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United Will Cut More Jobs as Part of Bankruptcy-Exit Plan

September 02, 2004|From Associated Press

United Airlines is poised to make more reductions to its workforce -- already 40% smaller than it was before the 2001 terrorist attacks.

The second-biggest U.S. airline confirmed Wednesday that job cuts would be part of the new business plan it is putting together this month as it renews its push to get out of bankruptcy protection.

Spokeswoman Jean Medina said no total for the cuts had been determined as discussions continued involving United's board of directors, creditors committee, labor leaders and other key stakeholders.

"It is clear that achieving cost competitiveness will require additional job reductions over time," Medina said. "But the details of how we achieve the savings we need and the potential impact on our workforce are still under discussion, so it would be premature for me to comment on specifics."

United, owned by UAL Corp., has about 62,000 employees, down from more than 100,000 three years ago.

Spokesmen for United unions said they were not aware of planned job cuts.

Operating in Chapter 11 of the U.S. Bankruptcy Code since December 2002, United has imposed more than $2.5 billion in annual wage and benefit cuts on its employees. It angered its employees this summer when, desperate to conserve cash, it stopped contributions to its pension plans and said last month that the funds probably would be terminated as it sought to attract financing.

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In other airline news:

* US Airways Group Inc. and its pilots union said they might reach agreement by tomorrow on a plan to cut $295 million in wages and benefits to help the carrier avoid a second bankruptcy filing.

* Continental Airlines Inc. and its pilots' union signed an unusual agreement Wednesday pledging to work together to keep the carrier aloft in these troubled times for the airline industry.

The agreement basically commits the No. 5 U.S. airline to open its books to the union in exchange for pilots making reasonable demands that will not endanger Continental's financial future.

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