MAKE NO MISTAKE...
a "NO" vote will prompt UAL to abrogate our contract and we
will end up with something that is worse than what we are voting
on. Regardless of whether we deserve these pay cuts or not, we will get
them. The bankruptcy judge will see to that. (Please keep my name
Vote to Accept LOA;
Vote Yes on "Self-Help"
By Terry OčRourke
Published: January 21, 2005
The AMFA/UAL members now face an important choice. We must decide whether to
accept or reject the company term sheet as specified in the January 9, 2005
Letter of Agreement (LOA). In addition we must decide whether or not to seek
"self-help" if the company abrogates our contract.
I attended the entire 1113(c) negotiations as an observer. Each day I wrote
a report and published it via the Internet and/or email so that the
membership could follow the negotiations and understand the ebb and flow of
the issues. I was honored to play that role for the membership and I hope my
notes proved useful.
Now we must each make a decision. I have carefully considered the issues
before us and have arrived at my decision. I will vote to accept the company
term sheet as spelled out in the LOA. I will also vote to authorize AMFA to
engage in "self-help" methods against United Airlines should the need arise.
Why? My vote is not about concessions. If this were a Section 6 negotiation
then I would never consider a vote for any concessions. This vote takes
place in the cold hard reality of the 1113 bankruptcy process. None of the
negotiators like this process and neither do I. The negotiators simply
worked to mitigate the November 4 company term sheet and bring a choice to
This vote is about the survival of United Airlines. UAL's survival offers
hope of a successful bankruptcy exit and a viable company.
While I considered the terms of the agreement including health insurance,
pay, and time off, my entire decision hinged on only one assessment. Is this
membership now ready to do whatever is necessary and risk putting United
Airlines out of business? Is this membership now willing to make a deadly
serious commitment to themselves and each other, walk out the door and never
look back? Will this membership now hang tough when faced with the pain of
economic hardship and uncertainty? Is this membership now prepared to do
whatever it takes to stay that course?
I have always sympathized with idealistic causes. I have a soft spot for
Pyrrhic enterprises. Fighting for a just cause while sustaining staggering
losses but eventually gaining ultimate victory appeals to the romantic side
of my nature. Nonetheless I have come to realize that real world victories
usually go to the pragmatic.
The questions posed above are not simply rhetorical. I had to answer them in
order to arrive at my ultimate decision. During the last seven weeks I sat
though all the negotiations, visited with dozens of fellow observers, and
corresponded with many more via email. I could only come to one conclusion
about the resolve of my fellow AMFA/UAL members. I am firmly convinced that
this membership does not at this time have the fire in the belly to take
this company down. In my judgment it's not even a close call.
Actions speak louder than words. Consider this:
? In one election, only 17% of one Local chose to exercise their right/duty
to vote. And this in the context of telephone/internet 24/7 voting. This
percentage, unfortunately, is typical.
? In six weeks of open negotiations, the observers' chairs (25 or so) only
filled up once or twice. Typically ten observers were present but there were
often fewer than that. The week of San Francisco negotiations produced fewer
observers on average than the other weeks in Chicago.
? The Local monthly membership meetings drew only a handful of members even
as our jobs and livelihoods came under serious fire. These observations
convinced me that this membership is not yet ready to make good on a "no"
vote. The inconvenience of casting a vote or attending a meeting pales in
comparison to the emotional, physical, and mental fortitude required to do
the heavy lifting of "self-help."
Once I concluded that the membership was not yet ready to accept the
consequences that a "no" vote entailed, I considered the key terms of the
proposed LOA. I understand that this proposal represents a concessionary
agreement. None of its terms can be considered a negotiation success by any
Recognizing that, let's examine some of the important terms of this
proposal: health coverage, wages, and time off.
Unions all over America have fought to protect their health coverage. More
than a few strikes occurred recently due to this item alone. We all see
continuous coverage in the media about out-of-control health care costs.
Over 45 million Americans currently have no health coverage. Good health
care comprises the very core of quality of life.
The current LOA proposes no change to our health care coverage. The November
4, 2004 company term sheet proposed taking the annual price increase cap off
of all out-of-pocket health costs. This item alone amounted to the biggest
single threat to our paychecks. This would continually erode our paychecks
at the rate of medical inflation. Under the proposed LOA our pay would
decrease by 5%. Compare this to all the other employee groups on the
IAM 11.5% cut
AFA 9.5% cut
ALPA 11.8% cut
SAM 10% cut (average)
No pay cut deserves celebration but I'm certain other employees wouldn't
mind swapping. The vacation time in this proposal remains untouched. The
company had proposed limiting vacation accrual to four weeks at 20 years. We
all value our time off and this proposal protects our vacation.
The holidays, however, were reduced from ten days to six days. While this
diminishes our time off by four days, maintaining the current vacation
accrual schedule substantially mitigates this damage. The job security and
scope clause will cause drastic changes for some of our members. The union
successfully defended the seniority protection date of 10-31-89 for most,
but not all, members. The Utility and Computer Technician groups, however,
will be phased-out under this proposal. The union negotiated enhanced
severance packages for both of these groups and a one-year bridge to
retirement for the Utility members. In addition the phase-out time for
Utility will last three years. The Computer Tech phase-out will take place
over two years. I take no pleasure in seeing any of this work leave United
particularly in light of the current round of furloughs. The company,
however, strongly resisted union attempts to protect this work. The double
severance package along with up to one year paid medical benefits should
help this group transition to another career. We must remember that these
terms are superior to any negotiated for the thousands of mechanics
furloughed in recent years. We need not be ashamed of the exit terms we
secured for these two groups.
