NEW YORK — The New York Times reports that United Airlines said yesterday that it had accepted a labor settlement proposed by an emergency board appointed by President Bush, setting the stage for an agreement with its mechanics.
Members of the International Association of Machinists and Aerospace Workers will vote on the board’s proposal, which would raise the top hourly wage nearly 47 percent over four years.
Scotty Ford, president of the local representing the mechanics, said in an interview that the ratification process would take about two weeks.
“There are mixed reactions out there right now,” he said of the plan. “A lot of people are relieved, but there is some disappointment.”
John W. Creighton Jr., United’s new chief executive, is seeking wage concessions worth several billion dollars from all of the airline’s 80,000 employees in a turnaround effort. But he has made little progress because the mechanics contract is still open.
United had promised the mechanics an “industry leading” contract like the one it gave its pilots in 2000. Both groups, along with salaried employees, bought 55 percent of the airline in 1994 in exchange for wage concessions.
But after Sept. 11, when two United jets were hijacked and crashed by terrorists, the airline industry went into a steep decline and United management said that it could no longer afford a raise.
The White House intervened last month, delaying a strike for 30 days while a three-member board studied the dispute and made a settlement proposal.
The recommendation, which was presented to the White House over the weekend, called for a 13.5 percent pay increase retroactive to July 2000, plus a 21 percent increase the day the contract is signed. By the end of the four-year contract, the top hourly rate would be $37.54, up from $25.60 an hour today. But the retroactive pay would be paid in eight quarterly installments, beginning in April 2003, giving the money-losing United time to turn itself around.
The union immediately embraced the proposal but the company said it had reservations. Yesterday, the airline announced that the labor committee of the board of the UAL Corporation (news/quote), United’s parent, voted to accept the emergency board’s proposal based on the recommendation of United management.
The airline said in a statement that it still had reservations about the settlement proposal, but it declined to identify them and a United spokesman declined to comment.
Looking ahead to the negotiations over concessions, the statement said: “The company is committed to completing a financial recovery plan that meets the needs of its customers, preserves jobs and positions the company on the road to financial stability.”