=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/2003/03= /05/BU235668.DTL ---------------------------------------------------------------------- Wednesday, March 5, 2003 (SF Chronicle) United workers to sell stock/Airline reports a $382.1 million loss for Janu= ary David Armstrong, Chronicle Staff Writer UAL Corp., parent of United Airlines, said on Tuesday announced it has received permission from the Internal Revenue Service to sell 3.9 million shares of an employee stock ownership plan without incurring a tax penalty, potentially boosting the bankrupt company's financial condition. Separately, United, the world's second-largest airline, disclosed in a Securities and Exchange Commission filing that it lost $382.1 million in January. The dominant carrier at San Francisco International Airport with half of all passengers and flights, United lost $5.3 billion during 2001 and 2002. The company has been in Chapter 11 bankruptcy since December. If State Street Stock & Trust, the employee stock plan's independent trustee, does sell the 3.9 million shares, it could trigger provisions in the plan, which the company and several major unions adopted in 1994 to save jobs and help United recover from an earlier crisis at the end of the Gulf War. The plan held about 55 percent of the company's shares until September, when State Street began selling them as United spiraled toward bankruptcy. State Street has been seeking permission to sell the remaining shares. The 3.9 million shares covered in the IRS ruling represent about one-fifth of the remaining shares. A sunset clause, UAL Corp. said, could push employee ownership below 20 percent, which would "eliminate special shareholder votes for acquisitions, divestitures and CEO appointments, among others." UAL said that the two seats held by the Air Line Pilots Association and International Association of Machinists and Aerospace Workers on its 12-member board of directors would remain intact. Despite that assurance, officials at two of United's largest unions said in a joint statement Tuesday that the planned sale of stock would mean the end of the plan. "This current crisis is certainly not the result of employee ownership," wrote Randy Canale, president and general manager of IAM District 141, and Scotty Ford, president and general chairman of IAM District 141-M. "It was only when a new management team failed to embrace the benefits of employee ownership that United began to slip from its position of prominence," the union leaders said. "Instead of capitalizing on a historic opportunity, past UAL management explored costly mergers and risky ventures . . ." UAL has asked its unions for $2.56 billion in annual wage cuts and concessions on benefits. If it doesn't get them by March 15, UAL has said it will ask the Bankruptcy Court to void its union contracts. Chronicle news services contributed to this report. / E-mail David Armstrong at davidarmstrong@sfchronicle.com.=20 ---------------------------------------------------------------------- Copyright 2003 SF Chronicle