=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SFGate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2004/06/10/f= inancial1700EDT0270.DTL --------------------------------------------------------------------- Thursday, June 10, 2004 (AP) United, unions settle over retiree medical benefits DAVE CARPENTER, AP Business Writer (06-10) 14:52 PDT CHICAGO (AP) -- United Airlines reached agreement with its unions Thursday on reductions to retirees' medical and life insurance benefits, settling a months-long dispute on the eve of a bankruptcy-court hearing where United intended to have broad cuts imposed. The nation's No. 2 carrier said the modified cuts, combined with a simil= ar agreement reached with its mechanics' union last month, will save it more than $300 million through 2010. The latest agreement affects about 27,000 retirees, plus their spouses a= nd dependents, on top of 7,500 mechanics who settled on similar terms last month. The settlement removes a contentious issue from the list of United's remaining bankruptcy challenges. It might also boost the chances that the Elk Grove Village, Ill.-based airline will get the $1.6 billion federal loan guarantee it seeks to help it emerge from Chapter 11 after 18 months. Details of the agreement were not immediately disclosed. Chief operating officer Pete McDonald said the reduced benefits, agreed = to by a coalition of United's unions, were necessary to help the airline reorganize successfully and be competitive over the long haul. "The agreements with all our retirees contribute to achieving the durable savings that we need while recognizing the concerns of retirees expressed by their representatives," he said. The flight attendants' and machinists' unions, which consented to the modified cuts on Thursday, had assailed United's plan to slash retirees' benefits ever since it was unveiled in January. But as with the big companywide reductions to pay and benefits last year, they held little leverage in federal bankruptcy court and faced the likelihood of unilateral changes under a court process that had been scheduled to begin Friday. That hearing is now canceled. Greg Davidowitch, president of the United branch of the Airline Flight Attendants, said the agreement minimizes the impact of United's plan on retirees. "Our top priority was to come to an agreement that protects the well-bei= ng of thousands of committed employees who have devoted their careers to making United Airlines a success," he said. Randy Canale, president of District 141 of the International Association of Machinists and Aerospace Workers, said the agreement "balances the company's need to remain competitive while acknowledging the fixed income of retirees." United said it would file a motion with the bankruptcy court Monday seeking to have the agreement put in place, and spokesmen for both the company and the unions adhered to a pledge not to talk about details of the plan until then. But it is clear that United is getting the dollar savings it sought. Last month, the carrier said its plan would save the airline at least $57 million a year, which is not much different from the company's characterization of savings Thursday as amounting to more than $300 million through 2010. Flight attendants' spokeswoman Dawn Deeks maintained that "the program is significantly different from what they proposed." Unable to halt the cutbacks, the unions had been negotiating in recent weeks to try to provide retirees with more options under the plan. On the Net: www.united.com ---------------------------------------------------------------------- Copyright 2004 AP