CHICAGO (Reuters) - United Airlines parent UAL Corp. (UAL.N) has agreed not to try to reject collective bargaining agreements with machinists if it files for bankruptcy unless events threaten its solvency, according to details released Thursday on two union Web sites.þþLeaders of the two International Association of Machinists units that represent United mechanics, ramp employees and customer service workers on Wednesday reached agreement with United for $1.5 billion in wage cuts over 5-1/2 years.þþUnited, the No. 2 U.S. airline, declined to comment on the details. The IAM said the pact extends current contracts to mid May 2008, includes wage cuts, cancels pay increases and reduces vacation pay in exchange for stock options.þþThe agreement is part of a broad $5.8 billion of cuts agreed to by a coalition of unions. The machinists were the last of the major unions to reach a deal with United as it tries to avoid bankruptcy. Machinists have scheduled a vote of the 37,500 rank-and-file members Nov. 27.þþElk Grove Village, Illinois-based United needs the labor cuts to help it win backing for a $1.8 billion in federal loan guarantees for a private sector loan of up to $2 billion. The agreements are subject to United receiving loan guarantees.þþUnited also is working on $2 billion in debtor-in-possession financing should it need to file for bankruptcy protection.þþAccording to the Web sites for the IAM District 141 and District 141M, ramp and customer service workers would take 6 percent pay cuts and mechanics 7 percent cuts on Dec. 1.þþBase pay increases in 2003 and 2004 would be canceled and wages would gradually snap back to current levels from 2004 through 2007. The groups also would agree to forego some vacation pay from 2003 through 2007.þþThe agreement also provides for United, the machinists and pilots union to consider changing the employee stock ownership plan to allow employees to sell shares while actively working for the company and diversify investments.þþThe cuts from the machinists compare to 18 percent pay cuts United pilots have ratified totaling $2.2 billion and a $412 million package of pay cuts tentatively approved by flight attendants. United has announced pay cuts for salaried and management workers totaling $1.3 billion over the same period. þþþ
Source: NY Times
