Union Warns of Strike if Its Bid for UAL Fails

The leader of the machinists union at United Airlines said a strike “is a very real possibility” if a union effort to buy parent UAL Corp. fails.

In a letter sent to United’s machinists Friday, union President Louis R. Schroeder tried to rally support for the buyout, urging union members to write to UAL’s directors. Schroeder said a failure of the union-led buyout would probably lead to a costly financial restructuring of the company and difficult negotiations for higher wages that could bring a strike.

The letter raised the possibility that the buyout effort might fail. The unions, whose members include United’s pilots, mechanics and flight attendants, are seeking bank financing for their $175- to $180-a-share offer. They face an Oct. 9 deadline to present their offer to UAL’s directors.

Schroeder, in the letter, said that the union bid faces obstacles but that “there remains a real and substantial possibility” it will succeed.

Echoing a charge made by United’s pilots, Schroeder accused UAL Chairman Stephen M. Wolf of trying to undermine the union buyout. “We have heard that Steve Wolf has been telling the board that employees no longer support this acquisition,” Schroeder said. “I do not think Wolf is correct.”

If the buyout fails, UAL might be forced into “a major financial restructuring” to satisfy arbitragers, or stock speculators, who invested in UAL, Schroeder said. There has been speculation that, if the union fails to obtain financing for its bid, UAL’s directors might raise money for a share repurchase by selling aircraft and leasing them back.