United Airlines employees could soon see the end of comfortable pension benefits.
But some union leaders will fight the move.
United, which has 6,000 employees in Denver, struck a deal last week with the U.S. Pension Benefit Guaranty Corp. to terminate all four of its employee pension plans.
The company said the agreement – which could give the agency partial ownership in the airline – brings it closer to getting out of bankruptcy.
From the perspective of the Association of Flight Attendants, “this is far from over,” said spokeswoman Sara Nelson Dela Cruz. “We are exhausting every legal option with fighting this, and if necessary, we’ll strike. … United is making an end run around our right to due process.”
Some flight attendants won’t be able to retire early from their physically taxing jobs if they lose their pensions, said Jody Weant, local head of the flight attendants union. And other flight attendants could quit if the deal goes through, she said.
Joseph Prisco, president of the Aircraft Mechanics Fraternal Association Local 9, said the mechanics union hasn’t agreed to relinquish its pension plan yet.
“There’s still an item in our contract that says they have to give us our pension,” Prisco said. He said the union can continue negotiations for a deal that members could ratify. But if they can’t, “then the membership is going to want to strike.”
United believes a strike would be illegal.
To that, Prisco said, “Sometimes you don’t have to ask permission to be mad.”
The International Association of Machinists, which called the deal between United and the pension agency a “sellout,” also said it is prepared to strike if pension issues are not resolved to its members’ satisfaction.
The Air Line Pilots Association said it is not commenting on the deal.
They and the other labor groups await details of the pension termination agreement in a court filing expected this week.
“Right now, everybody’s in scramble mode to figure out what’s going on,” Prisco said.
Retired United pilot Tom Hudgens, who lives in Cherry Hills Village, said that without pensions, pilots will have to make an adjustment in their lifestyles.
“United was good to me. I enjoyed working for them. They were a great company back then,” said Hudgens, who retired in 1981. “I’m very disappointed. I thought they would be out of bankruptcy by now.”
The agreement involves United’s pledging as much as $1.5 billion in notes to the pension insurance agency in exchange for taking on the pension liability.
One set of notes would be convertible to equity – perhaps giving the agency partial ownership in the airline.
The pension agency would provide basic pension benefits to the United workers in place of their company pension. This would mean a reduction in benefits for thousands of workers.
Staff writer Kelly Yamanouchi can be reached at 303-820-1488 or kyamanouchi@denverpost.com.
