United, Mechanics Agree on Cuts

CHICAGO, May 16 -- United Airlines and its mechanics union reached a tentative agreement on a new five-year contract Monday, moving the carrier a step closer to securing the company-wide labor concessions it seeks in order to exit bankruptcy protection.

The tentative deal gives United the $96 million in annual wage and benefit cuts it was seeking from the Aircraft Mechanics Fraternal Association, union spokesman Terry O'Rourke said late Monday.

The deal was announced as a federal bankruptcy court trial on United's proposal to unilaterally impose lower wages and benefits moved into its final days. Both the mechanics union and the machinists union, which has not yet reached a contract settlement, have threatened to strike if United broke the contracts without consensual agreements.

A mechanics' agreement must still be ratified by the 7,000 mechanics at United, a unit of UAL Corp. They rejected the last tentative agreement in January, with 57 percent voting no.

The results of the new ratification vote will be released May 31, the union said.

"It's not something to celebrate," O'Rourke said of the agreement. "We are under the coercion of the bankruptcy court process, and we made the best of bad choices."

United officials did not immediately return calls for comment Monday night.

The company and unions are trying to wrap up deals before Judge Eugene Wedoff rules on United's motion to replace existing contracts with lower pay and benefits.

United finished presenting its case Monday, and Wedoff scheduled closing arguments for Thursday.

United says it needs the cutbacks so it can persuade banks to lend it $2 billion to leave court protection.