You have been sent this message from psa188@juno.com as a courtesy of the Washington Post - http://www.washingtonpost.com To view the entire article, go to http://www.washingtonpost.com/wp-dyn/articles/A61842-2002Dec16.html United Pilots Union 'Stunned' by Request <p> </p><p> By Kathy Fieweger</p><p> CHICAGO (Reuters) - United Airlines' pilots union said on Monday it was "stunned" by a new wage cut proposal the world's second-largest carrier put forth less than a week after filing for bankruptcy, signaling possible litigation ahead.</p><p> United, a unit of UAL Corp. <UAL.N>, late last week presented its labor unions with requests for wage cuts that were more than double what it was seeking before filing the biggest bankruptcy case in aviation history.</p><p> Of United's 83,000 member work force, about 80 percent is unionized. Nearly half of the work force is represented by the International Association of Machinists.</p><p> The airline on Friday outlined that it needs to cut annual labor costs by $2.4 billion in order to satisfy lenders' financing conditions, according to the flight attendants union.</p><p> "We're stunned," Paul Whiteford, head of the United branch of the Air Line Pilots Association, told Reuters in an interview.</p><p> "We're a bit puzzled over the material," Whiteford said. "The company still has not shown all of the economics and information that's part of the business plan they are going to have before the bankruptcy court."</p><p> A spokesman for the IAM was not immediately available to comment.</p><p> Four large institutions have put up a total $1.5 billion in debtor-in-possession financing to keep United flying during bankruptcy. But in return for getting the second half of the money -- $700 million -- United must meet specific cash flow targets that require cuts in expenses quickly.</p><p> The lenders are J.P. Morgan Chase <JPM.N>, Citibank <C.N>, Bank One <ONE.N> and CIT Group <CIT.N>.</p><p> Whiteford said in addition to the wage cuts, United has suggested "some fairly significant changes in work rules," but he declined to elaborate.</p><p> "We're going to have to do an analysis," Whiteford said, and then call in the pilots' union leadership "to see if there's a basis for negotiation."</p><p> If negotiation is ruled out, bankruptcy lawyers say the next step would be a series of measures under section 1113 of U.S. bankruptcy law that could leave unions with pay scales and work rules not of their choosing.</p><p> United's bankruptcy attorney, James Sprayregen, said in court last week that the airline would use that vehicle if necessary to keep the airline alive. </p><p> MISSION IMPOSSIBLE?</p><p> The Association of Flight Attendants said on its Web site that the discussions with management on the new cost-cut targets were "conceptual" in nature and that it would present its constituents with details when available.</p><p> "This is over and above the reductions planned for in the recovery plan we were working under outside of bankruptcy," the flight attendants said. "Those cost reductions must be secured by mid-February. Thus, things will happen very fast."</p><p> Unions realize that unless they negotiate, however, the airline has the option of simply asking a bankruptcy court judge to make contract changes.</p><p> "Not negotiating leaves all of the control in the hands of management," the AFA said. "We want to keep as much control over this impossible situation as we can."</p><p> A coalition of unions this autumn had agreed to provide United and its new chief executive, Glenn Tilton, with $5.2 billion in labor cost savings over 5-1/2 years as part of the recovery plan formulated to keep the airline out of bankruptcy.</p><p> But that figure was far below what former CEO Jack Creighton said was necessary to turn the airline around, and the airline failed to convince a federal agency to grant backing for 90 percent of a $2 billion private-sector loan.</p><p> Tilton at press conferences last week hinted that the $9 billion target, or perhaps even a larger one, was likely to materialize as a more realistic level.</p><p> However, he stopped short of quantifying the magnitude of pay cuts he thought were required to prevent the airline from liquidating altogether.</p><p> Shares of UAL fell about 14 percent on the New York Stock Exchange at midday on Monday, dropping 25 cents to $1.49. </p>