The union representing United Airlines' baggage handlers, ground workers and mechanics said it will oppose UAL's (UAL) - Get Report latest bankruptcy court filing, which seeks interim wage cuts and other concessions, setting up a potential showdown that could leave the unions without contracts.
In its filing Friday, United asked the court to conditionally void collective bargaining agreements with its unions to reduce labor costs and satisfy United's lenders. United explained in its filing that it would drop its motion to void the contracts if the other unions -- including those of pilots and flight attendants -- ratify the interim agreement by Jan. 8, and the court imposes a 13% pay cut on the machinists' union. United said in the filing that the interim agreement would provide an additional $42 million in cuts beyond those sought in its motion, giving United additional "headroom" with which to operate through May 1, 2003.
In response, the International Association of Machinists and Aerospace Workers posted a letter to its members on its Web site, stating its opposition to United's motion.
However, according to news reports, leaders of the pilots' union met Saturday and approved a temporary wage cut of 29%, which will go into effect Jan. 1. The flight attendants' union is reportedly likely to follow the same course, albeit with a smaller wage reduction.
The carrier is pursuing a long-term agreement with all of its unions on $2.4 billion in annual concessions, which United contends are necessary for it to return to financial health. United has already reached agreement on the interim cuts with negotiators from four other unions representing United employees. The interim agreement is subject to ratification by each union and court approval.
The court has scheduled a hearing on Monday to consider United's motion.
UAL entered bankruptcy proceedings earlier this month when it failed to secure a billion-dollar loan guarantee from the federal government. It has claimed to be losing up to $20 million a day as it tries to reorganize.