Origionally published: April 12, 2005
Lastest Revision: April 14, 2005
Changes Made: Added United's response to end of article and new screw-o-meter graphic.

Will this ever end? United filed a Section 1113 motion to not only terminate the Flight Attendant Pension Plan, but also to reject the Flight Attendant Contract entirely.

Here's their opinion of what should be changed for us: Download Term Sheet (.pdf 393 kb)

Here's a letter to all UAL Flight Attendants from the AFA MEC President:

April 12, 2005

Ladies and Gentlemen,

United Airlines has retaliated against our efforts to hold them accountable for Salaried and Management (SAM) cost savings they claim are need to exit bankruptcy. Yesterday, management filed a Section 1113 motion to not only terminate the Flight Attendant Pension Plan, as expected, but also to reject the Flight Attendant Contract entirely.

As you know, current United executives have failed, despite numerous meetings and written requests, to provide reasonable documentation to show they are meeting their own plan for cost savings of $112 million dollars annually from the SAM group. After having been caught red-handed giving raises to its SAM employees while claiming to cut their pay, the audit then revealed that management 's wage cuts and a significant portion of their productivity improvements appeared illusory, at best. AFA provided this management with several weeks to fix the problem. In fact, it is only because of AFA’s persistence that any changes were made to their cost savings numbers at all. Finally, management admitted they have not identified the total cost savings allocated to SAM.

As such, on Friday, April 8, we formally notified CEO Glenn Tilton that, in accordance with the termination rights contained in our Contract, management would have 20 days to cure the violation to our reasonable satisfaction, or we would consider the Agreement ratified in January to be null and void, effectively reverting the terms of the Contract to the 2003-2009 Flight Attendant Agreement. This would provide management with an easy fix. Simply, their cuts need to be real and verifiable just like they have demanded from us.

Current United management is attempting to distract attention from its egregious conduct by attacking our Flight Attendant Contract. Yesterday's actions are outrageous and an unwarranted retribution for our due diligence in verifying that the cuts imposed on other employees are as real as those for the Flight Attendants. We are doing nothing more or less than holding management accountable for its own plan to produce the cost savings it claims are necessary for securing exit financing to emerge from bankruptcy. Management has over-stepped all bounds of decency and the standards of labor relations by seeking to reject our entire agreement.

Rather than simply fixing their phony numbers regarding the cost savings they allocated to SAM, and agreeing to abide by the same standards that they demand from Flight Attendants, these executives chose to place our agreement for $131 million in annual cost savings in jeopardy. They have filed a new term sheet with the court that details concessions including, but not limited to modifying our medical benefits, reducing sick leave pay, forcing Flight Attendants to work more hours, defining a greater portion of international flying as domestic, eliminating or altering international rest provisions, eliminating Personal Time Off, and modifying the voluntary furlough. A full copy of United’s Section 1113 term sheet (.pdf - 493 KB) is posted on our website.

A motion to terminate our pension plan by itself would have been a deplorable act. This management has gone further and appears to be wholly focused on creating a labor war rather than working for the success of United Airlines.

Instead of respecting our contributions, Glenn Tilton has insulated his own pension from the effects of bankruptcy, and, together with other executives, he continues to receive millions of dollars in bonuses from United Airlines while it's in Chapter 11. We must question whether these executives can follow through on their own commitments to the airline.

Unfortunately, our own audit of their plan to implement cost savings suggests that they cannot. And that once again calls into question whether these executives are capable of completing our airline’s restructuring. Current United management seems to operate under the gross misconception that front-line employees are dispensable, inconsequential and eager for abuse from executives who profit at our expense. How wrong they are. Flight Attendants have worked too hard and sacrificed too much. We will use every means available to save our airline and fight for our careers.

Your attention and solidarity are paramount at this time. We will keep you closely informed as we fight the latest attack on all of us as AFA Members. Remember that we have stepped up to the plate throughout this bankruptcy in turning out record service performance and contributing incredible sacrifices to the success of our airline. We can hold our heads high as we demand that the same dedication, professionalism and sacrifices be contributed from every employee of this airline -- from the galley to the board room. We will fight with everything we have to put a stop to this assault on our airline and our profession.

In Solidarity,

Greg Davidowitch, President
United Master Executive Council

And here's United's response (READ: damage control) posting on SkyNet:

United's Response

Update on AFA Request to Terminate Current Contract Terms

As you may have seen in a NewsReal article on Tuesday, the Association of Flight Attendants (AFA) informed United last Friday that it intends to terminate the terms of its recently ratified agreement with United, a move that the company believes is totally unfounded. United responded to the AFA's notification in a letter to the union on Sunday. That response was also reflected in the previously scheduled, procedural court filing that United made late on Monday, addressing long-term contract and pension issues for the AFA as well as for the IAM and AMFA. Here is an overview of the situation:

*New AFA contract terms reached and ratified in January

The AFA reached and its members ratified an agreement that addressed all collective bargaining issues except pensions back in January. Discussions on outstanding pension issues have continued between the company and the AFA since that time.

As you may remember, ratified long-term agreements that provide the necessary cost savings, including modifications to CBAs to permit the termination and replacement of defined benefit pension plans in compliance with ERISA, are already in place with ALPA, PAFCA and TWU. Discussions with the IAM and AMFA on both pension and non-pension issues continue.

*United cost savings remain on track

The new AFA agreement ý- like those reached successfully with some of United's other labor groups ý- contains a provision that says that the union can terminate current terms if other employee groups aren't collectively meeting the required savings target. The AFA alleges that United hasn't satisfactorily demonstrated to the AFA that Salaried and Management (SAM) employees will meet their portion of the collective savings requirement.

As a point of fact, the company is on track to secure the full amount of collective labor savings from SAM and its other labor groups. The company is also ahead of plan in achieving SAM productivity improvements for 2005.

The cost savings commitment for SAM employees, like those for all other labor groups, is being met fully and will be met fully. Therefore, the company believes that the AFA termination of the compromise agreement is without merit.

*United's actions avoid unnecessary and complex procedural issues while still allowing all required savings

The AFA's notice of intent to terminate left United with two primary options: to contest the AFA's right to end the terms of the January agreement ý through time-consuming, drawn-out and complex procedural steps -ý or to agree to the AFA's termination request and seek the authority to reject the AFA's pre-existing CBA as unmodified by the January agreement. In order to avoid a procedural quagmire and assure that the required savings are in place by May 2005, the latter is precisely what the company chose to do. And so in its 1113(c) and pension termination court filing on Monday, United moved for the right to reject the AFA's CBA.

The AFA has known since January that the company was going to file an 1113(c) motion as to pensions on April 11. Under bankruptcy law, an 1113(c) motion must seek to set aside the entire contract, not just a section of it.

If necessary to ensure that the required AFA savings remain in place through a potential trial on this matter, United will file a request for interim relief against the AFA in the near future, through what is known as an 1113(e) motion.

We will continue to work toward consensual agreements ahead of trial with the AFA as well as the IAM and AMFA. However, since we need to achieve these savings in order to exit bankruptcy, we will seek to obtain the changes through a court hearing, which is scheduled to start on May 11, if necessary.

Keep an eye on NewsReal for future updates as this issue develops.

When I look to the right and see nothing but headlines like "Reject Flight Attendant Contract?" or "United Airlines Faces Possible Strikes (Apr 11)" or "Tilton: United to Eliminate Pension Plans", it is getting to be enough already. Plan B Revisited >>