CHICAGO – Union machinists at bankrupt United Airlines will challenge in court the air carrier's attempt to impose a 13 percent temporary pay cut that United says it needs to satisfy lenders, a lawyer for the group said Monday.
United parent UAL Corp. (UAL) filed the largest airline bankruptcy ever Dec. 9. The company is seeking $2.4 billion a year in wage cuts to meet the demands of lenders who have pledged cash for the restructuring.
Unions representing pilots, flight attendants, flight dispatchers and meteorologists have tentatively agreed to stiff pay cuts. However, the International Association of Machinists, which represents mechanics and other workers, has rejected the cuts, prompting United to seek court permission to impose the reductions.
The IAM plans to file a motion Tuesday objecting to United's request for the authority to impose the pay cuts under Section 1113 of Chapter 11 of the U.S. bankruptcy code, IAM attorney Sharon Levine said. The motion will be filed in the U.S. Bankruptcy Court for the Northern District of Illinois.
Machinists have not had enough time to sift through United's financial data, and the information provided has not answered questions completely, Levine said.
IAM's mechanics were the only union members who did not ratify their part of a $5.2 billion wage cut plan that United had sought for a failed bid to obtain federal loan guarantees and avoid bankruptcy.
United has asked the other unions to ratify their tentative agreements by Jan. 8. Pilots have tentatively agreed to 29 percent pay cuts, flight attendants to 9 percent, flight dispatchers to 13 percent and meteorologists to 13 percent.
Bankruptcy Court Chief Judge Eugene Wedoff, presiding over the restructuring, gave United lawyers until Jan. 8 to respond to the machinists and said he expects to decide by about Jan. 10 whether United can impose the cuts.