Saturday, April 16, 2016

United Continental Workers in Machinists Union Extend Contracts: Union said accords run through 2021 and provide “industry-best wages, work protections and retirement security”

The Wall Street Journal
By Susan Carey
April 16, 2016 10:36 a.m. ET

Some 30,000 airline customer-service agents and ramp workers at United Continental Holdings Inc. “overwhelmingly” approved extensions to their existing labor contracts, the carrier and the International Association of Machinists union said early Saturday.

The workers, in balloting that concluded Friday, voted for seven labor contracts governing all the classifications of employees in the group. The union said the accords run through 2021 and provide “industry-best wages, work protections and retirement security,” among other improvements. United said the deals also will allow it to add new jobs at Los Angeles International Airport and San Francisco International Airport, two of its hubs.

United and the union agreed last November to open existing labor agreements early and enter into expedited negotiations for contract extensions. After four months of talks, the two sides earlier this month reached tentative agreements. The contract extensions will supersede current agreements that open for renewal nine months to 2½ years from now.

These contracts “recognize the important work” the Machinists union members do, Oscar Munoz, United’s chief executive officer, said in a statement Saturday. “We remain laser-focused on getting contracts like these for our flight attendants and technicians,” he said, referring to mechanics.

Since the airline was formed following the 2010 merger of United Airlines and Continental Airlines, both the combined pilot group and the Machinists have now reached their second new joint contracts. The pilots in January approved a two-year contract extension.

But the attendants and mechanics haven’t yet concluded new combined contracts with the airline. The mechanics widely rejected an earlier tentative agreement and the attendants have been in mediated bargaining for years, although people close to the matter say progress is finally being made. Mr. Munoz, who joined the airline last September, has made labor peace and improved morale one of his biggest goals for the nation’s No. 3 airline by traffic.

The Machinists union said Saturday that the two rounds of contract talks for its members have resulted in wage and pension increases of more than 40% and industry-leading job protection. As part of the agreement by the airline and the union to reopen the existing contracts last November, United stopped its practice of outsourcing airport-worker jobs at smaller airports, a cost-cutting exercise that resulted in the loss of more than 2,000 jobs.

Chicago-based United, which will report its first-quarter results on Wednesday, currently is embroiled in a proxy fight with two hedge funds that own 7.1% of its stock and are pushing a slate of six director nominees to be considered at the airline’s annual meeting later this spring. United has called the investors’ efforts “a hostile action” that will distract from Mr. Munoz’s turnaround plan for the carrier, which has lagged behind its larger rivals in financial performance since the merger. The investors contend that United’s board needs fresh blood and more industry expertise. The day before they pounced, United said it added three directors, two of whom have airline experience, to its board, enlarging the panel to 15.

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