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United Reaches Tentative Labor Agreements

Airlines: Packages include two 5% wage increases for pilots and machinists.

March 04, 1997|From Reuters

United Airlines said Monday that it reached tentative labor agreements with unions representing its pilots and machinists.

The carrier--the operating subsidiary of UAL Corp.--said the agreements with the Air Line Pilots Assn. and the International Assn. of Machinists and Aerospace Workers included two midterm wage increases of 5% for both groups of employee-owners. The first would become effective in July, while the second would to into effect in July 1998.

The company said that in 2000 the agreements also will restore wage rates for the two groups to levels that existed before July 1994, when the pilots, machinists, salaried and management employees agreed to wage reductions in exchange for stock in UAL through an employee stock ownership plan, or ESOP.

"By committing to restoring pre-ESOP wages, it ensures that employees, who have already sacrificed their wages to help keep United flying, will not be asked to do so twice," Mike Glawe, chairman of the pilots union's Master Executive Council at United, said in a statement.

Last month, United's 8,500 union pilots rejected a wage proposal that would have increased pay by 10% over four years. The machinists' union, which represents more than 12,000 United employee-owners, also rejected a similar proposal in early January.

Pilots union officials said the new pact represented a critical juncture in the development of the company as an employee-owned business.

Meanwhile, officials of the machinists union said they expected to receive prompt and overwhelming support for the agreement.

"It's been a long, and at times, somewhat rocky road that's gotten us to this point, but employee ownership means workers must be able to express their views freely and to have those views respected, and to share in the financial success of their company," said Ken Thiede, president of the machinists union District 141.

"I believe this agreement puts us closer to that goal than ever before, and I am optimistic about the future of United Airlines and its employee-owners," he said.

The agreements were announced after the close of the stock market. Shares of UAL rose $3.125 to close at $59.875 on the New York Stock Exchange.

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