Unions Talk of Striking if United Cuts Pensions

Facing huge cuts in their pensions plus a proposal to cut pay and benefits promised by their labor contracts, angry officials at three United Airlines labor unions threatened Wednesday to strike later this month.

''Our members are ready to go if they mess with the pension or terminate our contract,'' said Carl Finamore, president of the Bay Area local of the International Association of Machinists and Aerospace Workers. ''We will shut their airline down. Our members are fed up.''

United spokeswoman Jean Medina said the company is hoping no strike occurs.

''I think our employees understand that any disruption to our operations really does nothing but punish our employees and our customers,'' she said. But if a strike is called, she added, the company is prepared to keep flying.

United, one of the nation's largest airlines and a major Bay Area employer, has argued that it needs to cut pension costs to survive. Hammered by high fuel costs, and competition from low-cost carriers such as Southwest Airlines, United has been hemorrhaging money. Its Illinois-based parent, UAL, has lost $5.8 billion since filing for Chapter 11 bankruptcy protection in December 2002.

On Tuesday, a federal bankruptcy judge in Chicago agreed to let United dump its retirement plans for more than 120,000 employees and former workers, including 10,700 active employees in the Bay Area. The pension plans would be taken over by the federal Pension Benefit Guaranty Corp., in what would be the biggest corporate pension default in history. Many employees would receive major cuts in pension payments as a result.

Seeking further cuts, United on Wednesday asked the same judge to terminate the labor contracts of two of its four major unions, the machinists and the mechanics, so the airline could seek lower pay and benefits. The judge is expected to rule on that matter later this month.

Officials with both unions said they probably would wait to see if the judge throws out their contract before striking. But Christopher Clarke, a spokesman for a third labor union, the Association of Flight Attendants, said his union might strike once the federal pension agency approves the retirement plan takeover, which would mean drastic cuts in pensions.

The 39-year-old Clarke, who has worked for eight years as a United flight attendant, had planned to retire at 60 with a pension of $2,600 a month. But if the pension agency assumes the airline's retirement plans, he said, it would pay him only $886 a month.

Clarke noted that the average flight attendant earns about $35,000 a year and the union years ago bargained away the right to seek higher wages in favor of winning relatively lucrative pensions. So seeing their hard-won pensions gutted doesn't sit well.

''Flight attendants are outraged,'' Clarke said. ''Our position is, once our pension is terminated, we have the right to strike.''

Passengers taking United Airlines flights into San Francisco on Wednesday said they have mixed feelings about the financial troubles facing major airlines such as United.

Thomas Peterson, a Las Vegas attorney who flew into SFO on an afternoon flight, said he understands the burden that United had to show to get the approval to cut pension payments. And he's somewhat sympathetic to the troubles the airline is facing in the post-Sept. 11 business climate.

But he also has a good friend who's a United pilot, an 18-year employee who is suddenly worrying about his family and his future.

''Ripping off the pension fund is a huge huge blow to the employees,'' he said, adding that a possible strike won't make anything better for either side. ''It's a real Catch-22. Where's the benefit for them in striking?''

United executives have said a strike would be illegal under the terms of its labor contracts. If a strike was called, the dispute could wind up in a lengthy court fight.

But even if the courts sided with United and forbid a strike, ''a lot of our guys are fed up to the point where they wouldn't care,'' said Joseph Prisco, who heads the Bay Area local of the Aircraft Mechanics Fraternal Association. ''They'd just walk out anyway. If they change our contract without our permission, our members are going to be screaming for the national director to call a strike, legal or not.''

Other major airlines are in trouble, too, having lost a total of more than $30 billion since 2000. If United is allowed to jettison its pension obligations, some competitors are expected to try to do the same, after they file for bankruptcy.

Among the most likely to pursue that option is Delta Airlines, which notified the federal government Tuesday that it may have to file for Chapter 11 bankruptcy. It's possible that Northwest Airlines also might seek to shed its pensions, said Jim Corridore, an airline equity analyst with Standard & Poor's.

Although American Airlines and Continental Airlines are in somewhat better shape, he added, ''all bets are off'' if aviation fuel costs remain high.

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