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United Workers' Lives Caught In Holding Pattern

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Source: Media Article

Date: Dec 09, 2004

From: Chicago Sun-Times

CartoonTwo years ago today, UAL Corp.'s United Airlines filed for Chapter 11 bankruptcy, raising questions about its future and the fate of workers.

In its bid to restructure and return to profitability, the airline won pay cuts of 9 to 30 percent from union workers along with work-rule changes and benefit reductions, failed to land a government loan guarantee, confronted surging fuel prices and now is seeking more labor concessions and to terminate pension plans.

United Airlines, which had hoped to emerge from bankruptcy in 18 months, plans to soon ask for another extension on filing its reorganization plan. It now is focused on emerging next year.

The Sun-Times spoke to workers about how the continuing ordeal has changed their lives.

Here is the snapshot they provided along with their views on actions United has taken to restructure and on what's key to its success going forward.

From two full salaries to one at reduced rate

Besides a home, Robert and Rebecca Kron share careers. Both work as flight attendants at United Airlines.

"We're worried because we have our eggs in the same basket," said Rebecca, 38.

The mother of three young children opted to take a voluntary furlough early last year when appeals went out from the union and company following the airline's bankruptcy filing.

Since the filing, the average annual salary of a typical 12-year flight attendant at United has gone from roughly $35,000 to $30,000, according to the Association of Flight Attendants.

Despite the hit to the couple's income, Rebecca isn't second-guessing her furlough decision. She notes her husband's work schedule has been turned upside down since the bankruptcy filing, making it difficult for him to balance work and family. She figures she'd have faced the same dilemma plus the issue of child care had she continued working.

"We're flying more hours, gone more days and with less pay," said Robert, 40, who began working at United in 1991. "People will pick up extra trips to try and make up for the reduction in pay.

"It's put more work load on my wife being home [like] a single parent when I'm gone."

Robert flies United's Chicago-to-Frankfort route, but when a tired Robert hits the door, there's no time to deal with jet lag. It's time to step back into the role of dad and handle family tasks and issues at home before heading out on another trip, he said.

"It used to be more balanced," Rebecca said. "There was more time at home, more flexibility. Now it's constantly this hamster-in-a-wheel kind of deficit."

The wage cuts and concessions Robert took, coupled with the loss of Rebecca's paycheck, has meant the Krons postponed completing an addition on their home. Robert, who was doing the work himself, was in the midst of that task when the bankruptcy occurred. Now an upstairs bathroom remains unfinished, stairs are uncarpeted and the kitchen lacks countertops.

"We can't do it," he said. "We're struggling paycheck to paycheck, paying minimums on credit cards to keep our heads afloat."

"We're just making it work any way we can," Rebecca said. "I am the coupon bargain queen."

With Christmas coming, the couple say they have no plans to buy gifts for themselves. "It's all we can do to give a little bit to the children," said Robert.

"We're trying to be hopeful," added Rebecca. "We love our jobs. We love this company. ... But having to deal with this kind of stress, it's very depressing."

Mechanic, wife 'living paycheck to paycheck'

Eighteen years ago, mechanic Jim Rosin landed his dream job working at United Airlines.

He came to a company where his wife, a cabin-services employee, has worked for 25 years.

"I had gone to a couple of different airlines before I made it to United," said Jim, 43, "and when I got here, I thought this is it. I made it to the big time finally."

Things haven't gone as expected for the Rosins, parents of a 9-year-old girl and 7-year-old son. The couple is reeling from pay and benefit cuts and the loss of roughly $200,000 in United's employee stock ownership plan.

Mechanics' annual pay fell from about $64,000 before the bankruptcy filing to roughly $53,000, and aircraft maintenance technicians' pay dropped from roughly $76,000 to just over $64,000, according to data from the Aircraft Mechanics Fraternal Association. Workers' pay in cabin services jobs fell from roughly $43,000 to nearly $36,000.

The drop in income for the Rosins forced the couple to consolidate bills by refinancing their house.

The refinancing left the mortgage at "where we were when we bought it in 1992," said Melody, 45.

"We live paycheck to paycheck," Jim said. "A savings account, things like that, there's basically none of that. There's a constant worry that's on you all the time."

"And a lot of crying," added Melody.

She works in the provisioning center, responsible for helping load and deliver supplies that go onto the airplanes. People are worried about their jobs being outsourced to another company, she said.

She's told the kids mom might not have a job next year, but for them not to worry.

"We've tried to shelter them from it, but it's going to start affecting them this next year now," said Melody. "Right now we have them in Tae Kwon Do and figure skating. If this continues, that will have to go.

"Everybody says, 'Well, move or give this up or give that up.' But it doesn't happen that easy. It's the same with the pilots. People say 'They make too much money. They can give it up anyway.' Well that's not true. Everybody has got their lifestyle centered around the amount of money they are making. To just chop it in half all of a sudden, it's going to affect anybody."

