- The Washington Times - Monday, December 2, 2002

CHICAGO (AP) United Airlines and its mechanics union met behind closed doors yesterday as the nation's No. 2 carrier pressed for hundreds of millions of dollars in cost cuts it deems necessary to stay out of bankruptcy.
The mechanics last week rejected a proposed package of steep cuts in wages and benefits that United says are necessary if it is to land a $1.8 billion federal loan guarantee that would keep it out of Chapter 11 bankruptcy court proceedings.
United spokesman Jeff Green confirmed the meeting yesterday but said that the airline would not discuss any aspects of the talks, including their location or duration. .
Machinists union representatives did not respond to repeated calls seeking comment.
The meeting came a day after the airline's 24,000 flight attendants agreed to $412 million in wage concessions. However, that deal and other cost-cutting agreements accepted by United's pilots and other employee groups will expire Dec. 31 unless the mechanics sign on.
United is seeking $5.2 billion in companywide labor cuts over 5 years. The mechanics' proposed share is believed to be $600 million to $700 million.
The cash-strapped airline also must decide whether it can make a $375 million debt payment today, although it could push that deadline to Dec. 16 under a grace period. Its cash reserves are believed to be about $1 billion and on a pace to run out this winter.
A ruling is expected any day on its application for the federal loan guarantee, which United says it must have to obtain $2 billion in private loans. Without the guarantee, the airline has said it would have no choice but to file for bankruptcy.
United has been struggling since the September 11 attacks to reverse multimillion-dollar losses each day. It has reduced service and laid off 20,000 workers because of the weak economy and reduced spending by business travelers. On Friday, speculation that United was headed into bankruptcy sent shares of parent UAL Corp. tumbling 31 percent.
A bankruptcy is likely to have no immediate effect on passengers, because United has said it would continue flying its normal schedule. But the prospect of such a filing has raised concerns among some of the other unions that represent United workers. They fear that a bankruptcy court would order even more severe concessions.
The president of the local representing ramp workers and public contact workers criticized the mechanics for not being more flexible, saying the alternative to working with United on cost cutting is "so undeniably worse I question the motives and judgment behind such a decision."
"Simply put, every benefit we currently enjoy can be lost at the stroke of a judge's pen," Randy Canale wrote in a letter to District 141 members Friday.


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