This article from NYTimes.com has been sent to you by psa188@juno.com. United and Unions Discuss Changes December 13, 2002 By EDWARD WONG CHICAGO, Dec. 12 - United Airlines executives and union leaders met today for the first time since United filed for bankruptcy protection to discuss how the airline will be revamped, a process that is certain to include wage and benefit cuts for employees. United has to cut labor costs quickly because of stipulations attached to the $1.5 billion in financing it received from lenders to help it keep operating under Chapter 11. If United does not achieve the cost cuts, then the lenders can withdraw their backing. But executives at United, a unit of the UAL Corporation, did not put specific figures related to concessions on the table today, company and union officials said. "We think the meeting went well," said Rich Nelson, a United spokesman. "As we had said we would, we presented an overview of our business plan and gave presentations on our current financial condition." In the month before its bankruptcy filing, United had reached tentative agreements with its unions for $5.2 billion in concessions over five and a half years. But those agreements were voided because the mechanics rejected their $700 million portion of the concessions, and United did not get a $1.8 billion federal loan guarantee. Now that United is in bankruptcy court, industry experts say much deeper labor cuts are needed to keep the airline operating. "They recognized outside of bankruptcy that we're already at an average compensation rate in the industry," said Sara Dela Cruz, a spokeswoman for the flight attendants' union. "We would expect them to recognize that inside bankruptcy as well. We tried so hard to stay out because we knew they would ask for more inside." The pilots' union, which had agreed to give up $2.2 billion as part of the $5.2 billion package, said it did not want to comment on specifics on the talks. But its representative on the UAL board did say that the pilots were open to the idea of starting another low-cost airline within the company. Glenn F. Tilton, United's chief executive, said this week that United might try to run a low-cost airline again, even though a previous venture in California, Shuttle by United, lost money. "As part of our commitment to work collaboratively with United to restructure the company and forge a competitive offering in the industry, we're open to the idea of a shuttle, and we'll evaluate the opportunities this concept presents," Paul Whiteford, the pilots' representative on the board, said today in a statement. The company, which is 55 percent employee-owned, has two union representatives on its board. The labor groups are also expected to seek representation on the creditors' committee, which will be formed on Friday by a federal trustee. Creditors will meet that afternoon in a hotel in downtown Chicago for the selection process. There will be a committee with about a dozen unsecured creditors; other committees representing other kinds of creditors may be formed as well. "You want diversity among the creditor body," said Jonathan Rosenthal, an executive at Saybrook Capital, which hopes to be retained as a financial adviser for the creditors' committee. "If you just loaded up with institutional, large creditors, you don't have the diversity." But some creditors are wary of the potential committee makeup, especially if workers' groups are on it. Trying to appease its customers, United said today that it would not begin charging $100 for passengers to fly standby next year, a move it had announced in September. Another airline in bankruptcy protection, US Airways, received some leeway today on its schedule for revamping. A bankruptcy judge in Alexandria, Va., said he would allow the company to file a reorganization plan by Jan. 31 rather than Dec. 20. US Airways is working to obtain $200 million in concessions from its unions to secure a $900 million federal loan guarantee before that filing. http://www.nytimes.com/2002/12/13/business/13AIR.html?ex=1040799147&ei=1&en=4f0266835444207c 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