- The Washington Times - Thursday, May 25, 2000

US Airways Group Inc. cleared a significant hurdle to UAL Corp.'s purchase of the Arlington, Va., airline when it hammered out contracts with two of its three major labor unions in the past year, airline analysts said yesterday.

It agreed to a contract with the union representing its 7,000 machinists in October and with the union representing 9,000 flight attendants in March.

"The new labor agreements were the thing that allowed this deal to go forward," said Darryl Jenkins, George Washington University economist.

The two companies began acquisition talks in November, chairmen of the two companies said yesterday.

US Airways spokesman Richard Weintraub said UAL's takeover and negotiations between US Airways and its union workers were unrelated.

"Those were agreements we needed to get done," he said.

New labor agreements may have helped the leadership in both companies iron out details of the $11.6 billion takeover of US Airways by United Airlines' parent company, but union workers are studying the terms of the proposed deal.

The three unions representing an estimated 31,000 union workers at US Airways the International Association of Machinists, Association of Flight Attendants and the Air Line Pilots Association are waiting to see the acquisition's details before approving or criticizing the deal.

"We're cautious," said Roy Freundlich, spokesman for Chris Beebe, chairman of the governing body of the union local representing US Airways pilots. "We need to study the transaction and see how it affects the career expectations of US Airways pilots."

Machinists Vice President Robert Roach Jr. said the union will scrutinize the deal "line by line."

"Our number-one priority is to protect the interests of IAM-represented members of both US Airways and United," he said.

But union members also said the deal, which must earn regulatory approval, could benefit union workers. That's because relations between US Airways and its union work force are strained, union members said.

"I'd say [relations] are contentious," flight attendants spokesman Cynthia Kain said. "United has a different relationship with its flight attendants."

The company's 9,000 flight attendants reached an agreement with US Airways in March on a five-year labor contract after 3 and 1/2 years of negotiations. The flight attendants had warned that if a fair agreement were not reached by a deadline they imposed, they would stage random walkouts. US Airways countered by saying that if flight attendants walked off the job, the company would shut down the airline, a move analysts said would have cost the company $15 million a day.

"The unions don't like [US Airways Chairman Stephen] Wolf. He's very difficult to deal with," Mr. Jenkins said.

Mr. Wolf said he will leave once UAL completes its takeover of US Airways. He left UAL in January 1996 to take over the nation's sixth-largest carrier.

UAL has a less-contentious relationship with its unions, Mr. Jenkins said.

But that doesn't mean US Airways' unions are rushing to be part of UAL.

"We've had a strained relationship with management. We've had our fair share of disputes over the years, but at this point we're still able to talk with them, even if it does take forever. I'm not sure I'd characterize United's management as any better than US [Airways] management," Mr. Freundlich said.

UAL is in contract talks with the union representing its pilots, who are refusing to work overtime.

Mediated negotiations between the union and company begin June 5.

Even United Airlines pilots issued a cautious tone yesterday, saying they are concerned about the impact of the deal on that company's pilot-seniority list.

"The proposed merger could require a difficult and potentially disruptive negotiation between the pilot groups at United and US Airways over the integration of the US Airways pilots into the United pilot-seniority list," said Rick Dubinsky, chairman of the governing body of United Airlines pilots union.

Mr. Dubinsky sits on UAL's board of directors, but he hasn't disclosed how he voted on the company's proposed purchase of US Airways.

Mr. Wolf did make a pitch for union support yesterday when he said during a news conference that negotiating job-protection guarantees for US Airways workers helped the two companies come to terms on the deal.

Mr. Wolf said UAL's purchase of US Airways includes a no-furlough guarantee that prevents US Airways workers from losing their jobs.

UAL Chairman James Goodwin said the two companies "intend to work aggressively to solve [work force] issues so we can put these two work forces together."

United's 100,000 employees and 45,000 US Airways workers will be merged into a single company, the chairmen said.

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