As far as the offshore outsourcing of 747/777 HMVs, I have little to say.
The time to defend that work from leaving UAL occurred in 2003 during the
first 1113 filing. I for one am not ready to take a pay cut to save the job
of a non-UAL non-union worker in Alabama. Most of the arguments I hear on
this issue should have been raised in 2003, not now.
Some argue that we should vote this down and force the company to come back
with a better deal. This attempt at brinkmanship invites disaster. This is
not a time for games; this is not Section 6. If we vote this proposal down
then the company will likely proceed directly to court with an 1113(e)
motion or choose to go straight to an 1113(c) hearing to abrogate our
contract. An 1113(e) motion will probably leave us with an immediate
temporary (and retroactive to January 1) 11.5% pay cut along with the 70%
sick leave pay. An 1113(c) hearing risks landing us in the courtroom of an
angry and impatient judge only too willing to grant the company whatever
term sheet it wished.
One final point. We must remember that the judge has the final say. Even if
we choose to accept, the judge may reject our agreement. The judge only has
one responsibility: ensure the financial viability of United Airlines and
its successful exit from bankruptcy.
In conclusion, we must now vote to accept or reject this LOA. If one chooses
to reject then the argument must be made that this membership will follow
that path to its logical extreme. That is, if you vote to reject then you
must be committed to take self-help action that results in the demise of
United Airlines. You must accept the consequences of that decision. You must
be willing to accept terminating the health insurance of all employees and
retirees. If you are not ready to accept all the consequences of that choice
then your commitment will not endure.
Given the option of the palatable package negotiated by our own committee, I
will choose to accept the proposed LOA. I encourage my fellow AMFA/UAL
members to join me in casting a vote to accept.
Whether you choose to accept or reject, a yes vote for "self-help" must be
selected. To do otherwise threatens the very foundation of our Association.
Last, but not least, please vote. Now is not the time to give up.
Dispute these arguments, the membership voted the agreement down and voted
for "self help." The response of the AMFA leadership to UAL and the Court
was to agreed to the court imposed temporary abrogation of the AMFA
This is the situation that the membership face today. From the beginning,
since at least November of the bankruptcy process, UAL has been using the
courts to blackmail AMFA into "voluntarily" accepting an abrogation of the
contract. Knowing full well, if it doesn't get its way, the courts will
abrogate the contract in UAL favor. Negotiations between UAL and AMFA have
been undermined from the very beginning by this blackmail of court action --
not just from the present court-imposed negoiations. The AMFA membership
have stood up to this blackmail. The temporary cuts imposed by the courts
and agreed to by the AMFA leadership may become permanent tomorrow. The
membership deserves better.
(Bankruptcy Exit Agreement)
LETTER OF AGREEMENT
by and between
UNITED AIR LINES, INC. and
Mechanics and Related Employees
in the service of UNITED AIR LINES, INC.
as represented by
THE AIRCRAFT MECHANICS FRATERNAL ASSOCIATION
THIS LETTER OF AGREEMENT, dated as of January 9, 2005, is made and
entered into in accordance with the Railway Labor Act by and between UAL
Corp. (hereinafter referred to as "UAL"), UNITED AIR LINES, INC.
(hereinafter refelTed to as the "Company") and the AIRCRAFT MECHANICS
FRATERNAL ASSOCIATION (hereinafter referred to as "AMFA" or the "Union").
WHEREAS UAL, the Company and the Union have reached agreement concerning
the revisions to their current collective bargaining agreement (the "2003
Mechanics' Agreement" and, as revised by this Letter of Agreement, the "2005
Mechanics' Agreement") necessary for the Company to emerge from Chapter 11;
WHEREAS certain of the revisions shall become effective as of January 9,
2005 (the "Effective Date"), assuming the complete satisfaction of the
conditions described in paragraph 7 below prior to January 31, 2005 and
other revisions shall become effective on the effective date (the "Exit
Date") of a plan of reorganization proposed by UAL Corp. (the "Plan of
THEREFORE the parties to this Letter of Agreement hereby agree as
I. Contract Extension. The amendable date of the 2005 Mechanics'
Agreement shall be January 9, 2010. Section XVII of the 2005 Mechanics'
Agreement shall read in its entirety as follows:
This Agreement shall become effective January 9, 2005 and shall continue
in full force and effect through January 8, 20I0 and shall thereafter
renew itself yearly without change each January 9th unless written
notice of intended change is served in accordance with Title L Section
(l) of the Railway Labor Act by either party at least thirty (30) but
not more than two hundred and seventy (270) days prior to January 8,
2010 or January 8 of any year thereafter. If such notice is served,
negotiations will commence no more than 30 days after service. If a new
tentative agreement is not reached by August 9, 2009 (or any August 9
thereafter, if applicable), the parties will jointly invoke the
mediation services of the National Mediation Board under Section 5 of