"United loses pension ruling"

Friday, September 24, 2004
  
Judge sides with union on United pension issue
The Associated Press

 
Chicago - A federal bankruptcy judge today ruled against United Airlines in
a procedural dispute, siding with unions who said the company submitted
unsubstantiated factual claims about how employees would be affected if
their pension programs were terminated. 

Judge Eugene Wedoff granted an emergency motion filed by United's machinists
and flight attendants, striking from the record a 107-page document which
parent company UAL Corp. filed with the court late Thursday.

The ruling does not derail United's controversial bid to shed its pension
obligations but underscores that eliminating them will not be achieved
without a legal battle.

United is the dominant airline at Denver International Airport.

The unions had key backing in their emergency motion from the Pension
Benefit Guaranty Corp., the government agency that would have to take on
billions of dollars in obligations if United terminates the pensions.
  
In the filing, United said its pension plans are in far better financial
condition than previously estimated and that the impact of terminating them
would be less than initially feared. It said its four pension plans are
underfunded by $2.7 billion, as opposed to the $8.3 billion estimated by the
pension agency.

The government agency strongly objected to the United filing, telling the
court it was "procedurally improper, gives potentially opposing parties no
realistic opportunity to respond and serves no legitimate purpose." Wedoff
agreed with that reasoning at a hearing today morning.

United spokeswoman Jean Medina said the company was disappointed.

"We still believe the information is important for all of our employees and
retirees and other stakeholders," she said. "We will continue to make the
information briefs available." United's pilots, who would take by far the
biggest hit if pensions are eliminated, had joined the other employee groups
in assailing the filing.

"No amount of self-serving sugarcoating by the company's lawyers can mask
the plain fact that ... the immediate impact on thousands of individual
retired and active pilots will be devastating," the Air Line Pilots
Association said late Thursday.


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