A federal bankruptcy judge called a two-day recess Tuesday in United Airlines' bankruptcy court trial, giving the carrier and its machinists' union additional time to work out a new contract before he rules on imposing lower pay and benefits unilaterally.
The trial was pushed back as negotiations intensified between United and its machinists' union, the sole remaining employee group not to have agreed to a long-term contract after the mechanics' union consented to a tentative five-year deal Monday night.
United successfully sought the postponement in testimony until Thursday, hoping to avert a divisive ruling that could trigger a threatened strike.
The company was seeking annual wage and benefit cuts totaling $176 million over five years from machinists as part of its push to reduce companywide labor costs by another $700 million before it comes out of bankruptcy.
Mechanics began voting Tuesday on the tentative deal agreed to by their negotiators. The ratification vote lasts until May 31. The union, representing about 7,000 United mechanics, also has threatened a strike if the deal is rejected and the existing contract is terminated without their approval.
The agreement gives the carrier the $96 million in annual wage and benefit cuts it was seeking. Mechanics would take 3.9 percent pay cuts starting June 1, on top of 14 percent reductions two years ago. Reduced benefits, such as sick days and holidays, would account for the rest of the labor savings.
A 5 percent defined-contribution pension plan is part of the mechanics' tentative contract, replacing the defined-benefits plan that United eliminated last week.
The union also would get $40 million in convertible notes upon United's exit from Chapter 11 bankruptcy.
Obviously, Judge Wedoff wants to see this resolved "peacefully" as well. Lets hope the IAM and United can get something done in the next two days, in this case, time really is money. But if nothing more, this gives UA employees a little breathing room in a very tense situation.
Bicoastal From , joined Dec 1969, posts, RR:
Reply 1, posted (10 years 9 months 7 hours ago) and read 1868 times:
Just an FYI for everyone.....United IAM members are neither machinists nor mechanics. The IAM represents ramp servicemen/women, customer service agents and reservations agents. If they go on strike, the airline shuts down until they come back.
Ckfred From United States of America, joined Apr 2001, 5780 posts, RR: 2
Reply 2, posted (10 years 9 months 4 hours ago) and read 1808 times:
I was watching the ABC affiliate in Chicago this evening. Some of the rank and file of the IAM seemed awfully intent on striking. The theme was that they are tired of the givebacks and feel that management needs to come up with ideas that will grow the airline, rather than cutting costs by having the employees to give up everything they've achieved.
I also read that the last tentative contract with the AMFA was rejected by 57% of the membership, so ratification of this agreement is not a done deal.
The gravity of the situation may very well cause the unions to realize that a strike would only bring about the demise of UA. But a lot of employees seem to think that they have nothing to lose by a strike.
Apparently, UA is already contacting its business accounts to prepare contingency plans, if one of the unions walks. Some passengers interviewed said that they are becoming wary of booking UA for future travel. That isn't good.
Quoting Ckfred (Reply 2): becoming wary of booking UA for future travel
And they should! US Airways is looking like the good boy to many people now. It would seem as if United Airlines, is about to face ts biggest challenge yet. In any case, the airline will make or break over the next few weeks!