CHICAGO (AP) -- Using the leverage of a looming bankruptcy-court deadline, United Airlines has secured the latest in a series of concessionary labor agreements with its unions.þþThe union representing baggage handlers and public contact workers became the largest group yet to come to terms, giving initial approval Tuesday to contracts that would save the bankrupt carrier $2.6 billion over six years.þþThat leaves United needing to conclude negotiations with only its mechanics union in order to achieve the austerity cutbacks it seeks, although the mechanics have historically been the toughest group to bargain with.þþTwo weeks before United's December bankruptcy filing, they were the only union to reject wage concessions as part of United's last-ditch bid to avoid bankruptcy.þþWith the industry in crisis and United moving to have a bankruptcy judge void contracts and impose its own tough terms on May 1, the airline has made swift progress recently toward labor agreements aiding its cause.þþAirline analyst Ray Neidl said United is progressing in bankruptcy and should be able to avoid liquidation ``unless something really terrible happens with the economy or terrorism or Iraq.''þþ``They're making slow progress,'' said Neidl, of New York-based Blaylock & Partners. ``My best guess is they get everybody on board and ultimately get an approval vote, because they (the unions) realize the alternative is the court mandating the cuts, which would be even deeper.''þþCEO Glenn Tilton said the accords announced Tuesday, which still need approval by the executive board of Machinists' union District 141 and its 23,000 members, are ``another essential step forward'' for a carrier that lost $3.2 billion last year.þþ``These are difficult economic times, especially for those of us in the airline industry,'' Tilton said. ``The IAM District 141 is showing true leadership by taking on a fair share of the sacrifice that is necessary to put United back on firm financial footing.''þþUnited is intent on reducing its labor expenses by $2.56 billion a year through 2008 so it can better compete with lower-cost airlines.þþThe machinists' negotiators indicated they had little choice but to swallow undesirable terms, facing the likelihood the bankruptcy court would impose United's terms in three weeks otherwise.þþLike United's pilots, flight attendants, dispatchers and meteorologists, the machinists will be asked to endure double-digit pay cuts and other givebacks in order to boost the ailing airline's prospects for recovery.þþThe agreements call for a 13 percent reduction in hourly wages, a 20 percent employee co-payment toward the cost of the traditional health insurance plan and work rules changes to allow greater use of part-time employees.þþTotal cost savings from pay, benefit and work-rule changes are expected to reach $445 million annually, United and the International Association of Machinists and Aerospace Workers said.þþ``We were determined to prevent the worst effects of bankruptcy from being unilaterally imposed on our members,'' said chief negotiator Randy Canale, president of the union group. ``A consensual recovery plan is the best way to rebuild United while preventing a court ordered 'cure' from bringing far more painful terms for IAM members and their families.''þþA ratification vote is expected to take up to three weeks.þþ
Source: NY Times
