This article from NYTimes.com has been sent to you by psa188@juno.com. Tension Mounts Between United and Machinists December 4, 2002 By EDWARD WONG with STEVEN GREENHOUSE CHICAGO, Dec. 3 - Executives and union leaders of United Airlines stepped up their pressure on United's mechanics today, seeking their approval of a $700 million package of wage and benefit concessions that the airline says could help it avoid bankruptcy court. The mechanics' vote is scheduled for Thursday, and so much hostility toward management runs through the shop floors at United that many mechanics say the outcome is uncertain. If the mechanics reverse course from their vote a week ago and approve the concessions, many say, it will be by only a narrow margin. United Airlines also announced plans today to lay off 220 pilots in early January and 132 in early February, reducing the total to about 8,250, and to cut senior management ranks by 18 percent, to 36 senior managers. Glenn F. Tilton, the chief executive, said that the remaining managers would take an average annual pay cut of 11 percent over the airline's planned five-and-a-half year recovery period and would forgo merit and incentive bonuses this year. The management savings would total more than $60 million, he said. Those announcements came as Mr. Tilton ratcheted up his own participation in the campaign to sway the votes of the mechanics. He signed a letter sent to every mechanic and then flew from United's headquarters here to San Francisco for last-ditch meetings tonight and on Wednesday with workers at the airline's largest maintenance center - and the one with the most militant machinists. An agreement by the mechanics to take the concessions would give United, the nation's second-largest airline and a unit of the UAL Corporation, the final piece of a business plan it has presented to the federal government in an effort get $1.8 billion in federal loan guarantees. Rejection of the concessions would scuttle that plan and almost certainly any hope of getting the loan guarantees, possibly forcing United to file for Chapter 11 bankruptcy protection. Last Wednesday, more than half of the airline's 13,000 mechanics turned out for a vote in which 57 percent rejected the wage and benefit concessions. After making some revisions on Sunday night to the concession package, the airline and union officials organized another vote for Thursday. There is now immense pressure for the mechanics - from executives, from the union leaders, from pilots and flight attendants - to reverse their earlier decision. Many mechanics are wary. "I've got the fear in me that they'll file for Chapter 11 no matter what we do," said Joe Schwirian, a mechanic for 17 years in San Francisco who voted against the concessions the first time. "I think it's in their game plan to do that. They gain too much from filing for Chapter 11 - they can close bases or do other things to skirt the contract." But Mr. Schwirian's car-pool colleague, Charlie Lincoln, a lead mechanic and shop steward, had a different take on the situation. "My vote was a `yes' originally," he said, "because what bankruptcy means to us contractually is not a good thing. The membership who voted `no' is just angry at the company. They're voting out of anger and not knowing the facts." That anger - present even among many mechanics who voted for the concessions - burns as hot as the engines that these workers maintain. It is anger at the fact that they agreed in 1994 to a deep wage cut with no raises for six years, in exchange for stock options that are relatively worthless today. It is anger arising from what they call wasteful management decisions, like United's recently aborted buyout of US Airways, and generous executive compensation, like the $3 million signing bonus Mr. Tilton received in September. And it is anger raised by the steady prodding of a rival union - the Aircraft Mechanics Fraternal Association - that has repeatedly tried to take over representation of the workers. In fact, many mechanics say the vote last Wednesday was as much an expression of dissatisfaction toward their current union - the International Association of Machinists - as it was a slap against United's management. "I am not a union hater but they give us no information," said Kenneth Epps, a 43-year-old turbine mechanic in San Francisco who said he planned to vote against concessions on Thursday. "A lot of mechanics don't trust our employer and a lot of folks don't trust the union. Voting no is a no vote to the union and a no vote to the company." United executives tried to sweeten the concession package by agreeing on Sunday to slightly alter a measure on unpaid vacation days, as well as promising to try to resolve workplace issues. Conditions that have made mechanics irate include the starting times of swing shifts, the outsourcing of work to other companies and what the disgruntled call the ineptitude of floor supervisors and middle management. Many mechanics have long demanded that a system be put in place where they can voice their complaints. "Part of it is the machinists tend to have more of a conflict with management than the other unions," said John W. Budd, a professor of industrial relations at the University of Minnesota. "The pilots are up in the air, the flight attendants are up in the air. They can do what needs to be done. But the machinists are on the ground. There's a huge potential for management to be looking over their shoulder." The relationship that the mechanics have with their supervisors varies widely by workplace. This was indicated by the radically different ways that votes turned out last week at some of the largest bases. In San Francisco and in Indianapolis, the second-largest site in number of mechanics, workers voted by almost 2-to-1 to reject the concessions. At Denver, workers voted by 57 percent in favor of the concessions. "I'm cautiously optimistic that this will pass," said Steve Adams, secretary-treasurer of the Denver local, which has about 1,000 members eligible to vote. "But they are going to bellyache all the way to the ballot box." Some mechanics and union officials who support the concessions say the outcome on Thursday could mirror what took place at US Airways this fall. That airline, which filed for bankruptcy in August, had asked the machinists for further concessions, which the leaders agreed to but the membership rejected by 57 percent in a vote on Aug. 28. Three weeks later, the union held a second vote after David N. Siegel, the chief executive of US Airways, said that the airline was in worse shape than he had previously indicated, and the concessions were passed. But what is now happening at US Airways could also encourage the United mechanics to take a firm stand against concessions. Just three days before the first vote at United, US Airways announced further layoffs of 2,500 workers, with 450 of those coming from the ranks of the mechanics. That raised the ire of mechanics at United, several of them said. The United mechanics also still talk about the disastrous business decisions that management made that led to the company's bleeding cash: the attempted buyout of US Airways that was blocked in July 2001 by the Justice Department; the failed attempt to create a business jet division called Avolar, and the seeming lack of a coherent business plan for coping with the economic downturn of the last couple years. What is more, the labor groups were promised by Gerald M. Greenwald, the UAL chief executive who oversaw the employee stock option plan from 1995 to 1999, that they would never work without a contract again. That promise turned out to be hollow, and the mechanics watched in frustration as their contract expired in July 2000 without a deal. "They feel that since July of 2000, they have been disrespected and abused," said Scotty Ford, president of the union local that represents United mechanics. "I have got all the people who work for me working the properties, trying to impress on them the seriousness of the situation, trying to convince them that the need is real." It was not until March 2002 that the mechanics got a contract granting them their first raise since 1994. Mechanics also have other bitter memories from the autumn of 2000, when United accused the machinists of staging a work slowdown and got a court injunction against them. And in the middle of negotiations for that contract, the Aircraft Mechanics Fraternal Association tried to take over representation of the mechanics. Many United mechanics are now lobbying in favor of that union, which argues that it more ably represents mechanics because it does not have other labor groups as members. The Aircraft Mechanics have set up a phone message hotline to United workers saying: "It is not our labor costs behind the crisis at United or the airlines. It is greed and arrogant management. If we give concessions today, they will demand more blood tomorrow." http://www.nytimes.com/2002/12/04/business/04LABO.html?ex=1040012599&ei=1&en=936d0a85eab3cbee 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