CHICAGO – The union representing mechanics at bankrupt United Airlines (search) Monday said it was making plans for a labor strike, saying the No. 2 carrier was putting their retirement plans in jeopardy.
The threat from the Aircraft Mechanics Fraternal Association (search) comes in response to news that United, a unit of UAL Corp., and federal pension insurers last month reached a settlement, clearing the way for the carrier to to shed its four employee retirements plans.
A bankruptcy judge was expected to rule on the settlement on May 10.
"We have no choice now but to plan for a strike at some point soon," said AMFA National Director O.V Delle-Femine in a press release. "United is not only destroying our livelihoods, but our retirement security."
In January, AMFA members working for United voted to authorize a strike if additional pay cuts and other concessions were imposed outside of the normal negotiating process.
AMFA's strike threat comes on the heels of one reiterated Friday by the Association of Flight Attendants (search), who said its members would strike if United turns their pensions over to the Pension Benefit Guarantee Corporation (search).
The pension agency has said the difference between promised benefits and assets in the four United plans is $9.8 billion. The government will guarantee retirement benefits totaling $6.6 billion.
United, battered along with the rest of the industry by soaring fuel costs and weak revenues, has said it needs to achieve additional annual labor savings in order to emerge from Chapter 11 protection.
Voiding and replacing its pension plans would give United an average savings of $645 million a year over five years.
The carrier has said that strike threats are counterproductive and the unions would be better off spending their time pursuing consensual agreements on concessions.