United Airlines' machinists union opposed a motion by the airline's parent, UAL Corp., Chicago, to authorize termination of its defined benefit pension plans, according to court papers filed today in U.S. Bankruptcy Court in Chicago. The machinists' filing said the company's request, made Monday, is "proof positive" that United's "management has lost its way."
Attorneys for the International Association of Machinists and Aerospace Workers argued that rejecting the machinists' collective bargaining agreement and terminating the workers' pension plan "at this juncture is management's most recent, and most desperate, attempt to make United a more attractive investment to potential financiers." The IAM's objection said the company is seeking authority to terminate the plans without fully exploring "less drastic alternatives to terminating all of their pension plans."
Airline officials have said the cost savings that would be provided by terminating the plans would help the company obtain necessary exit funding and emerge from bankruptcy. IAM attorneys contended, however, that UAL is seeking to terminate the plans without committed financing and "cannot know what a secured lender or capital financier would demand in exchange for actually lending money."
United spokeswoman Jean Medina did not return a call seeking comment by press time.