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Grudges May Unravel United’s Recovery

December 4, 2002

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CHICAGO (AP) _ United Airlines mechanic Ricky Taube drove 70 miles to his union hall last week to vote against wage cuts the carrier says are necessary to keep it out of bankruptcy.

On Thursday, he plans to repeat that scenario in a second mechanics’ vote that could unravel United’s effort to avoid a Chapter 11 filing.

Another rejection could deal the final blow to United’s $5.2 billion package of targeted labor cutbacks, since cost-cutting agreements with the other employee groups expire Dec. 31. And it’s all but certain to sink the airline’s chances for a government loan guarantee it needs to avoid defaulting on nearly $1 billion in debt due next week.

Like Taube, many of the 13,000 mechanics and aircraft cleaners are angry about years of perceived mismanagement and foregone raises; they think the airline might fare better under the steering of a bankruptcy court judge.

Even if not, they feel they’ve already made more than their share of compromises without approving these concessions _ pay reductions of 7 percent for mechanics and 6 percent for aircraft cleaners, plus the loss of four days’ vacation pay.

``We did not cause the course on which United Airlines is presently embarked,″ said Taube, who works at United’s maintenance facility in Oakland, Calif. ``Management’s poor judgments and poor business decisions got us where we are today.″

Afraid the mechanics’ militance could sink the airline’s recovery plan, union leaders are strongly urging ratification of the agreement, warning that a bankruptcy judge could dissolve their contract and wipe out decades’ worth of negotiated gains.

``Terminating your contract allows United to cut wage rates, modify work rules and reduce pensions and benefits. The company would have the right to make additional changes at will,″ Scotty Ford, president of the Machinists’ union district that represents mechanics, said in a letter to members Tuesday.

``We can ignore the financial threat this represents to our families and ourselves, or we can make the hard decision that provides some protection against the harshness of bankruptcy.″

Taube, a 12-year employee of United, reeled off a series of complaints shared by most mechanics. Their roots go back to 1994, when management persuaded reluctant workers to adopt an employee stock ownership plan to help save the company from being sold or worse.

That gave employees a 55 percent stake in the company, including 20 percent for the mechanics and other machinists. But they had to take pay cuts in exchange for stock which has lost almost all its value during United’s travails of the past two years.

They also went eight years without a raise until getting industry-leading wages this year after a bitter two-year fight that included a court battle.

``We took a severe pay cut for the ESOP and then when the company was making billions, hand over fist, they offered us a pittance,″ said Taube, 48.

``I am no longer willing to pay this company to have my job.″

In afternoon trading Wednesday on the New York Stock Exchange, shares of United’s parent UAL Corp. were up 4 cents at $3.09.

Like other United workers, the mechanics blame management for costly strategies that went awry and contributed to its current dilemma, including failed attempts to merge with US Airways and launch a charter-jet business.

Unlike other employee groups, they demonstrated last week that many were willing to let United fall into bankruptcy.

Union leaders hope for a different outcome this time based in part on the 38 percent no-shows for the Nov. 27 vote, which failed by 57 percent to 43 percent. But their influence is limited because many mechanics also are fed up with the Machinists’ union and want to replace it with the more hard-line Aircraft Mechanics Fraternal Association.

With pilots, flight attendants, ramp workers and other United workers having already approved wage cuts, mechanics know that ``all the other employees are looking at us″ going into Thursday’s crucial vote, said Denver-based union member Steve Adams.

``You know the eyes are on you when you walk down the jetways,″ said Adams, a flight maintenance technician who planned to vote for the cuts as ``the devil I know versus the devil I don’t know.″

``We’re not just voting for mechanics, we’re voting to give the whole company an opportunity to survive.″


On the Net:

United: http://www.united.com

Mechanics’ union: http://www.iam141m.org/united.htm

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