United may cut up to 6,000 jobs
By Marilyn Adams
USA Today
United Airlines, once 100,000 workers strong, is considering cutting 6,000 more jobs in its struggle to exit bankruptcy protection in the face of stagnant fares and soaring fuel prices.
The proposed cuts, almost 10 percent of the current workforce, would reduce employment at the world's No. 2 airline to about 56,000. An outside source briefed on management's proposed job cuts confirmed the numbers.
The company, which has cut nearly $5 billion in annual labor and debt costs in bankruptcy reorganization, is considering $625 million more in annual cost cuts, company officials said Tuesday.
In a taped message to employees, CEO Glenn Tilton and Chief Operating Officer Pete McDonald said the company is seeking to cut $200 million a year in aircraft maintenance and $150 million a year in airport operations, among other areas.
United spokeswoman Jean Medina didn't confirm or deny the job-cut report. She said essential cost cuts "are going to require some job reductions over time."
Medina said an update on United's business plan will go to the board Sept. 29.
One new area that could be hit by job cuts is United's headquarters, which employs 3,800 in suburban Chicago. McDonald said on the tape that cost cutters are focused on "overhead" at headquarters and companywide.
Aircraft mechanics also could be affected. United already has furloughed thousands of mechanics and shut maintenance centers, sending more work to outside contractors to cut costs.
New furloughs aren't expected to affect pilots or flight attendants. United recently recalled 775 furloughed flight attendants for flights this fall. Because of earlier pilot furloughs and retirements, United's pilot ranks "have been short all summer," pilots union spokesman Steve Derebey said.
Senior United pilots have the right under their labor contact to take part of their pension in a lump sum at retirement. Because United is considering terminating its pension plans, unusually high numbers of senior pilots have been retiring before age 60 and taking lump sums, Derebey said.
United has stopped paying into its pension plans to save $500 million this year alone.
After 21 months in reorganization, these latest cost cuts are prompted by low fares, high oil prices and United's failure in June to win a federal guarantee for financing to exit bankruptcy protection.
To exit now, United must attract private financing with a business plan and cost structure taking into account current fares and fuel prices.
