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United, Union Bargain Amid Strike Threat

If the airline and 20,000 ground workers don't reach a contract agreement, a judge could rule today on wage and benefit cuts.

May 31, 2005|From Associated Press

United Airlines neared a labor deadline today without a contract agreement with its largest union, running the risk of a threatened strike by 20,000 ground workers.

Negotiators for United Airlines and the International Assn. of Machinists and Aerospace Workers scheduled another bargaining session for Monday night in an attempt to resolve the remaining differences over the terms of a new five-year contract.

Absent an agreement, U.S. Bankruptcy Court Judge Eugene Wedoff has said he would rule this afternoon on whether United can break the union's contract unilaterally to impose lower wages and benefits.

The IAM contends such an action would give it the right to strike, and union leaders served notice again Monday that the workers are poised to walk off their jobs if necessary.

"Our goal remains to reach a fair settlement for IAM members that would make a Bankruptcy Court ruling to abrogate our contracts unnecessary," Randy Canale, president of IAM District 141, said in a communique to members Monday afternoon. "However, Judge Wedoff is scheduled to issue his ruling [today] ... at 1:30 p.m. CDT, and we must be prepared if he rules in United's favor."

United spokeswoman Jean Medina said that the two sides were in contact throughout the holiday weekend and that the company remained hopeful of a settlement.

United, a unit of Elk Grove Village, Ill.-based UAL Corp., was seeking $175 million in annual concessions from the machinists union to complete a companywide package of $700 million in yearly labor savings.

The key remaining hurdle was a pension plan to replace the defined-benefits fund the company is terminating.

The company wants the money put into an investment-based 401(k) savings plan, but the union says it should be placed in its own defined-benefits fund, the IAM's National Pension Plan.

Another key decision awaiting United is the result of a contract ratification vote by its 7,000 mechanics, to be announced shortly after the electronic balloting closes this morning. The mechanics were voting on whether to accept a five-year pact entailing $96 million in annual reductions and 3.9% pay cuts on top of the 14% reduction in 2003.

Interim contracts for both employee groups expire today.

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