United Airlines' Trial Gets Two-Day Recess
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.