United, Unions Step Up Bargaining
UAL Corp.’s United Airlines and its ramp workers’ and mechanics’ unions intensified contract negotiations Thursday, pushing to settle their differences before a Bankruptcy Court rules on their high-risk showdown over labor costs.
Against the urgent backdrop of strike threats by three employee groups, United held separate contract talks at Chicago hotels with the Aircraft Mechanics Fraternal Assn. and the International Assn. of Machinists and Aerospace Workers even as a courtroom trial pitting management against employees unfolded.
The machinists’ union said recent progress pointed to a possible agreement by the time the trial ends next week, which would avert the need for a ruling likely to carry grave consequences for both the airline and its workers.
“The only place this is going to get resolved is at the bargaining table, not in the courtroom,” said Randy Canale, president of the union’s District 141, representing 20,000 United baggage handlers and ramp and public contact workers.
United declined to discuss the status of either set of contract negotiations except to say that they were ongoing.
The nation’s second-largest airline is seeking approval from Judge Eugene Wedoff, after an expected weeklong trial, to replace the two existing contracts with its own lower-cost versions even without unions’ consent. But a ruling in its favor could provoke a strike by employees that analysts say could be fatal to United.
The other outcome, a verdict keeping temporary contracts intact, also would be a setback for both sides because United needs long-term deals in place to secure the $2 billion in loans it needs to exit bankruptcy.
United Chief Financial Officer Jake Brace, testifying Thursday in the trial’s second day, said the company had exhausted all other options before concluding that it needed to make labor cutbacks for the second time in two years to get enough savings to draw bankruptcy exit financing.
Aircraft Mechanics Fraternal Assn. negotiators presented a new contract proposal to United and were awaiting a response Thursday.
