The machinists' union at United Airlines said yesterday that its members had voted to give the company $794 million a year in wage and benefit concessions for six years.þþUnited has persuaded each of its labor groups to agree to the cuts that it sought going into bankruptcy court. It must now turn its attention to achieving savings in other areas and overhauling its business model.þþUnited has won reductions totaling $2.56 billion a year from its workers, including managers and nonunion employees.þþJudge Eugene R. Wedoff accepted the new contracts yesterday in bankruptcy court in Chicago.þþThe concessions go into effect today. Wage cuts among the unions range from 9 percent for the flight attendants to 30 percent for the pilots. The machinists are taking salary cuts of 13 percent. There will almost certainly be layoffs among some union members.þþÿWith this critical milestone behind us, we can now move quickly to implement the ratified changes in all of our labor agreements,ÿ Glenn F. Tilton, chief executive of United, said yesterday in a written statement. ÿI appreciate the tough choices and sacrifices all our employees are making to help ensure United emerges from bankruptcy and succeeds for the long term.ÿþþThe International Association of Machinists finished counting the votes early yesterday. The union represents 22,000 workers, with 10,000 in a mechanics sub-group. Of voters in that group, 70 percent supported the concessions, while 83 percent of voters in the other group — which consists mostly of baggage handlers — supported them.þþBefore the ballots were counted, there were questions whether the mechanics would support the concessions. They voted last Thanksgiving to reject concessions that United had said it needed to obtain a $1.8 billion federal loan guarantee. The rejection was one of several factors that pushed the airline to file for bankruptcy protection in early December.þþThe mechanics' unit has also been constantly threatened with a representation takeover by the Aircraft Mechanics Fraternal Organization, which says it has resisted concessions at Northwest Airlines. The National Mediation Board said yesterday that it would hold a vote allowing mechanics at United to choose their union. The voting will start June 12 and end July 14.þþÿOur members are providing United Airlines with the means and opportunity to successfully restructure and avoid liquidation,ÿ said Scotty Ford, president of the mechanics' unit. ÿThe problems and solutions of the airline's latest crisis go far beyond labor costs, but immediate action was needed to ensure the survival of this airline.ÿþþUnited, a unit of the UAL Corporation, has also been working to cut aircraft leasing costs, as well as renegotiate other contracts with suppliers. With the latest round of labor concessions, it no longer has the industry's highest unit-labor costs, or cost per available seat mile. The contract ratifications also mean there will be no labor opposition to its plans for a low-cost airline, a project that has the working name Starfish.þþDelta Air Lines now has the highest unit-labor costs, according to industry analysts. American Airlines previously topped it, as did US Airways, but they have won concessions from workers recently.þþOn Tuesday afternoon, Delta executives gave the Air Line Pilots Association a proposal for cost cuts. The plan includes a 22 percent hourly wage cut as well as changes to work rules, elimination of raises this year and next and a scaling back of health care benefits.þþMike Pinho, a union spokesman, said in an e-mail message to members that union leaders would review the proposal. The pilots are the only work group at Delta to have representation.þþJamie Baker, an analyst at J. P. Morgan Chase, said that negotiations with unions for concessions at Delta and Northwest would happen slowly, and that things would probably turn ÿuglyÿ before any progress was made. He said he did not expect to see the two airlines win concessions until next year.þþThe problem, he said, is that Delta and Northwest — which have had stronger cash positions than their rivals — cannot make a legitimate case that they are on the verge of bankruptcy, while American Airlines could.þþÿAchieving labor concessions is far easier when bankruptcy is an easier threat,ÿ he said. ÿIt's not at that point at Northwest and Delta.ÿþþ
Source: NY Times
