Machinists Sour on Bid to Buy United : Union Expresses Doubts About Pilots' Proposal

Times Staff Writer

United Airlines' machinists union said in a letter released Wednesday that it has all but decided against participating in a bid by United's pilots to buy the airline for $4.5 billion.

"We have many problems and reservations with your proposed purchase of United Airlines and do not feel our participation would be in the best interest of our membership," Robert F. Peterpaul, general vice president of the International Assn. of Machinists and Aerospace Workers, said in the letter. "We do not feel we should act as an investment banker for our members' monies."

The pilots made the offer to buy the airline, a subsidiary of UAL Inc., last week.

The four-page letter, addressed to Capt. F. C. Dubinski, chairman of the United Master Executive Council of the Air Line Pilots Assn., said: "If employees want to own a company, that is their independent or collective action, but we have some serious problems with using the union as an investment vehicle."

Still Considering Proposal

The letter said the machinists, whose union represents 19,000 mechanics and baggage handlers employed by United, were "not closing the door entirely and still have your program under review."

The pilots expressed disappointment in the machinists' action. In a statement, James E. Waters, a United pilot acting as spokesman for the group, said: "Historically, the IAM has embraced employee stock option plans when it is too late to save the company involved. . . . Our goal is to maximize employee participation, and we welcome any employee who wants to get in this plan."

He said the pilots hope that "at some point in the future . . . (the machinists) will change their minds." UAL declined to comment.

Meanwhile, Dubinski and other ALPA members met in New York with security analysts to discuss their bid to buy United. They said during the session that they have raised $3.2 million to pay administrative costs associated with their $4.5-billion offer for the airline and that $1.5 million of the amount raised has been provided by famed criminal lawyer F. Lee Bailey. It was Bailey who first suggested to the pilots two years ago that they buy the airline.

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