UAL’s Non-Union Workers Join Takeover Bid

In a development that united all of UAL Corp.’s employees in the attempt to buy the airline company, UAL’s non-union workers said Wednesday that they will support the unions that initiated the takeover bid.

The 25,700 non-union employees--reservation clerks, office workers and management personnel--agreed to accept $50.5 million in wage cuts and changes in certain pension and other benefits. In return, if the buyout is successful, they will get 14.26% of the equity in the company, which is the parent of United Airlines. They will also be able to name one member to UAL’s 15-member board.

The non-union employees had complained that they felt left out of the negotiations to buy the company. UAL has a total of about 73,000 employees.

The unions and UAL’s present board agreed in April on terms for the proposed $4.4-billion buyout. Present shareholders would receive $201 per common share if the deal goes through.

Under the agreement, the unions have until Aug. 9 to arrange financing for the deal. If they are successful, the buyout group, called the United Employee Acquisition Group, will have another four months to close the deal. The three unions involved represent United’s pilots, machinists and flight attendants.

Lisabeth Weiner, a spokeswoman for the First National Bank of Chicago which acted as financial adviser to the System Roundtable, the entity representing UAL’s non-union workers, said they had felt “vulnerable.”

“They felt exposed,” she said. “They did not have a sense of hope. They felt if the unions had succeeded they might have lost their job security. They had no guarantee that if there were a economic downturn in two years their jobs were secure.”

Stephen Fraidin, a lawyer who represented the group, said “both sides acted in a constructive and efficient way to resolve a potentially dangerous situation.”

Hans J. Plickert, an airline analyst with the Transportation Group, an affiliate of Paine Webber, said the non-union employees “wanted to make a point--that they are part of the company, too.”

Both UAL and the union group declined to comment on the non-union employees’ action.

Earlier this month, five big New York banks--Citicorp, Chase Manhattan Corp., Bankers Trust Co., Manufacturers Hanover Corp. and Chemical Bank Corp.--were reported to be considering providing $500 million each in financing for the proposed takeover.

However, even if that financing is pinned down, more than half of the total needed would remain to be arranged, and some observers see major obstacles ahead.

Sources close to the situation maintain that the five banks might not be able to find other financial institutions to participate in a financing syndicate or might back out themselves. Last October, a proposed buyout of UAL by the pilots’ union and the company’s management fell apart when financing was not forthcoming. The amount needed then was $6.8 billion.

One source said the deal has little hope of being completed unless an outside equity investor can be found. It is unlikely that the banks will become involved without such an investor.

“Every one of these banks is having credit problems,” the source noted. “Each has highly leveraged transactions, and they are overextended in real estate.”

NEXT STEP UAL Corp. unions still have three weeks to line up financing for their proposed buyout of the parent of United Airlines. Should they fail, the current management, headed by Chairman Stephen M. Wolf, would presumably continue to run the company. Otherwise, Gerald Greenwald, a former Chrysler Corp. executive hired by the unions to head their effort, would succeed Wolf.