United Airlines says it will seek to void labor deals

<br>CHICAGO (AP) _ In an effort to protect its $1.5 billion in interim financing, bankrupt United Airlines is heading to court to target its labor contracts. <br><br>United has until Feb. 15 to cut costs

Friday, December 27th 2002, 12:00 am

By: News On 6

CHICAGO (AP) _ In an effort to protect its $1.5 billion in interim financing, bankrupt United Airlines is heading to court to target its labor contracts.

United has until Feb. 15 to cut costs or it could lose the loans it has received so it could keep flying. So it plans to file a motion Friday in U.S. Bankruptcy Court, asking a judge to begin the process of voiding contracts with its unions.

Both United and the six unions view the filing as a procedural move.

If it is granted, United would have 51 days to negotiate an agreement with unions to cut wages by $2.4 billion. Otherwise, a federal judge could have the final say on labor contracts.

United _ the world's second biggest airline _ says its labor costs are the highest in the industry. So far, the company has not outlined anything specific about its latest cost-cutting proposals.

Spokesman Joe Hopkins said the carrier had no comment beyond a one-sentence news release announcing its plan.

The Elk Grove Village, Ill.-based carrier announced last week it would make the motion Thursday if labor groups did not agree to the wage cuts.

Union representatives have criticized United for giving them a list of proposed givebacks instead of a complete business plan. Labor groups want to see such a plan before agreeing to cost cuts, Air Line Pilots Association spokesman Dave Kelly said Thursday.

``Until we get that information, it's really hard for us to determine what the company is asking for and how we can work with the company to reach that rational business plan,'' Kelly said.

The union representing United flight attendants called the company's filing a ``positive development.'' Union officials said they'll keep working with United to help the airline recover.

United needs to slash its labor costs by $2.4 billion annually to satisfy its lenders, according to the flight attendants' union. The unions have already agreed on about $1 billion in yearly cuts, as part of United's failed try for a government loan guarantee.

The airline warned in its Chapter 11 bankruptcy filing on Dec. 10 that cuts were coming that would go well beyond its previous financial recovery plan, which called for $5.2 billion in labor cutbacks by 2008.