Union officials at United Airlines said yesterday that they were nowhere near reaching agreements with management on concessions, even though the company's chief executive has called such concessions important for securing a federal loan guarantee.þþOn Wednesday, John W. Creighton Jr., the chief executive, told a New York transportation conference that United, part of the UAL Corporation, might apply for a loan guarantee by the government's deadline of June 28 if it got concessions from its unions.þþThe $10 billion loan guarantee program was set up by Congress after Sept. 11 as part of a $15 billion airline bailout package. Federal officials demand a viable overhaul plan from an airline before approving its application. For most airlines, that means proving they can cut labor costs.þþÿIn recent weeks, we've made some considerable headway in securing employee commitments to a program of shared sacrifice, although the process has taken longer than I would have liked,ÿ Mr. Creighton said.þþBut by yesterday, those words sounded downright rosy compared with the talk from officials of several unions.þþThe International Association of Machinists, which represents 36,000 mechanics and other ground workers, said that labor cost cuts did not appear necessary for United's financial well-being.þþÿIf we're requested to meet with the company, we will,ÿ said Joe Tiberi, a union spokesman. ÿBut the leadership of the union does not see the need for employee participation in a United Airlines recovery program.ÿþþThe union has posted management's proposal on its Web site. Only months after agreeing to give the machinists the industry's most generous contracts, executives are asking for a 10 percent wage cut starting Sept. 1. But the concessions will take effect only if United secures a loan guarantee, has a reasonable level of available cash on Sept. 1, realizes further savings from other labor groups and cuts nonlabor expenses sharply.þþIn a letter to their members, machinists' union leaders said they believed ÿit is unwise to begin discussions regarding a recovery plan with a temporary chief executive officer in place.ÿþþMr. Creighton stepped from the board of United into the chief executive post last October, when his predecessor, James E. Goodwin, was dismissed because of his inability to deal with labor. United is now searching for someone to replace Mr. Creighton.þþCollective bargaining rules require the machinists to negotiate in good faith with management, and agreements reached during such meetings must be presented to members for ratification. But labor officials said in their letter that ÿthe collective bargaining agreements do not require the I.A.M. leadership to endorse the plan, nor will we.ÿþþIn the last year, United and the machinists hammered out two contracts that set industry precedents. The first was ratified in February, the latest last month. Those contracts had been under negotiation for two years.þþUnited has been talking more with its pilots than with any other labor group. Steve Derebey, a union spokesman, declined to give details of the company's proposal, but said that there were still ÿsignificant issuesÿ preventing the two sides from reaching an agreement.þþAs for the flight attendants, they have not even received a proposal, said Bobbie Pilkington, secretary-treasurer of their union. Her statement directly contradicts Mr. Creighton's speech, in which he said, ÿWe've made proposals to the I.A.M. and to all other groups of represented employees.ÿþþÿNobody has given us anything at this point,ÿ Ms. Pilkington said. ÿMost people view employee concessions as just paying for bad management,ÿ she said. þþBut Ms. Pilkington said that her union would continue to deal with Mr. Creighton if asked to do so, even if he is scheduled to leave his post.þþA spokesman for United, Joe Hopkins, said the airline would not comment on negotiations.þþLike United, US Airways has said it needs concessions from its labor groups to get the $900 million loan guarantee it applied for on Monday. But US Airways has been able to move more quickly on labor talks because it is in much worse financial shape, and its executives do not have to worry about the fact that employees own 55 percent of company stock, as is the case with United.þþSeveral analysts say that United needs to file for a loan guarantee not so much to raise necessary cash, but because the application would give it more leverage in wringing concessions from labor. At the end of the first quarter, United had $2.9 billion in cash and was using up just under $5 million a day.þ
Source: NY Times
