United mechanics fight pay cuts

CHICAGO, Dec. 31 (UPI) -- Unionized mechanics and ground workers at United Airlines went to bankruptcy court Tuesday to challenge the airline's bid to void labor contracts and impose a temporary 13 percent pay cut.

United has warned of more layoffs and said it expects to lose a record $3.2 billion in 2002, surpassing the previous estimate of $2.5 billion.

United is seeking $2.4 billion a year in wage and benefit cuts from its five unions to meet strict cash-flow requirements imposed by lenders providing $1.5 billion in debtor-in-possession financing. Pilots, flight attendants, flight dispatchers and meteorologists have tentatively agreed to short-term pay cuts of 9 percent to 29 percent, but the International Association of Machinists and Aerospace Workers -- which represents 37,000 mechanics and ground workers -- rejected the give-backs.

IAM filed a motion objecting to United's effort to impose wage cuts under Section 1113 of the U.S. Bankruptcy Code.

"The IAM today filed its objection to United's 1113 (e) application ... " a release posted on the union's Web site said. "The permanent cost savings United Airlines is seeking from its employees goes far beyond the temporary wage reductions."

United has laid off more than 20,000 employees since the Sept. 11, 2001, terror attacks. It had 81,000 workers when it filed for Chapter 11 federal bankruptcy protection on Dec. 9. United has indicated the airline may make significant layoffs soon.

In a recorded telephone message to employees this week, CEO and Chairman Glenn Tilton warned of impending job reductions in the next few weeks, but did not specify which employees would be affected.

U.S. Bankruptcy Court Judge Eugene Wedoff scheduled a hearing on United's request and IAM's opposing motion on Jan. 10. Wedoff continued a preliminary injunction that prevents large UAL Corp. shareholders from selling their stock until a Jan. 15 hearing.

Lawyers for United asked Wedoff to block anyone from acquiring more than 5 percent of outstanding shares to prevent a hostile takeover of the airline.

On Monday, Wedoff extended until Feb. 15 a temporary order barring the trustee of the employee stock ownership plan from selling off UAL Corp. shares. United was 55 percent employee-owned in October but recent stock sales have cut the ESOP equity stake to about 28 percent. United must maintain at least 20 percent employee ownership for tax purposes should the carrier emerge from bankruptcy.