Business International

United Airlines mechanics reject contract offer; union seeks strike

Image: United Airlines planes are seen on platform at the Newark Liberty International Airport in New Jersey, July 8, 2015. REUTERS/Eduardo Munoz


(Reuters) – Maintenance workers at United Airlines overwhelmingly rejected a new contract offer, their union said Tuesday, adding it will seek approval from U.S. regulators to strike.

More than 93 percent of mechanics who voted decided against the company’s offer, the International Brotherhood of Teamsters said in a release.

The union said it will petition the U.S. National Mediation Board to release it from mediated talks, although it will face a number of hurdles before workers can receive the legal go-ahead for a walkout. The U.S. agency did not immediately return requests for comment.

The vote marks a setback in United’s years-long effort to reach a joint deal with the technicians. It has yet to conclude a contract covering maintenance workers from both United and Continental since the carriers merged in 2010.

“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 the statement.

Chicago-based United more than doubled its adjusted fourth-quarter profit from a year ago to $934 million. Its contract offer provided for an immediate 25-percent raise and bonus checks averaging $9,000, though the Teamsters expressed concern regarding wages for incoming mechanics.

The National Mediation Board is not obliged to accept the Teamsters’ request to halt talks, according to Jerry Glass, president of labor relations consultancy F&H Solutions Group.

If it does, United and the union will have 30 days to reach a deal, after which the U.S. executive branch or Congress can intervene to avert a strike, Glass said.

There is “a very high likelihood” based on precedent that the U.S. president would appoint an emergency board to recommend a solution to prevent disruptions to passengers and interstate commerce, he said.

United is the third-largest U.S. airline based on January flight capacity.

“Although we are disappointed by this outcome, we are eager to get right back to the table,” said Oscar Munoz, chief executive of parent United Continental Holdings Inc, in a post on a public company website that is focused on labor talks.

Munoz has made boosting workers’ morale a priority since taking on the airline’s top job in September. The company recently secured a contract extension for pilots ahead of schedule.
United and the Teamsters paused talks in October after rival American Airlines Group Inc announced a wage hike, resetting what they considered was an acceptable offer.

(Reporting By Sudarshan Varadhan in Bengaluru and Jeffrey Dastin in New York; Editing by Saumyadeb Chakrabarty, Alistair Bell and Marguerita Choy)

Copyright 2015 Thomson Reuters. Click for Restrictions.

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