The leaders of United Airlines' pilots union have agreed to accept a 15 percent pay cut and not oppose the elimination of their pensions, setting an important precedent both for ongoing negotiations with other United unions and for rival airlines that also are trying to slash labor costs.þþIn exchange, United will make bigger contributions to a new retirement plan and will issue the pilots $550 million in convertible notes once the carrier emerges from bankruptcy.þþThe union's 6,400 members, who accepted a 30 percent pay cut last year, could begin voting on the latest concessions before the end of the month.þþOther labor groups distanced themselves from the deal, and the federal agency that would have to take over United's pensions blasted the agreement because it would strengthen the airline's effort to walk away from its obligations.þþIn November, the airline told pilots it needed $191 million in annual savings as part of an effort to cut $725 million in costs a year. The new concessions would save it $180 million a year.þþThe pilots also said they would give up extra pay for late-night flying. The concessions are difficult, but the union was willing to work with the company because United has shown a willingness to cut costs in other areas, said Mark Bathurst, chairman of the union's governing council.þþWhat's next: United will try to wring the same concession on pension plans from its other unions. The pilots would be let out of their promise not to oppose the termination of their pension plan if the carrier agrees to continue pensions for other unions.þþ
Source: Chicago Tribune
