=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SF Gate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/chronicle/archive/2002/12= /07/MN241679.DTL ---------------------------------------------------------------------- Saturday, December 7, 2002 (SF Chronicle) UNITED/Airline in crisis/United's woes San Mateo County's woes/Schools, gov= ernment likely to take a hard hit Ryan Kim, Chronicle Staff Writer The dramatic descent of United Airlines into almost certain bankruptcy h= as sent ripples of anxiety through the ranks of its employees -- and through the local governments and school districts that depend on its business and tax dollars. The airline is the largest property taxpayer in San Mateo County, generating about $27 million a year that is divided between the county and its schools. "We're already getting hammered by the state, so every dollar lost translates into some loss of jobs or service at the county level," said John Maltbie, the county manager. United, with 16,000 workers in the Bay Area, is San Mateo County's large= st single employer -- and the looming threat of bankruptcy is forcing its employees to consider alternatives that seemed unthinkable only a couple of years ago. "I'm looking at it day by day, seeing what's in my personal interest," said Bob Stine, a 58-year-old lead mechanic who lives in the city of San Mateo. Stine had been planning on working a few more years, but now he may opt for early retirement -- fearing that a bankruptcy court judge could decide to remove some of his retirement benefits. Economic analysts predict that even if United Airlines emerges from bankruptcy largely intact, it will resort to laying off employees, slashing their wages or moving them to other locations. Those actions will wind up affecting retailers and other local businesse= s, further hampering the fragile local economy as it struggles to rebound from the dot-com bust. "Those are very highly paid employees," said economic consultant Richard Carlson of Spectrum Economics in Mountain View. "If they're not laid off, they're going to have to take significant pay cuts. That means people will have less money to spend. They will pay mortgages first and optional things, like new cars, appliances and restaurants will get cut." Many employees are already contemplating the bleak new future that awaits them. "The possibilities right now are so overwhelming, it's almost too difficult to consider what could happen," said Dave Lovendahl, a 42-year-old United Airlines mechanic from Fremont who has lost more than $130,000 in the past year as the company's stock prices plummeted. WORRY ABOUT LAYOFFS The 16-year veteran mechanic said that although he is worried about layoffs, he is even more concerned that a postbankruptcy United Airlines could slash wages so drastically that he would be forced to seek work elsewhere. He is already doubtful that the company will provide the mechanics their first installment of back pay, as part of a contract settlement earlier this year -- money that would have helped pay for his holiday shopping. "This has really hampered my plans for my family, my future and my retirement," Lovendahl said. Eddie, a 58-year-old utility worker who was told by United management not to give a reporter his last name, said he's worried he won't be able to pay off his mortgage. He's never saved much, instead choosing to send money to his family in Guam. Now he's not sure what will happen. "I usually try to help out my uncle and aunt, so I'm unprepared for this= ," the Redwood City man said. "It's hard, God, it's hard." United's troubles are also likely to spell problems for local school districts, which rely on the airline giant's property taxes. San Mateo Union High School District, one of eight Peninsula districts that receive tax money from the airline, counts on United to provide almost $5 million of the district's $72 million annual budget. Bob Arnold, associate superintendent of business services, said the district has calculated that it could lose at least $1 million annually if United goes bankrupt. "That's not an insignificant amount," said Arnold. "That, coupled with t= he governor's budget reductions, coupled with the general slowdown in the economy, will certainly require us to take a look at our noncore programs." DROP IN COUNTY REVENUE Maltbie, the county manager, doesn't expect that San Mateo will lose all of the approximately $4 million in taxes it receives annually from United. But if the airline scales back flights and they're not replaced by other carriers, it could still mean a significant drop in revenue for the county at a time when the state is squeezing counties in an effort to close a $21 billion budget deficit. Already this year, San Mateo County lost $1 million in sales tax revenue when United cut a deal with Oakland and Alameda County to refuel planes at Oakland International Airport, Maltbie said. He said the county is trying to regain the fuel contract with United, but until then, the revenue is gone. With all the questions and dread, however, many employees are trying to remain optimistic. "I still hold out hope that we can continue to work for our carrier, make decent wages and we'll be working in 10 years," said Lovendahl. "But that's all I've got right now, hope." E-mail Ryan Kim at rkim@sfchronicle.com.=20 ---------------------------------------------------------------------- Copyright 2002 SF Chronicle