United Labor Deal Averts Strike

United Airlines has reached agreement with its mechanics' union, averting a threatened strike. Mechanics ratified a new contract Tuesday, and the machinists' union has agreed in principle to a new deal.

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On Wednesdays, the business report focuses on the workplace, and we'll begin with a report on two unions that plan to continue working. Two of United Airlines' unions have agreed to concessions that averted strikes. NPR's Cheryl Corley reports from Chicago.

CHERYL CORLEY reporting:

United and the International Association of Machinists say they still have work to do but they've reached an agreement in principle. The other union, the Airline Mechanics Fraternal Association, voted to accept a five-year contract that includes a nearly 4 percent pay cut for mechanics. United's chief financial officer, Jake Brace, says those steps will help the airline attract the financing it needs to exit bankruptcy.

Mr. JAKE BRACE (Chief Financial Officer, United Airlines): It's a hugely important step getting these agreements in place. We're also pleased to resolve any lingering doubts in anyone's mind that there was a possibility of a strike. There's absolutely no possibility of that right now.

CORLEY: But it took intense last-minute bargaining to end the strike threat. The IAM and United's announcement came just a few hours before a bankruptcy court judge was to rule on contract terms which the IAM had warned could trigger a strike. So when union chief Randy Canale announced the breakthrough, he appeared relieved.

Mr. RANDY CANALE (Union Chief): Look, the employees want to see their airline continue to fly. It is their jobs and their occupation. The process is wearing on everyone, and we can't wait to get this airline turned around and out of bankruptcy and get back to our normal lives.

CORLEY: United and the IAM have until June 17th to complete their deal. For United mechanics, there is no uncertainty. Joseph Prisco, president of AMFA Local 9, says mechanics had little choice but to approve a pact which calls for an annual $96 million in wage and benefit cuts over the next five years.

Mr. JOSEPH PRISCO (President, AMFA Local 9): We know that the judge was poised to actually make a ruling on abrogation of the contract, and the terms that United had filed that they actually wanted were worse than what we were voting on.

CORLEY: This is the second round of concessions for United workers. They gave up a billion and a half dollars in wages and benefits shortly after the airline filed for bankruptcy protection in December of 2002.

Cheryl Corley, NPR News, Chicago.

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