent, the UAL Corporation, which is scheduled to meet on Monday. Executives involved in United's overhaul effort have said that the airline will probably choose the grace period, putting off a bankruptcy filing, while it waits for a ruling on its application for $1.8 billion in federal loan guarantees. Along with a decision on the payment, UAL directors are expected to receive an update on the efforts to keep the airline out of bankruptcy, people with knowledge of the board's agenda said. The airline suffered a setback on Thursday, when United's mechanics turned down their part of a package of $1.5 billion in wage and benefit concessions that the machinists' union had pledged as part of the drive to avoid a bankruptcy filing. Two other units of the union approved their part of the package, worth $800 million, but mechanics voted 57 percent to 43 percent to reject cuts worth $700 million to the airline. In their negotiations today, the airline and the union discussed two main options, participants in the talks said - either hold another vote on the same package of concessions or renegotiate the package to make it more palatable to the mechanics. The first option, considered to be the much easier course of action, would be taken if union leaders had a strong sense that the rejection had been more of a protest vote and that the concession package would pass the second time around. Such a move would permit the union to quickly schedule a ratification vote, which could put the recovery plan on track as soon as possible. Under that option, union leaders would be under pressure to persuade mechanics to drop their objections, or face the embarrassment to them and United of a second defeat. In September, mechanics at US Airways approved their concessions to the airline after rejecting the package the first time. The second course, negotiating a new agreement, would be taken if the union wanted the company to address specific concerns. But United has said that any concessions package must be equal in value to the one the mechanics have turned down. A spokesman for the machinists' union, Joe Tiberi, said union officials were eager to find some kind of compromise and help the airline. "We aren't slamming any doors," Mr. Tiberi said. On Saturday, the machinists' union representative to the UAL board pleaded with mechanics to reconsider their rejection. "There is no positive alternative to the equality of sacrifice that is required of us all," the representative, S. R. Canale, said in a letter posted on the union's Web site. United sought the mechanics' concessions as part of an overall package of $5.2 billion in wage and benefit cuts from employees over five and a half years. The concessions are a crucial part of a $14.1 billion overhaul plan that United has presented to the federal Air Transportation Stabilization Board, in hopes of winning approval for $1.8 billion in loan guarantees. The federal board is expected to meet sometime this week, but it is not clear whether the board will rule on United's application before the airline can reach final agreements on the concessions. The board has said it has no timetable for deciding on United's proposal, first made in June and revised since then. United's pilots have already approved $2.2 billion in concessions that include an 18 percent wage cut. On Saturday, United's flight attendants voted 87 percent in favor of wage and benefit cuts worth $412 million. That vote was noteworthy because flight attendants, unlike pilots and machinists, do not hold stock in the airline and do not have a seat on the UAL board. Brian Wojcik, 33, a United flight attendant based in Chicago, said passengers have frequently asked him whether the airline will stay in business, particularly during the Thanksgiving holiday, as speculation about a filing for Chapter 11 bankruptcy protection grew rife. "Our planes are full but our company is losing money every day," said Mr. Wojcik, who voted for the concessions package. He praised United's chief executive, Glenn F. Tilton, for being up front with employees about the difficulties faced by the airline, calling the wage and benefit cuts "extremely fair," given the crisis at hand. Mr. Wojcik said Mr. Tilton, who joined the airline in September, is dealing with years of animosity between United and its unions. He said that resentment probably boiled over among mechanics, leading to their contract rejection. "Of course we want them to look at what they are doing," said Mr. Wojcik, a United employee for eight years. "But I can also understand why they did what they did." Another flight attendant, Ken Kyle, said employees are frustrated because the fate of the airline is out of their hands even with their participation in the recovery plan. "If management decides that Chapter 11 is in the company's best interest, they will do it," said Mr. Kyle, 50, who is based in Denver. "They will do it even with A.T.S.B. approval, and even with billions of dollars in concessions." Mr. Kyle, who has worked in the airline industry for 15 years, was laid off eight times in earlier stints at Trans World Airlines, Continental and British Caledonian, before joining United four years ago. He said he voted for the concessions, and that he holds no animosity for the mechanics. "I can't really blame them," he said, "but I do hope this last piece of the puzzle falls into place." http://www.nytimes.com/2002/12/02/business/02AIR.html?ex=1039839383&ei=1&en=0e48653654e8dd12 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