Jul 10, 2002 2 min read

CHICAGO (AP) – United Airlines’ largest union has rejected a 10 percent pay cut that was part of the carrier’s plan to right itself after losing $2 billion since the terrorist attacks. United had proposed the pay cuts among employee concessions it says are needed to help the company rebound financially.

But the machinists’ union on Tuesday said the wage-cut request won’t fly with its 35,000 members. The workers already have agreed to defer $498 million in retroactive pay to help the company return to financial stability, said Frank Larkin, spokesman for the International Association of Machinists and Aerospace Workers.

“While they are willing to look for cost savings, additional financial relief will not be coming from these employees,” Larkin said. “They feel … almost a half-billion in the form of concessions, constitutes a considerable sacrifice.”

The IAM, which represents United’s mechanics, aircraft cleaners and other workers, sent its decision on the wage cuts to United on Friday, Larkin said.

Officials with Elk Grove Village, Ill.-based United said the union’s rejection was disappointing but that the carrier would forge ahead with its plan for profitability.

“Our goal would be to have shared sacrifice from all of the people that work for United … making United a stronger company,” said spokesman Joe Hopkins. “We will continue to focus on our financial recovery plan and continue to seek broader participation in it.”

The union’s decision may jeopardize the tentative agreement by United pilots to take a 10 percent pay cut and United’s bid for a $1.8 billion federal loan guarantee.

The application is part of a program in which the government made $10 billion in loan guarantees available to airlines to help carriers in the wake of the Sept. 11 attacks.

United has said it needs concessions from all employee groups to show the government it could be financially stable again. The carrier has since ordered pay cuts for its 11,000 management and salaried employees, estimated at $430 million over three years, and reached a tentative pay-cut agreement with its 9,200 pilots worth another $520 million over three years.

Shares in United’s parent company UAL Corp. fell 78 cents to close Tuesday at $8.93 on the New York Stock Exchange.

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On the Net:

United Airlines: http://www.united.com

International Association of Machinists and Aerospace Workers: http://www.iam141m.org