URGENT United, Unions Agree on Final Buyout Deal, UAL Says
CHICAGO (AP) _ UAL Corp., the parent of United Airlines, said today it reached a final agreement for employees to buy the company.
The $4.5 billion deal, if approved by UAL shareholders, would end a nearly 7-year-old employee effort to buy UAL. It would become the nation’s largest employee-owned company, with about 78,500 employees.
UAL, the Air Line Pilots Association and the International Association of Machinists had agreed in principle on a buyout in December. The airline said it would release details of the pact after it is signed.
In a brief statement, UAL chairman and chief executive Stephen M. Wolf said, ″This transaction represents the best path to a competitive and successful future for United Airlines. I congratulate our employees on this important step that will enable United to reduce its costs and, thus, compete more effectively in the aviation marketplace worldwide.″
UAL stock surged $6.75 to $130.50 a share by late afternoon on the New York Stock Exchange.
The deal appeared to be in jeopardy last week when a deadline for signing a definitive agreement passed. The Machinists had balked at a number of items, including contract terms for the proposed successor to Wolf and wage concessions by nonunion members.
United hopes to use the concessions to lower its labor costs and build a separate, short-flight airline.
Tge company had put pressure on the Machinists to close the deal by threatening to lay off ramp workers, rescind severance pay to about 5,000 Machinists who lost their jobs with the airline when it sold its flight kitchens to Dobbs International Services, and sell its airplane maintenance operations in San Francisco.