In a potential setback for a union group seeking to buy UAL Corp.'s United Airlines, a group of non-contract employees says time is running out for the buyout group to accept their proposals.
The non-contract employees said in a news release they had developed a package of wage concessions, benefit modifications and other elements under which they could support the buyout plan.But the United Employee Acquisition Corp., the entity formed by the unions to handle the proposed $4.54 billion buyout, has not agreed to the package, a news release from System Roundtable said.
System Roundtable is the top rung of a series of groups of non-contract employees which effectively has become the non-contract employees' bargaining agent in the buyout effort.
Their support is not essential to the proposed deal, but the opposition of non-contract employees could complicate the unions' attempts to raise financing.
The buyout group's contract to buy UAL will lapse if financing is not obtained by Aug. 10. If financing is secured, the group would have until the end of the year to close the deal.
Under the agreement approved April 6 by UAL's board, United's pilots would own 37.9 percent of the company's stock, machinists would own 35.7 percent, non-contract employees would get 14.3 percent and United flight attendants would own 12 percent.
In the news release, System Roundtable said, "We are very disappointed. We think it is particularly disturbing that UEAC has not yet been able to resolve the issues relating to the non-contract employees.
"It is also surprising that agreement on this package, which is a test of UEAC's check and balance governance system, has not yet been finalized," the release said.
"If this package is not agreed to very shortly by UEAC, it does not bode well for UEAC's ability to make the business judgments that it will certainly face in trying to finance the proposed leveraged buyout and, if that transaction is completed, in running the airline," the release said.
Hank Krakowski, a spokesman for the UEAC, declined to comment on System Roundtable's stance and said he was not familiar with the package of terms.
Non-contract workers comprise over one-third of UAL's total work force of about 71,500 people. They include reservations and ticket agents, professional and technical staffers, and management and supervisors excluding Chairman Stephen Wolf and other top officers.
The union group includes the Air Line Pilots Association, machinists and the Association of Flight Attendants.
The union group has proposed overall employee wage and benefit cuts totaling $2 billion over five years to offset buyout costs.
At UAL Corp.'s annual meeting April 26, Daryl Thorogood, a United reservations agent from San Francisco, said the exclusion of salaried and management employees from buyout negotiations was "rude, illegal and undemocratic."
Thorogood said the non-contract employees have had no voice in deciding how much they will give up.