SF Gate: United's machinists last holdouts to emergency pay cuts in bid to emerge from bankruptcy

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Thursday, January 9, 2003 (AP)
United's machinists last holdouts to emergency pay cuts in bid to emerge fr=
om bankruptcy
DAVE CARPENTER, AP Business Writer


   (01-09) 00:22 PST CHICAGO (AP) --
   United Airlines has gained approval from four of its five unions for
emergency pay cuts as it tries to emerge from bankruptcy. Now it's
counting on a judge to order the participation of the only holdouts: its
machinists.
   Flight attendants overwhelmingly ratified 9 percent interim pay cuts
Wednesday.
   Federal bankruptcy Judge Eugene Wedoff was to rule Thursday or Friday on
whether to impose 13 percent pay reductions on the machinists -- 13,000
mechanics and 24,000 ramp, customer service and gate workers.
   If Wedoff grants the order, United says it will have enough financial
breathing room to meet its lenders' requirements until May 1, allowing it
time to negotiate permanent contracts.
   Flight attendants joined pilots, dispatchers and meteorologists in
reluctantly accepting United's proposal for temporary wage cuts, a move
the company says will provide about $70 million a month in savings to
pacify its lenders.
   But as with the other unions, their interim agreement expires Friday
unless the machinists' participation is assured by day's end.
   Ninety-four percent of those participating in weeklong voting favored the
wage-cut agreement, the union said, although turnout among United's 24,000
flight attendants was just 62 percent.
   "This cut is very painful, especially since flight attendant compensation
is so minimal to begin with," said Greg Davidowitch, president of the
United branch of the Association of Flight Attendants.
   Flight attendants' pay before the cuts ranged from $17,000 to $44,000 a
year.
   Like the pilots, the flight attendants also assailed the company for bei=
ng
"less than forthcoming" with information about its overhaul plans.
   United CEO Glenn Tilton said he was grateful for the flight attendants'
decision and pledged that the company will continue to work with its
unions to reach consensual agreements.
   Elk Grove Village, Ill.-based United, which filed for Chapter 11
bankruptcy last month, has until Feb. 15 to cut costs. Otherwise it could
lose the rest of $1.5 billion in interim financing supplied by a group of
banks.
   Pilots approved a 29 percent pay cut; the 180 controllers and 40
meteorologists will see wages slashed by 13 percent. The machinists'
union, however, has objected to United's proposal that its members take 13
percent reductions, saying the company has not provided sufficient
evidence.
   Without a favorable ruling from Wedoff, United will move in court to sta=
rt
having all labor contracts voided. It said in its court filing that it
wants to avoid those proceedings because they would "unnecessarily strain
the negotiating process and jeopardize the company's restructuring
efforts."
   Negotiations continued Wednesday for a second day between the airline and
the International Association of Machinists and Aerospace Workers on
long-term cost reductions. The union said there were no discussions on
United's proposal for interim cuts.

On the Net: www.united.com

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Copyright 2003 AP

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