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UAL mechanics want raises
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November 20, 2001: 12:12 p.m. ET
Union seeks industry-leading pay despite post-attack losses, layoffs.
By Staff Writer Chris Isidore
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NEW YORK (CNN/Money) - The union representing mechanics at United Airlines says its members still expect a significant raise to an industry-leading contract, despite soaring airline losses since Sept. 11 and the call for concessions by the company's new chief executive.
Joseph Tiberi, spokesman for the International Association of Machinists, said that the financial condition of the airline, including plans to lay off about 20 percent of the staff, do not change the union's goals to improve on the labor contract that was reached in 1994. He said that other labor groups at United have won raises since 1994, and that it is unfair to the IAM to expect it to make the same sacrifices being sought from other United employees.
"Those that are left deserve to have the industry-leading contract we were promised," he said. "They haven't changed their goals since Sept. 11. We need to be brought up to 2001 wages before talk like that (of concessions) will even be entertained."
But a spokesman for President Bush said Tuesday that the president will prevent the union from wielding its threat of a strike, a threat that will greatly undercut any ability the union has to win the gains it is seeking.
Monday evening the union rejected an offer from federal mediators of binding arbitration to settle negotiations for a new contract for about 15,000 mechanics and related employees, including those who have been furloughed from the airline since the Sept. 11 terrorist attack.
The union action started a 30-day cooling-off period after which the union would normally be allowed to strike. But the National Mediation Board, which oversees labor relations in the industry, said if there is no labor deal reached in the next 30 days it would ask President Bush to name a "presidential emergency board," which would stop a strike while it spent another 60 days weighing the two sides' positions.
Bush spokesman Ari Fleischer said Tuesday he would follow that recommendation.
"The president is deeply concerned, especially at this time of year, about any disruption in airline service to the traveling public," White House spokesman Ari Fleischer said at a Tuesday briefing. "He's also concerned about any negative impact a strike could have on the economy."
Shares of UAL Corp. (UAL: down $0.70 to $16.02, Research, Estimates), the employee-owned parent of United, still fell about 4 percent in Tuesday trading.
The union criticized the NMB action, saying it is undemocratic and that it only delayed, and did not block, the chance of a strike. But after the PEB recommends a new labor deal, Congress can impose those terms on the union and the company.
Tiberi said such a move would be unprecedented. Congress has already shown a willingness to help financially ailing airlines with a bailout package that included $5 billion of direct aid and $10 billion of potential loan guarantees.
United spokesman Chris Brathwaite said the airline would not discuss what management is offering the union in the current negotiations. An industry source, who spoke on the condition he not be identified, said that the mechanics and the company were close to reaching a labor agreement when the Sept. 11 attack derailed the talks.
The airline, which had been the biggest money-loser among airlines even before the attack, had been promising an industry-leading contract for its mechanics as recently as Aug. 24. But the statement it issued after the NMB statement Monday evening said management is "eager to reach an agreement that will satisfy (the mechanics)."
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In addition to the 15,000 mechanics at United, the IAM represents about 30,000 customer service employees, ramp workers, and other employees who are covered by a different contract that is also under negotiation.
Management's relations with the IAM are complicated by the fact that those employees own a bit more than 20 percent of the employee-owned airline through the employee stock ownership plan, and the union has a representative on the board of directors of UAL Corp., United's parent company.
The union recently sought and achieved the replacement of UAL Chairman and CEO James Goodwin after Goodwin issued a letter to employees saying the future of the company was at risk due to losses.
The union praised the appointment of Jack Creighton as the new chairman and CEO upon his appointment. But since his appointment Creighton has spoken of the need for concessions by the airline's union groups. 
Reuters contributed to this report.
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