Congress May Enter UAL Labor Dispute
United Airlines’ mechanics may reject a new contract today and force Congress to take the rare step of forcing a settlement to block a strike that could cripple the nation’s second-biggest airline and the domestic air-travel system.
Union leaders said the 10,600 mechanics might indeed reject the contract that was proposed by an emergency presidential board. That would give the sides only a week to find another solution before the mechanics are free to walk out. Also, 2,200 cleaning and janitorial workers at United, the main unit of parent company UAL Corp., are voting on this contract.
“My sentiment tells me they will reject it,” Thomas Buffenbarger, president of the International Assn. of Machinists, told reporters after a speech to the National Press Club in Washington. “If they reject the contract, they will vote to strike.”
UAL’s new chief executive, John Creighton, urged the mechanics to approve the offer and called the vote “historic, in a way, because it’s a choice between moving forward and stopping in our tracks.” In a recorded message to United’s workers, Creighton said, “I’m not going to kid anyone. This vote is important to the future of this company.”
UAL, which lost $2.1 billion last year because of the weak economy and the travel slump triggered by the Sept. 11 terrorist attacks--a record loss for a U.S. airline--is still losing about $10 million a day. Pressure is on the carrier and Creighton to further slash United’s operating expenses until travel rebounds.
A work stoppage at United would be felt worldwide. Based in the Chicago suburb of Elk Grove Village, United has about 1,650 flights a day and is also the biggest carrier serving Los Angeles International Airport, handling 20% of its traffic.
If the mechanics vote against the pact and United and the IAM are unable to reach a deal, Congress probably would be called upon to settle the matter to avoid further disrupting the air-travel system. It’s a situation Congress has not faced since the airline industry was deregulated in 1978, according to Edgar James, general counsel of the Allied Pilots Assn., the union for the pilots of AMR Corp.’s American Airlines.
But organized labor abhors the idea of congressional intervention in the collective-bargaining process, and Buffenbarger said there would be “hell to pay” if Congress imposes a settlement. He indicated the mechanics might then do only the minimum work that the contract requires--which effectively could cause a legal work slowdown that would disrupt operations.
The mechanics are voting on a contract proposed by an emergency board President Bush convened to block the mechanics’ initial plan to strike Dec. 20. The board recommended an immediate 37% pay hike for the mechanics, who haven’t had a raise since 1994, to put them on par with peers at other big carriers.
United reluctantly approved the plan. But many mechanics felt union negotiators “could do better than what the [emergency board] proposed,” and found the retirement benefits and job-security provisions inadequate, IAM spokesman Joe Tiberi said. Union leaders also have insisted that their members get the new contract before they agree to any wage and work-rule concessions United is seeking from all of its employees to ride out the travel slump.
The five-year United contract proposed by the emergency board includes an immediate raise in senior mechanics’ wages to $35.14 an hour from $26.50, with additional increases in the coming years.
The offer “is a very generous contract,” Raymond Neidl, an analyst at ABN Amro in New York, told clients Monday. Noting the prospect that it may be rejected, he said, “The mechanics, in our opinion, seem to be on a suicide mission that could take the company down if a rejection leads to a strike.”
Congress has several options. It could vote to simply extend the “cooling-off” period during which the two sides would keep negotiating. It could mandate binding arbitration on the airline and union. Or it could impose the emergency board’s proposal. But any congressional involvement would be problematic: Congress is in recess starting Thursday, and the strike could start next week.
Results of the vote are expected late tonight or early Wednesday.
Despite the labor tension, UAL’s stock rose 39 cents, to $12.69 a share, Monday on the New York Stock Exchange.
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Times wire services were used in compiling this report.
