=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/2003/04= /12/BU11329.DTL ---------------------------------------------------------------------- Saturday, April 12, 2003 (SF Chronicle) Unions OK cuts to help save United/Airline seeks to save $2.5 billion over = the next 6 years George Raine, Chronicle Staff Writer The last of United Airlines' unions on Friday tentatively agreed to a de= ep cut in compensation to give the nation's second-largest airline a fighting chance to emerge from bankruptcy and survive. The International Association of Machinists' District 141-M, representing United's 13,000 mechanics and based in South San Francisco, tentatively agreed to pay and benefits cuts and work rule changes that will save the carrier $349 million annually and $2.09 billion over six years. Also on Friday, the Air Line Pilots Association said United's pilots had ratified a labor agreement that would give United annual labor savings of $1.1 billion and $6.6 billion over six years. United is seeking to save $2.56 billion in labor costs annually and $15.4 billion over six years. United's chairman, president and chief executive, Glenn Tilton, said the tentative agreements are "an extraordinary accomplishment for United," even though the airline, with the exception of a few low-cost success stories, is flying through a devastating industry slump worsened by the war in Iraq and the SARS virus. "Everyone involved in all of these negotiations came together with a commitment to be honest and fair in tackling tough issues, with their sights set on the long-term well-being of the people of United," said Tilton. "With all of our labor groups aligned, I feel confident that United's transformation into a more efficient, effective airline, able to compete across markets and product lines, is on track to succeed." The mechanics agreed to a 13 percent reduction in hourly wage rates, a 20 percent copayment toward the cost of health insurance and modified work rules. Current pensions, vacations and holidays were preserved. These same mechanics in November rejected a request from management for $1. 5 billion in wage concessions as part of the airline's effort to stop itself from sliding into bankruptcy. United filed for Chapter 11 bankruptcy protection two weeks later. "From the moment United Airlines declared bankruptcy on Dec. 9, a painful restructuring was inevitable," said Scotty Ford, president of the IAM's District 141-M. "Despite proposed changes to pay, benefits and working conditions, this agreement preserves the essential value of a job at United Airlines," he said. A ratification voted will take place April 29. The higher-paid pilots Friday ratified the contract proposal they had tentatively approved March 27. They will take a 30 percent pay cut and agreed to work rule revisions and increased productivity, saving $1.1 billion each year, according to the airline. The proposal was approved by a vote of 5,205 (82.2 percent) to 1,125 (17.8 percent). Approximately 81.7 percent of eligible pilots voted. The chairman of the Air Lines Pilots Association's United unit, captain Paul Whiteford, said, "The pilots of United Airlines have now stepped up for their share of commitment necessary to save this company in the face of the worst crisis in airline history. This agreement allows the company to reorganize under Chapter 11 and emerge as a viable, competitive airline against both low-cost carriers and other network carriers." If United did not have these two and four other union agreements in hand, the airline's lawyers were prepared to go to bankruptcy court on Monday and argue a motion to void the airline's existing labor contracts and get the court to impose new wages and work rules. Three other unions -- the Association of Flight Attendants, the Professional Airline Flight Control Association and IAM District 141, representing ramp and warehouse workers, ticket agents and others -- have also reached tentative agreements with United. United's meteorologists, represented by the Transport Workers Union, ratified contract changes in March. Of the mechanics' contract proposal, Steve Jones, a 19-year veteran at United's maintenance facility at San Francisco International Airport, said, "We thought it would be a lot worse. But you do not have too many options at this point. The longer you can stay employed the better off you are." E-mail George Raine at graine@xxxxxxxxxxxxxxxx=20 ---------------------------------------------------------------------- Copyright 2003 SF Chronicle