CHICAGO – The nearly 2-year-old contract standoff between United Airlines and its mechanics union moved closer to a possible strike Monday when the mechanics rejected the government's offer of binding arbitration.
Federal mediators, while announcing that a 30-day countdown to a strike will begin later this week, took steps to assure there will be no work stoppage over the heavily traveled Christmas and New Year holidays.
Declaring the talks at an impasse and removing the legal obstacles to a strike, the National Mediation Board said, should "assist the parties in resolving their dispute."
The mechanics pledged to strike as soon as legally allowed if an agreement isn't reached, which normally would be as soon as the monthlong cooling-off period ends. But the mediation board recommended the establishment of a presidential emergency board at the end of that period — a step "thus avoiding any possibility of a work stoppage during the holidays," it said.
United had accepted the offer of binding arbitration.
"We don't expect any disruption of service as a result of the action today by the mediation board," said spokesman Joe Hopkins of the Elk Grove Village, Ill.-based carrier.
The mechanics, who are seeking an industry-leading contract, and United had recommended jointly in September that mediators declare an impasse and start the 30-day countdown in order to force a settlement.
"We have spent nearly two years in negotiations," said Scotty Ford, president and lead negotiator of IAM District 141-M, representing 15,000 United mechanics and related employees. "United failed to bargain in good faith and create a level playing field for all employees. We reject the board's offer of arbitration, and we will strike the carrier if an agreement can't be reached."
Ford called presidential intervention "unnecessary and undemocratic," and said the process will work if given a fair chance.
United senior vice president Bill Hobgood said the airline was disappointed that the IAM had rejected independent arbitration, adding that "we stand ready to continue discussions with the union at any time."
Negotiations may continue during the cooling-off period, though none are scheduled. Separate mediated talks remain under way between United and its ramp workers and customer relations employees.
The announcement of a breakdown in talks came after shares in United Airlines' parent company UAL Corp. soared 17 percent Monday, partly in response to the carrier's announcement late last week that it had shored up its financial position by deferring aircraft deliveries and raising cash.
UAL shares rose $2.48 to close at $16.72 on the New York Stock Exchange as the slumping airline company's stock continued to pull out of a long tailspin, boosted strongly by the government's aviation security overhaul and falling oil prices.
The stock began the year at $38.94 but had plummeted all the way to a 14-year intraday low of $9.40 Nov. 12.
"I think there's been so much bad news out of United lately that a string of decent news, albeit not surprising news, is taken (by investors) as a big positive," said Philip Baggaley, airline analyst for Standard & Poor's Corp.
The Elk Grove Village, Ill.-based carrier said late Friday it has restructured its contracts with Boeing and Airbus to take just 24 new jets in the next two years instead of the originally agreed-to 67, freeing up about $2.5 billion over that period.
It also said it has raised $600 million from a credit facility and the sale of Cendant Corp. shares it received for its stake in electronic reservation firm Galileo International, which Cendant purchased.