- The Washington Times - Sunday, December 1, 2002

From combined dispatches
CHICAGO Thousands of flight attendants yesterday voted to accept $412 million in pay cuts over 5 years from financially troubled United Airlines.
About 87 percent of the United Airlines' flight stewards and stewardesses voted "yes" to a new contract with United, which is seeking a $1.8 billion bailout from the federal government to stave off bankruptcy. About two-thirds of the country's second-largest airline's 24,000 flight attendants voted.
"The flight attendants have made the difficult but necessary decision to contribute our part in the financial restructuring of United," said Greg Davidowitch, a representative of the Association of Flight Attendants.
United Airlines' chief executive officer praised the result.
"This is something that can't be done without cooperation of all our employer groups," Glenn Tilton said in a statement.
On Wednesday, mechanics undermined United's plans to cut costs by rejecting $700 million in proposed pay cuts over 5 years for themselves.
The mechanics' decision jeopardizes all of the $5.2 billion in pay-cut agreements United won from other unions, including pilots. All the unions involved said the givebacks were contingent on every union's taking part in the financial sacrifice and they all expire Dec. 31 unless mechanics sign on.
The rejection raises the chances of bankruptcy as a $375 million debt payment comes due tomorrow, although a grace period could extend that deadline to Dec. 16.
On Friday, shares of UAL, United's parent company, sank as low as 31 percent, and Standard & Poor's downgraded the company's long-term debt rating deeper into junk status. UAL shares closed off $1.12 at $2.51, making it the biggest percentage loser on the New York Stock Exchange. The stock has lost 92 percent of its value since its peak before the September 11 terrorist attacks.
United and the International Association of Machinists and Aerospace Workers were scheduled to meet today to discuss the mechanics' rejection. Union spokesman Frank Tiberi said the flight attendants' vote would have no effect on those negotiations.
The airline says its application for a $1.8 billion federal loan guarantee is imperiled if all unions cannot agree on wage concessions.
A ruling is expected any day on the guarantee, which cash-poor United says it must have to obtain $2 billion in private loans. The alternative is bankruptcy, the airline has said.
In a message recorded after the mechanics' vote and before the attendants' approval, United Chief Executive Glenn Tilton warned that a bankruptcy filing could dramatically alter what he called a "cooperative" negotiation process.


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