The Rosins worry about further pay cuts.

"We can't take any more," said Melody. "It's been since 1992 that we've had a raise, and they want it to go to 2010. If they get their way this time, it will be 18 years without an increase. Doesn't that sound a little bit ridiculous?"

Jim sees United's salvation in its employees.

"I believe that United has to remember that employees made it who it is, and they have to remember the people who came before us," he said. "They've got to remember the people that are keeping them afloat now."

Pilot thought concessions would save company

Two years after United Airlines' bankruptcy filing, pilot Steve Derebey said he's seen his pay slashed by more than $100,000 a year, lost roughly $400,000 in United's employee stock ownership plan -- which held the bulk of his retirement savings -- and said goodbye to his home in Deerfield.

Before UAL filed for Chapter 11, the 53-year-old said he made roughly $240,000 a year as a captain flying Boeing 767 aircraft for the airline.

But Derebey, a 15-year United veteran, joined other pilots in voting to approve 30 percent pay cuts to help the airline emerge from bankruptcy.

"My feeling was that it was better to keep the company alive and hopefully come back and be able to recoup the income on a day when the company was doing better," he said. "So I saw it as a way to preserve the company."

As jobs and flights were cut in the subsequent restructuring, Derebey said he was basically forced to go to a smaller aircraft at United, the 737. That cut his pay by another 30 percent.

Playing the hand he was dealt, he opted to relocate his home to Seattle.

"I chose to go to a lower plane, but in a more desirable location," he said. "We love the Northwest."

Derebey said he expected to be able to retire with an income of about $5,500 a month. If United succeeds in dropping the current pension plan, he estimates his benefits will be cut to less than $2,000 a month.

He said United's union-negotiated pension plan takes into account that pilots are forced to retire from their chosen profession by law at age 60 -- only seven years away for him.

"For many people, between 60 and 65, those are pretty prime earnings years to save for retirement," he said. "But we can't work in our chosen profession, so we depend on the pension benefits that we have negotiated to carry us through years that most people don't have to deal with. Sure, we're well-compensated for what we do. But again we have five (fewer years to work)."

Derebey has rethought his retirement plans.

"I'm having to take a look at doing some things differently," he said. "I won't have a retirement. It will be a working retirement. ... I'll probably operate some kind of business. I'm not just at age 60 going to fold up [my tent]."

The past couple of years have been an emotional roller-coaster ride, Derebey said. "Pilots are very compartmentalized," he said. "When we fly, we tend to shut out everything outside of flying. But it's when you're not flying and trying to do planning for the future, it weighs a little bit heavy on you."

He said he and other pilots felt more optimistic after giving the company $1.1 billion in annual concessions last year.

"We felt like we gave them the tools they needed," he said. "They said they needed $1 billion in cost cuts, and then they could turn this around and get the financing they need and run a good solid company. We haven't seen that translated into action."

Derebey said talk of more concessions doesn't sit well with him, and he's watched morale deteriorate.

"You look at flight attendants, customer service, ramp workers, mechanics; everybody has been working hard to make this thing work. It's the management's turn to manage. They're going to have to manage their way out of this."

Mechanic's career has him flying from airline to airline

Rick Neidhardt has worked for eight airlines in 12 years. He recently joined Air Wisconsin, after being laid off in October at United Airlines, where he'd worked as a mechanic for eight years.

Since United Airlines' bankruptcy filing, he said wage and benefit cuts have left him concerned about his family's bottom line.

Mechanics' annual pay at the airline has dropped from nearly $64,000 before the bankruptcy filing to roughly $53,000 since. Aircraft maintenance technicians' pay dropped from roughly $76,000 to just over $64,000, according to data from the Aircraft Mechanics Fraternal Association.

"It seems like we've been taking one step forward and two steps back, unfortunately," said 43-year-old Neidhardt. "It's one of those situations where you're not sure where your career is going to go. You're not sure where your life is going to go, either."

Neidhardt, who worked two jobs last year because he was worried about the risk of layoffs at United, said so far the family hasn't had to cut back on anything essential.

"But I think that's coming here in the near future," he said.

That's because the father of a 16-year-old and 14-year-old said his latest mechanic job at Air Wisconsin is for 60 percent of the pay he earned at United.

Neidhardt, whose wife works part time as a bank teller, chose the field in part because he thought it offered job security.

"I was looking forward to having a 40-year career with an airline, with one airline, which unfortunately doesn't happen anymore," he said.

He noted in 2001, prior to Sept. 11, he attended a career day at his oldest daughter's school. He discussed his field and recommended that students consider it.

"Two years later I was asked to come back and do another one for my younger daughter, and I refused to do it because I could not honestly go in there and tell somebody that this was a career that somebody should follow."

Still, Neidhardt, who likes his work, said his preference is to stay in the industry if he can. "It all depends on if I can make enough money and have the benefits to survive. Being the eternal optimist I always figure where there's a will, there's a way."

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