Saturday, March 29, 2003

United assault on work rules could multiply

By Dave Carpenter
The Associated Press

CHICAGO - The ink was barely dry on United Airlines' bankruptcy filing when CEO Glenn Tilton spoke of eliminating the "costly, restrictive" work rules that labor unions had fought hard for. Three months later, Tilton is about to get his wish.

Using the leverage afforded by bankruptcy court, United is on the verge of securing new contracts that could sweep many of those old rules aside, setting the stage for change throughout an industry trying to reduce employee expenses.

United's pilots, who on average made $205,978 and worked nine days a month last year, are being asked to make the deepest sacrifices.

Analysts say the industry can't afford such high pay levels at a time when airlines are mired in their biggest financial crisis ever, made worse by the war in Iraq.

But United's Chapter 11 overhaul, on top of related actions taken in bankruptcy by smaller US Airways, is expected to hasten the process and provide the impetus for rivals American, Delta and Northwest to make similar changes long blocked by their unions. American says it could be forced to file for bankruptcy without $1.8 billion in labor concessions.

By lowering the number of workers required to perform certain tasks, limiting vacations and reducing high pay for pilots' and flight attendants' down time, United hopes to achieve labor savings just as significant as employees' double-digit wage cuts.

"It would set an incredible precedent for the industry," Joshua Marks, chief of staff at George Washington University's Aviation Institute, said of pending contract changes at the nation's second-largest airline.

United and spokesmen for all of its major unions declined comment about work rules this week, citing the need to keep the contract process confidential.

But in detailed court filings last week, the airline documented a long series of rules it intends to eliminate or rewrite using the bankruptcy process. If employees don't reach general agreement - as the pilots' union did tentatively Thursday - the company can have a bankruptcy judge impose terms May 1.

That ensures the end, one way or another, of many work rules that date to an era when the industry was federally regulated. Among other changes, it means a pilot won't be able to parlay a 10-day vacation into an entire month off by manipulating the arcane scheduling process.

"Anachronistic work rules that result in pay for time not worked and more employees on the payrolls than are necessary to perform the required work must give way to the realities of doing business in today's ultra-competitive environment," the airline said in a March 17 court motion to void its contracts.

United's more than 8,000 pilots will vote next month on whether to ratify an agreement slashing their pay by 30 percent and making further cuts through changed work rules.

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