Posted on: Friday, May 27, 2005

United strike-threat ruling delayed

By Dave Carpenter
Associated Press

CHICAGO — A federal judge yesterday declined to rule on a threatened strike by United Airlines' baggage handlers and customer-service agents until after their contract standoff is resolved.

U.S. District Judge James Zagel put off until June 7 a decision on the machinists union's request for a temporary restraining order that would have barred United from trying to impede a strike.

Later in the day, the machinists union, which represents baggage handlers and customer-service agents, made another proposal to United that the carrier said it would review. It's the latest in a succession of proposals from both sides.

The International Association of Machinists and Aerospace Workers maintains it has the right to strike if United's bid to terminate its contract is approved by a bankruptcy judge on Tuesday.

The two sides are in talks to try to reach a contract agreement that would make that ruling unnecessary.

"Today's decision does not affect our plans to strike United Airlines if we cannot reach an agreement with the company and the bankruptcy judge rules in United's favor," IAM spokesman Joseph Tiberi said.

United contends a strike would be illegal under the Railway Labor Act even if the contract is terminated.

Negotiators continued contract discussions at an undisclosed location near O'Hare International Airport, five days ahead of the court ruling deadline.

After submitting the new proposal, the IAM said its negotiators were going home for the weekend and would resume talks if the company responds.

Both sides said the biggest remaining obstacle to a settlement is over a pension plan to replace the defined-benefits fund the company is terminating. The company wants the money put into an investment-based 401(k) savings plan, while the union proposes it go in the IAM's own pension plan.

Separately, U.S. Bankruptcy Court Judge Eugene Wedoff denied a motion by the flight attendants union to stay his May 10 order approving United's plan to unload its four defined-benefit plans on the Pension Benefit Guaranty Corp., the government's pension insurer.

Flight attendants' spokeswoman Sara Nelson Dela Cruz said the union didn't expect a stay but the motion was "a procedural move that we had to make."

United, a unit of Elk Grove Village, Ill.-based UAL Corp., says it will save an estimated $645 million a year from the pension move and another $700 million annually if it can secure $175 million in yearly concessions from the IAM and $96 million from its 7,000 mechanics. Results of the mechanics' contract ratification vote are due out Tuesday. United's other unions have long-term contracts in place.