UAL seeks emergency OK of changes to mechanics' bargaining agreement

By Caroline Salls

Pittsburgh, May 31 - UAL Corp. requested emergency approval of its agreement with the Aircraft Mechanics Fraternal Association that modifies wages and benefits under the collective bargaining agreement, according to a Tuesday filing with the U.S. Bankruptcy Court for the Northern District of Illinois.

The modifications reduce the pay of all AMFA-represented employees by 3.9% effective June 1. Pay would not begin to increase again until 2006.

The agreement also provides for modified holiday time, sick leave and overtime compensation.

Also under the agreement, the union waived any claims that termination of the United Air Lines, Inc. Union Ground Employees' Retirement Plan would violate the collective bargaining agreement.

For the benefit of the employees, United has agreed to a revised profit sharing program that pays out to employees if the company exceeds specified profit margins.

According to the company, the agreed upon changes are necessary to provide "a critical portion of United's long-term earnings improvement and help United satisfy its DIP financing covenants, obtain exit financing and cope with the difficult airline industry environment."

UAL, the Chicago-based parent of United, filed for bankruptcy on Dec. 9, 2002 in the U.S. Bankruptcy Court for the Northern District of Illinois. Its Chapter 11 case number is 02-48191.

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