United files court papers to void labor agreements

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United files court papers to void labor agreements  =

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Monday March 17, 7:28 PM EST =


(Adds details, remarks from unions, byline)

By David Bailey

CHICAGO, March 17 (Reuters) - United Airlines' parent UAL Corp. (UAL) on =
Monday asked a U.S. bankruptcy court to let it scrap most existing labor =
contracts because attempts to reach long-term cost-cuts with union worker=
s have thus far failed.

United, the No. 2 U.S. air carrier, also said it may have to ask all work=
ers for at least another 9 percent in temporary wage cuts to offset a dro=
p in revenue ahead of a possible U.S. war with Iraq if it cannot find som=
e relief within 30 days.

Union leaders had anticipated the filing, but said they were still dismay=
ed, calling negotiated agreements best for all parties. United had set a =
Monday deadline to reach permanent deals with unions.

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United, which filed the largest ever airline bankruptcy Dec. 9, has said =
it needs to cut labor costs by $2.56 billion a year to meet the terms of =
its special bankruptcy financing. It has been negotiating with labor grou=
ps on permanent cost cuts for months and talks remain a priority, United =
said.

Most unions in January agreed to temporary pay cuts, which have saved Uni=
ted about $70 million a month. A judge ordered interim pay cuts for the m=
achinists, the only union that did not agree to a voluntary deal.

The airline asked the court to make those interim wage cuts permanent and=
 plans to seek changes to benefits packages, work rules and job security =
provisions. United also said it has reached a tentative agreement with me=
teorologists for permanent cuts and left them out of the motion.

"Between now and May 1st, we will continue to negotiate around the clock =
in the belief that we can reach consensual agreements with all of our uni=
on groups and render a ruling from the court unnecessary," United Chief E=
xecutive Glenn Tilton said in a statement.

Tilton also said United would do everything possible to avoid asking work=
ers for additional temporary pay cuts to deal with a recent drop in booki=
ngs.

However, United said it needs to respond immediately to the drop in booki=
ngs and the cut may be necessary if it cannot find sufficient relief with=
in 30 days. United and other airlines are seeking federal war-time relief=
 and aid and United also said it intends to approach lenders.

FILING EXPECTED

Bankrupt US Airways Group (UAWGQ) filed a similar motion to void its unio=
n agreements, which falls under Section 1113 of the bankruptcy code, but =
was able to reach and ratify voluntary deals before taking that step.

"We are extremely dismayed by the company's 1113(c) proposal," Paul White=
ford, head of the pilots' union at United, said in a statement. "Our cont=
ract is the product of 52 years of good-faith collective bargaining. To s=
eek to wipe out this contract by the stroke of a judge's pen is dishearte=
ning."

Pilots, the highest-paid workers at United, are working under temporary p=
ay cuts of 29 percent.

Flight attendants, among United's lowest-paid workers, also expressed fru=
stration with Monday's filing. The flight attendants are working under 9 =
percent interim pay cuts, and several weeks ago the group proposed more t=
han $1 billion in wage cuts and other cost savings over the next six year=
s.

"United's 1113 motion goes far beyond what is needed to successfully rest=
ructure in an attempt to gut our contract, and places an inordinate burde=
n on the flight attendants," said Greg Davidowitch, head of the United br=
anch of the Association of Flight Attendants.

Judge Eugene Wedoff imposed 13 percent temporary pay cuts on machinists t=
o May 1, while smaller unions for flight dispatchers and meteorologists t=
ook 13 percent pay cuts. (Additional reporting by Meredith Grossman Dubne=
r) =



=A92003 Reuters Limited. =


Roger
EWROPS

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