CHICAGO (AP) -- United Airlines' decision to stop funding its employee pension funds in bankruptcy stirred further turmoil Wednesday when a union leader who also serves as a company director said he would boycott United's impending pension deliberations.þþRandy Canale, whose machinists' union has threatened a lawsuit against United's move, said he would not attend a board meeting scheduled for Thursday while the union is preparing to take legal action.þþ``United is breaking a promise to employees to make another promise to lenders,'' said Canale, who is president of District 141 of the Machinists' union and holds one of two union spots on the company board. ``I will not be party to their illegal efforts.''þþOther union groups also have condemned United's pension funding cutoff, which the company says is necessary to preserve cash and more easily attract the exit financing it needs to get out of bankruptcy.þþUnited issued a statement expressing disappointment in Canale's decision and urging him to participate in the process.þþ``These are difficult times with difficult decisions to be made,'' the company said. ``We believe, as a member of the board of directors, he has a responsibility to all of our stakeholders, not just members of his union.''þþCanale's union represents 37,000 active and retired ramp, public contact, food service and security workers from United.þþThe pension controversy erupted this month when United first deferred a required quarterly payment of $72 million and then said last Friday that it plans no further payments in bankruptcy. The Elk Grove Village, Ill.-based airline had been facing more than $4 billion in required payments to the underfunded pension plans through 2008, including $725 million for 2004 alone.þþUnited said its new $1 billion interim financing package lined up last week effectively prohibits further pension contributions before it leaves bankruptcy. That drew a warning letter earlier this week from the Pension Benefit Guaranty Corp., which called that ``inconsistent'' with pension and tax laws. The agency and United are scheduled to meet Thursday to discuss the issue.þþUnited CEO Glenn Tilton defended the move to employees in a recorded message, saying it is essential that the company use its interim bankruptcy funding ``to preserve our liquidity and preserve our flexibility as we enter the slower fall and winter travel seasons.''þþBut he noted that no final decision on the funds has been made, acknowledging the importance of ``a motivated work force with market-competitive compensation and retirement plans.''þþ``A tremendous amount of work and analysis needs to be completed before any decisions can be taken regarding the plans,'' Tilton said in the message, recorded Tuesday. ``Any possible changes will be discussed thoroughly and openly with our union leadership and all of our other stakeholders, and those meetings are now being arranged.''þþ
Source: NY Times
