NYTimes.com Article: Machinists' Union Sues United Over Layoffs

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Machinists' Union Sues United Over Layoffs

March 27, 2003
By MICHELINE MAYNARD






The machinists' union filed suit yesterday against United
Airlines to block the layoffs of 1,148 mechanics at the
Indianapolis maintenance base, contending that United had
used the war in Iraq as an excuse for cutting its
operations.

United maintains that the layoffs are legal under its union
contracts, which allow employees to be furloughed without
pay in the case of an emergency, like a war. The airline
did not comment on the suit.

A hearing on the suit was scheduled for April 9 in United
States District Court in Indianapolis. United notified the
International Association of Machinists and Aerospace
Workers last week that it planned to place the workers on
"authorized no-pay status." They would receive benefits and
keep their seniority but not receive pay.

United filed for Chapter 11 bankruptcy protection in
December. It laid off the first 458 mechanics in
Indianapolis on Tuesday, with the remaining layoffs
scheduled for April 15. The first group would return to
work in June, while the others are not scheduled to return
until August.

The action came as United and five of its labor unions are
engaged in talks on $2.56 billion in concessions that the
airline says are necessary for it to keep flying. It has
asked a federal bankruptcy court for permission to set
aside its labor contracts and impose the cuts, if it cannot
reach agreement with its unions. A hearing on that motion
is set for April 14 in Chicago.

"United's action is especially outrageous, considering we
are in a critical stage of negotiations," said Scotty Ford,
president of District 141-M of the machinists' union, which
represents the mechanics.

It was the first such suit resulting from an airline's
actions in the wake of the war. Over the last week,
domestic airlines have announced more than 10,000 layoffs
and cut their schedules by about 10 percent. The Air
Transport Association, the trade group for the airlines,
said yesterday that it expected domestic travel to decline
20 percent and international travel to drop 40 percent in
the near future, given the recent rate of bookings.

Frederic Brace III, United's chief financial officer, said
yesterday that the war would pose "severe challenges" for
income and cash flow industrywide.

Still, some analysts say the industry's cutbacks are
related more to the weak economy than the war.

The suit came as United said it had easily met the first
set of requirements under $1.5 billion in
debtor-in-possession financing that it obtained when it
filed for bankruptcy.

http://www.nytimes.com/2003/03/27/business/27UNIT.html?ex=1049793039&ei=1&en=865068ba7f936b00



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