United Airlines’ ground workers will find out next week about pay cuts
CHICAGO (AP) – United Airlines’ ground workers could find out by next week how much money they will make next year. Federal bankruptcy Judge Eugene Wedoff said Monday he would rule by Jan. 9 or 10 on whether United can impose wage cuts on the International Association of Machinists and Aerospace Workers.
Attorneys for the Machinists’ union plan to file the union’s opposition Tuesday to imposing pay cuts on the approximately 37,000 ground workers it represents.
“We are seeking a global solution to United’s problems, not a piecemeal solution,” said Machinists’ union spokesman Joseph Tiberi. “We are preparing to enter negotiations with United Airlines to find permanent solutions to the carrier’s problems.”
The wage dispute came as the airline disclosed to the court it would lose a record $3.2 billion for the year. Jack Brace, United’s chief financial officer, said Monday that the airline lost $2.8 billion through the end of November and expected another $400 million loss for December, according to the Chicago Tribune.
Previously United had projected a $2.1 billion loss, the same as in 2001.
United attorney Alex Demetrios said the airline would file its reply by Jan. 8 – after the company’s other unions have voted on accepting wage cuts.
Brace said the cuts would give the carrier time to negotiate changes in work rules and other cost-saving measures as it reorganizes under Chapter 11 bankruptcy rules.
“The pay-cuts we are talking about are only a piece of the overall package of changes we are looking for,” he said.
United has sought to quickly reduce its labor costs, which it says are the highest in the airline industry, as it attempts to return to profitability and meet goals established by lenders.
The airline has access to $800 million, but must meet cash flow goals to get the rest of the $1.5 billion package.
Union leaders for United’s pilots and flight attendants on Saturday urged their members to accept the company’s proposal to keep their contracts in exchange for voluntary pay cuts.
That plan calls for pilots and flight attendants to forfeit raises. All four unions, including flight dispatchers and meteorologists, also are asked to accept pay cuts by Jan. 8.
The pilots started voting on a 29-percent wage cut package on Monday. Meanwhile, flight attendants are scheduled Tuesday to start voting on a 9-percent wage cut.
United has until Feb. 15 to cut costs or it could lose the remainder of the $1.5 billion in interim financing a group of banks extended the carrier to allow it to restructure under Chapter 11 bankruptcy protection.
The Elk Grove Village-based carrier says it must reduce wages by $2.4 billion a year through 2008.
In another matter Monday, Wedoff continued a preliminary injunction barring large shareholders from selling stock in United parent UAL Corp. until a hearing Jan. 15.
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