United Continental Mechanics Reject Tentative Labor Contract
17 February 2016 - 7:20AM
Dow Jones News
A wide majority of the 9,000 mechanics at United Continental
Holdings Inc. voted to reject a new six-and-a-half year labor
contract, their first tentative joint agreement since United and
Continental merged in 2010, said their union, the International
Brotherhood of Teamsters.
The union called the agreement "substandard" and said it
particularly objected to the idea of implementing a new wage scale
for new mechanics. "At a time when United Airlines is incredibly
profitable, it is clear that mechanics deserve a better offer from
the company," Jim Hoffa, Teamsters general president, said in a
statement.
The Teamsters said they would petition the National Mediation
Board to declare the talks at impasse so the mechanics can go out
on strike. The board, which oversees labor relations in the airline
and railroad industries, normally wouldn't reach that determination
until more bargaining is achieved.
Oscar Munoz, United's chief executive, said it a statement that
he is disappointed by the outcome. But he said, "we are eager to
get right back to the table. I will personally meet with our labor
leaders to make sure we reach an agreement that will work for our
technicians." Mr. Munoz, who suffered a heart attack in October and
later had a heart transplant, isn't expected to be back full time
at the company until later in the first quarter.
United mechanics aren't the first airline employee group to
spurn a tentative contract. With the major airlines producing
record profits, other labor groups also have shown their
dissatisfaction with contract offers they felt were too low. The
pilots at Delta Air Lines Inc., shot down a contract proposal last
summer, as did pilots and flight attendants at Southwest Airlines
Co.
The rejected United mechanic agreement could have included a 25%
increase in the top mechanics hourly rate and a 33% cumulative
increase over the duration of the agreement, along with an $80
million signing bonus and furlough protection for all active
mechanics. But it also had newly established wage scales, holidays,
vacation and sick leave for mechanics hired on or after the
contract went into effect, a so-called B-scale that unions
detest.
Write to Susan Carey at susan.carey@wsj.com
(END) Dow Jones Newswires
February 16, 2016 15:05 ET (20:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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