United Airlines ramp workers, customer service and reservations agents, and other machinists union members will vote on pay cuts of 3 percent to 5.5 percent and other concessions as their company struggles to emerge from bankruptcy.
Terms of the 4 1/2-year tentative agreement reached between United and the International Association of Machinists and Aerospace Workers were revealed Tuesday.
The machinists union is the last United union to reach a new concessionary labor agreement as the company has worked for months toward cutting its labor costs by $700 million annually.
Voting, to begin shortly, will end by July 22. The union strongly recommended that its members vote in favor of the pact.
It also asked members to vote to authorize a strike in case the contract is rejected.
The agreement calls for 3 percent pay cuts for maintenance instructors, fleet technical instructors and related workers represented by the union, and 5.5 percent pay cuts for others.
The labor agreement includes terms to allow United to end its pension plans for the union’s members. Instead, machinists union members could join the union’s multi-employer national pension plan starting in March. United would contribute 4 percent of earnings to the union’s plan.
The company also would issue $60 million in convertible notes for machinists union members.
Other concessions in the agreement are terms for outsourcing fueling work and some cabin-service work at certain airports, as well as terms to close United’s Miami kitchen and outsource that work. The agreement also calls for a reduction in holidays.
The machinists union represents about 19,000 employees at United, including ramp workers and customer-service and reservations agents. About 3,500 of United’s retirees and employees represented by the machinists union are in Colorado.
Machinists union members are now under a temporary 11.5 percent pay cut that ends in July.
United has been in Chapter 11 bankruptcy for more than two years.
Staff writer Kelly Yamanouchi can be reached at 303-820-1488 or kyamanouchi@ denverpost.com.
