Apr 26, 2002 4 min read

CHICAGO (AP) – United Airlines and the union representing 25,000 ground workers reached a tentative contract agreement Thursday after 28 months of negotiations. United’s settlement with the International Association of Machinists and Aerospace Workers would give many of the carrier’s baggage handlers and customer service representatives their first raise since 1994, assuming they ratify the deal.

In addition to ramp workers and customer service representatives, the agreement covers food service workers, security guards and newly organized employees of Mileage Plus Inc., a subsidiary of United Airlines. The proposed four-year agreement includes pay and pension increases that would place the salaries of United union workers at the top of the industry.

Hourly base pay for a senior ramp worker would increase to $25.06 over the life of the contract. For customer service agents, it would rise from $19.74 to $26.02.

“These agreements provide recovery for United’s front line employees,” said Randy Canale, IAM District 141 president and lead negotiator. “We kept our promise to restore wages and benefits for thousands of employees who made sacrifices to support this airline during the past eight years.”

United CEO Jack Creighton said the airline’s customers should be reassured it will operate without disruption. A vote on the tentative contract should take place within the next two to three weeks, union officials said.

Creighton called the deal “a critical milestone in developing a recovery plan that meets the needs of passengers, preserves jobs, and puts the company on the road to financial stability.”

United officials have said that any recovery plan must include pay concessions. The airline contends the cuts are necessary to help it end two years of unprofitability, including losses of $510 million in the first quarter and an industry-record $2.1 billion last year, with business travel still sluggish and revenues lagging.

But the IAM – United’s biggest union, representing close to half of its 80,000 employees – refused to talk about possible concessions until pending contracts were settled and ratified.

The IAM boycotted a Thursday afternoon meeting of company officials with union leaders, who were summoned to United’s Elk Grove Village headquarters to discuss economic recovery steps. But its District 141 negotiators worked at a hotel nearby to wrap up the ramp workers’ contract after four days of intense negotiations.

Union officials said Thursday’s agreement would replace contracts that were approved when members adopted an employee ownership plan. United would continue to be majority owned by its workers, without the restrictions that froze many paychecks at 1994 levels.

“Employee ownership paid off for United Airlines a long time ago,” declared Tom Buffenbarger, IAM international president. “It’s high time these members got a reasonable return on their investment.”

The ground workers’ contract came up for renewal in July 2000 and was on the verge of settlement when the Sept. 11 terrorist attacks threw the airline industry into turmoil.

Already-ailing United promptly laid off 20,000 workers and eliminated about 30 percent of its daily flights.

The talks with ramp workers took a back seat to contentious negotiations with United’s 13,000 IAM-represented mechanics and aircraft cleaners. Those employees ended a two-year contract dispute March 5, ratifying an agreement that was reached just ahead of a strike deadline.

Mechanics received industry-leading wages in that contract, just as United’s pilots did in the fall of 2000 after a stormy standoff that caused more than 25,000 flight cancellations.

But the turmoil associated with the labor problems contributed to a loss of business travel passengers that worsened dramatically with last year’s recession and attacks.

Shares in United parent UAL Corp. fell 38 cents to $14.42 Thursday on the New York Stock Exchange – less than half their value from before the attacks.

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On the Net:

United at http://www.united.com

Union at http://www.iam141.org/ual.htm