"U.S. absorbs UAL pensions, strike looms"

Thursday, June 30, 2005

U.S. absorbs UAL pensions, strike looms
Move will save airlines roughly $645 million a year but may prompt strike by
flight attendants.

 
CHICAGO (Reuters) - The U.S. government on Thursday took over pension plans
covering flight attendants and other workers at UAL Corp.'s bankrupt United
Airlines, a move that may trigger a labor strike by the flight attendants. 

The Pension Benefit Guaranty Corp. (PBGC) said the plans covering attendants
and administrative employees are underfunded by more than $4 billion and
cover more than 70,000 current and former workers. 

The airline won court approval in May to pass along its burdensome pensions
to the government, a shift that will save the airline about $645 million a
year, and cut retirement benefits for UAL employees. 

A spokeswoman for the Association of Flight Attendants said termination of
their pensions represents a unilateral change to their contract, and that a
strike therefore is legal. 

She warned that strikes could begin immediately, but added that the union
also is pursuing legislation and litigation aimed at preserving the
pensions. 

United, the No. 2 U.S. airline, has said a strike would violate the
conditions of the U.S. Railway Labor Act and is illegal. 

The union said it intends to keep its pensions intact, even if it means
going on strike. 

The PBGC has already assumed control of the pension plan for airport ground
workers and expects to take over the pilots' plan once legal issues are
resolved.


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