United Gets More Concessions

The union representing mainly gate agents and baggage handlers ratifies a pact.
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United Airlines'

parent

UAL

(UALAQ)

has secured the last of the labor concessions it was seeking as it attempts to exit bankruptcy.

On Thursday the International Association of Machinists and Aerospace Workers said its members at United ratified new contracts designed to save the airline money. The union represents some 19,500 United ground workers, primarily gate agents and baggage handlers.

Neither the airline nor the union would say how much the new contracts will save the carrier. United had been seeking concessions worth about $175 million a year.

In two and a half years in Chapter 11, UAL has taken drastic restructuring measures. The company has extracted more than $3 billion in annual concessions from workers and gotten government insurers to take over its pension plans, a move that will reduce benefits for many employees and retirees. These actions have generated worker resentment and helped prompt lawmaker efforts to reform the nation's pension laws.

"As United continues to build momentum toward exit from Chapter 11, today's ratification by the IAM is an important step," said United spokeswoman Jean Medina, in a statement. "This agreement means that we now have ratified, consensually negotiated collective bargaining agreements with all our labor groups, bringing a difficult phase of our restructuring to a close. We commend the IAM for their hard work and creativity in developing solutions to the pension issue while meeting United's financial needs."

The union sounded a less conciliatory tone. "Our members and retirees have repeatedly provided United Airlines with the means to successfully restructure and exit bankruptcy, only to see it squandered," said Randy Canale, president of IAM District 141. "We have reached the limit of our members' sacrifice and patience. If United management cannot utilize the cost savings their employees provided to reverse course and become competitive, they must be replaced with more capable individuals."

United has said it plans to file a plan of reorganization with the bankruptcy court around Aug. 1. Shares fell 5 cents, or 3.2%, to $1.50.