=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/news/archive/2003/03/28/n= ational0415EST0468.DTL ---------------------------------------------------------------------- Friday, March 28, 2003 (AP) United pilots' union OKs labor contract DAVE CARPENTER, AP Business Writer (03-28) 01:15 PST CHICAGO (AP) -- United Airlines' pilots union has agreed to unprecedented contract concessions to help the carrier overhaul its shaky finances in bankruptcy. Faced with the prospect of having deep cuts imposed by a bankruptcy judg= e, the pilots' leadership tentatively agreed Thursday to a six-year contract that would enable United to lower its industry-leading labor costs by $1.1 billion a year. Getting the pilots to agree to painful cuts would be a big step forward for United, which needs to slash costs heavily in order to keep from liquidating but wants to achieve them without forcing them through in court. "This breakthrough agreement is a significant step forward in making the hard changes necessary to reposition United to compete more effectively both immediately and over the long-term," United Airlines chief executive Glenn Tilton said, praising the pilots' leadership for the sacrifices they agreed to. The war in Iraq and corresponding air travel slowdown continues to shadow United's chances of a successful reorganization, however. Specifics of the proposed contract were not disclosed, but United said it got the overall concessions it needed from its highest-paid employees. It said the tentative agreement supports its plan for transformation and provides savings in line with its financial requirements. The pilots' ratification vote on the proposal is to be completed by April 11. United's next big labor test will be getting contracts in place with its machinists and flight attendants unions on the remaining labor cuts it wants. Paul Whiteford, chairman of the United branch of the Air Line Pilots Association, said the agreement should help transform United into a more effective competitor against other carriers. The pilots union and the company "agree that United's emergence from Chapter 11 as a competitive, viable and financeable entity is in the interest of all of United's stakeholders, creditors, employees and other constituencies -- including, of course, the flying public," Whiteford said. While the contract specifics weren't immediately released, United had be= en seeking reductions of more than 30 percent from pilots' wages along with other cuts. The carrier asked its pilots to provide the biggest share of its $2.56 billion in proposed annual labor savings through 2008 -- $1.1 billion in the form of lower wages and benefits and revised productivity rules. The pilots strongly opposed the company's proposal to create a separate, low-fare carrier, concerned about the impact on wages, benefits and seniority. But the company has a strong bargaining advantage in bankruptcy court and has filed a motion to have all its labor contracts voided and replaced with its own terms if no long-term agreements are in place by May 1. Neither side commented on any contract provisions related to the proposed low-cost carrier that United wants to carry 30 percent of its capacity. Spokesmen for the other big unions did not comment directly about the pilots' agreement but said daily negotiations are continuing. United lost $3.2 billion last year and made the largest bankruptcy filing in aviation history on Dec. 9. Shares in United parent UAL Corp. closed unchanged Thursday at 84 cents = on the New York Stock Exchange. On the Net: www.united.com =20 ---------------------------------------------------------------------- Copyright 2003 AP