=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= /30/MN282000.DTL ---------------------------------------------------------------------- Wednesday, April 30, 2003 (SF Chronicle) 3 United unions ratify contracts/Pacts with flight attendants, machinists, = baggage handlers slash airline's labor costs George Raine, Chronicle Staff Writer In critical votes, United Airlines flight attendants, mechanics and baggage handlers ratified contracts Tuesday to help the nation's second largest carrier emerge from bankruptcy and survive. As a result, United will have now cut labor costs by one-third in an effort to satisfy creditors and give its business plan a makeover in Bankruptcy Court. "This is an extremely bitter pill for all of us to swallow," said Dawn Marie Bader, a United flight attendant for 30 years and president of the Association of Flight Attendants' United chapter in San Francisco. "The vote was out of fear because of the simple fact we were damned if we did and damned if we didn't," said Bader, referring to United's leverage of having a Bankruptcy Court judge impose compensation cuts if any of its major unions rejected a contract offer. "Now this company is in a position to survive. It is up to the current management to run this airline the way it is supposed to be run." In a statement Tuesday, United said the flight attendants' ratification helps provide the cost improvements, productivity changes and operational flexibility the airline "needs to emerge from bankruptcy and succeed in the long term." In all, the flight attendants agreed to give United a savings valued at $314 million each year throughout the six-year contract. More than 63 percent of the 19,747 eligible flight attendants voted, with 75 percent of those who cast ballots voting for the contract. Separately, the airline's mechanics and machinists ratified contracts saving the bankrupt carrier about $4.7 billion over the same time period. Seventy percent of eligible mechanics and 83.2 percent of eligible baggage handlers voted to ratify, said Joseph Tiberi, a spokesman for the International Association of Machinists and Aerospace Workers. United sought Chapter 11 bankruptcy protection on Dec. 9 two weeks after the union representing 13,000 mechanics, District 141-M of the International Association of Machinists, based in South San Francisco, rejected a request from management for $1.5 billion in wage concessions. The contract they voted on Tuesday contained a 13 percent reduction in hourly wages, a 20 percent copayment toward the cost of health insurance and modified work rules. United's baggage handlers voted on a similar package. United's 8,000 pilots ratified their contract on April 11. They agreed to give United annual labor savings of $1.1 billion, or $6.6 billion over six years. In its scramble for survival, United said in Bankruptcy Court that it would seek to save $2.56 billion in labor costs annually -- a total of $15.4 billion over six years in this, the largest airline bankruptcy in history. Elk Grove Village, Ill.-based United said the centerpiece of its restructuring plan is an airline within an airline -- a discount airline that would compete with Southwest Airlines and JetBlue, two of the industry's success stories, in the same routes. United's plan was to pay employees assigned to the yet-unnamed discount airline less money, but the unions did not agree to that. The flight attendants, for example, negotiated wage reductions of nine percent across the board and agreed to work longer days, in some cases by 2 1/2 hours on domestic flights, and take shorter rests. But they agreed to only one set of work rules, pension, benefits and wages. The concessions run deep, said union spokeswoman Sara Dela Cruz, based in Chicago. They're losing, for example, ground pay -- pay received for boarding passengers. In all, the wage cuts and concessions equate to a 30 percent decrease in compensation for the airlines' 23,000 flight attendants, said Bader in San Francisco. In return, flight attendants will participate in profit sharing and receive incentive bonuses and equity in the form of stock that, ideally, will pay off as the company returns to profitability. United's long economic slide is reflected in the thinning of the ranks of flight attendants. Some 7,900 of them are currently out of work. Of that number, 2,000 are on forced unpaid leave, 250 are on unvoluntary furlough and the rest took voluntary leaves. United is the dominant carrier at San Francisco International Airport, where it has approximately one-half of all flights. E-mail George Raine at graine@xxxxxxxxxxxxxxxx=20 ---------------------------------------------------------------------- Copyright 2003 SF Chronicle