The largest union at United Airlines has rejected the company's proposed 10 percent wage cut, a move that could jeopardize an application the carrier has filed for a federal loan guarantee and an agreement on concessions that the airline worked out last month with its pilots.þþAt a meeting on Friday with United, the union, representing the machinists, turned down the carrier's proposal for pay cuts.þþÿIn our response to United,ÿ Randy Canale, the president of the United chapter of the machinists' union, said yesterday in a message posted for members, ÿwe rejected proposed pay concessions and challenged the notion that the plan represents equitable participation by all employee groups.ÿ Mr. Canale added that members had recently agreed to defer $498 million in retroactive pay, in effect giving United a loan.þþThe airline, part of UAL, and the machinists' union, which represents 23,000 workers, agreed earlier this week on what assets the company would use as collateral to back that retroactive payment, Mr. Canale said. The assets include ground equipment and ground vehicles.þþReferring to the recent rejection, a United spokesman, Joseph P. Hopkins, said, ÿWe are disappointed.ÿþþIn mid-June, United reached a tentative accord with its pilots' union, which agreed to $520 million in concessions over three years. That deal is subject to a vote by the union's 9,000 members, and it depends on the airline's getting a loan guarantee and concessions from other unions. The machinists' decision gives the pilots a reason to back out of their agreement, as does an earlier refusal by the flight attendants.þþThe airline is seeking the concessions to bolster its chances of receiving a federal loan guarantee. On June 24, United filed an application with the federal government asking for $1.8 billion of backing on $2 billion in private loans.þþUS Airways, which applied for $900 million in backing, is struggling with its own union issues. It is close to sealing an agreement with its pilots to cut $465 million a year in costs. But yesterday, the union representing passenger service agents said it was ÿfrustrated by management's unreasonable demands.ÿþ
Source: NY Times
