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            Tuesday, Feb. 19, 2002      

            United OKs Mechanics Contract 
            By DAVE CARPENTER AP Business Writer

            CHICAGO (AP) - In a deal that averted a potentially crippling 
            strike, United Airlines and the union representing its mechanics and 
            aircraft cleaners reached a tentative contract agreement providing 
            industry-leading pay.

            Approval by the 12,800 mechanics in a March 5 ratification vote, 
            while not assured, would end a bitter two-year contract dispute and 
            give them their first raise since 1994. If they were to reject it, 
            United would again face the threat of a walkout.

            Airline consultant Michael Boyd predicted that the mechanics "will 
            go along with this" even though last Tuesday they turned down the 
            same pay increase by a 2-to-1 margin. The key is United's removal of 
            two key issues - delay of retroactive pay for more than a year and 
            insistence that mechanics agree to unspecified pay cuts as part of 
            its recovery plan.
            In trading Tuesday morning on the New York Stock Exchange, shares of 
            United parent UAL Corp. rose 15.9 percent, or $1.80 a share, to 
            $13.16.

            The announcement came on the fourth day of urgent talks at a 
            suburban Chicago hotel following the International Association of 
            Machinists and Aerospace Workers' rejection of United's last 
            contract offer, which was crafted by a presidential emergency board.
            Although United, the world's second-biggest carrier, is still loaded 
            down with the baggage of higher costs and lower revenues, the 
            settlement was a breakthrough in efforts to end its protracted labor 
            turmoil.

            United chief executive Jack Creighton called the accord "a critical 
            milestone in developing a recovery plan that meets the needs of 
            passengers, preserves jobs and puts the company on the road to 
            financial stability." The Elk Grove Village, Ill.-based airline lost 
            $2.1 billion last year.

            Despite Creighton's repeated assurances that he was confident an 
            agreement would be reached, United had acknowledged a decline in 
            bookings for the coming days, reflecting public fears of a shutdown.
            The mechanics had been preparing to strike starting at 12:01 a.m. 
            EST Wednesday.
            The tentative pact would grant mechanics 37 percent pay raises and 
            make more of them eligible for top-scale pay, which is being bumped 
            up from the current $25.60 an hour to $35.14, or about $73,000 a 
            year.

            It also would improve retirement benefits, the union said, and move 
            up the payment of retroactive pay for work dating to July 2001 by 
            31/2 months. Back wages totaling several hundred million dollars 
            would be paid in quarterly installments beginning Dec. 15 and 
            lasting until Oct. 15, 2004, instead of from 2003 to 2005.
            "This agreement fulfills the (union's) promise to negotiate an 
            industry-leading contract," said chief union negotiator Scotty Ford. 

            He said union negotiators - who did not make a recommendation before 
            last Tuesday's "no" vote, unanimously recommend approval.
            Still to be resolved is another contract dispute between United and 
            its 23,000 baggage handlers, customer service representatives and 
            reservation agents. That stalemate is expected to be easier to 
            resolve once the mechanics' contract is settled.
            ---
            On the Net:
            United Airlines: http://www.united.com
            United mechanics: http://www.iam141m.org
            2002-02-19     15:16:28 GMT 

            Copyright 2002 
            The Associated Press All Rights Reserved.
            The information contained in the AP News report may not be 
            published, broadcast, rewritten or redistributed without the prior 
            written authority of The Associated Press.

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