PILOT GROUP PROFILE
By C. David Kelly, Senior Communications
Specialist, United MEC
Air Line Pilot, May 2004, p.18
Capt. Wendy Morse has spent many long hours and late evenings negotiating for United’s pilots. Nothing, however, compared to those chilly nights of March 2003. Faced with the threat of a bankruptcy judge imposing draconian changes to the pilots’ collective bargaining agreement under Section 1113 of the U.S. Bankruptcy Code, Capt. Morse and the United Master Executive Council Negotiating Committee were confronted with a choice: reach a deal or place their pilot group at the mercy of a bankruptcy judge whose primary objective was to protect the "estate" and ensure the financial viability of United Airlines.
"As pilots, we stand at a significant crossroads in our careers, our
industry, and our profession. We will bring this pilot group together to
work to confront the many challenges that await us. We will meet these
challenges and ensure that United Airlines emerges from bankruptcy a
stronger and more vital enterprise."
—Capt. Mark Bathurst, UAL MEC chairman
Under Section 1113, a debtor may ask the bankruptcy court for authority to reject labor contracts and modify any provision in them. An 11th-hour agreement with employees kept United management from filing its Section 1113 papers and allowed United pilots to help the airline move forward in its bankruptcy process. For the pilots, the agreement was the best option available, but it came with a heavy cost.
"Those negotiations were much like any other, with two exceptions," says Capt. Morse, then chairman of the United MEC Negotiating Committee and now vice-chairman of the United MEC. "What was different was that we were going down instead of up," she says. "We were simply trying to minimize the pain. It was like negotiating with a gun to our heads. And unlike the traditional Section 6 process, we had much less time to work."
Life for United’s pilots has been significantly altered since Dec. 9, 2002, the date United Airlines filed for Chapter 11 bankruptcy. The first significant hit to United’s economic well-being came on Sept. 11, 2001, when terrorists hijacked two United airplanes and killed the crews and passengers aboard. The downward spiral continued when the Air Transportation Stabilization Board rejected United’s loan guarantee application in late November 2002. This led to the company’s eventual bankruptcy filing.
Uncertainty about the future, as well as concerns about job security, pay cuts, and work rule changes, has plagued the pilot group and their union leaders. The restructuring agreement that the MEC accepted in March 2003, and the pilots ratified in April, drastically changed the environment and mindset of every United pilot.
A minimum 30 percent wage reduction, cuts to benefits, and the erosion of pilot-friendly work rules would have staggered many work groups. However, United pilots fought hard, working to keep one of America’s landmark companies flying and striving toward a brighter future.
"Working through bankruptcy hasn’t been easy. We have had to give up a lot," says Capt. Morse. "It has been my greatest challenge in all my years of being involved in ALPA work. But now we’re at the foundation from which we can rebuild, once the company emerges from bankruptcy."
The restructuring agreement went into effect on May 1, 2003. As onerous as the contract is, and with United still operating under the close scrutiny of the bankruptcy court, the United MEC is taking a proactive approach to representing its pilots. The new contract reduced the financial burden on the company, allowing it to clear a major hurdle and proceed with its bankruptcy case. The contract also presented several new challenges for the pilot group and the union.
"Our pilots paid a steep price, making many sacrifices to meet the demands of management and the DIP (debtor in possession) lenders," says the MEC chairman, Capt. Mark Bathurst. "I’m proud of our pilots and the way they’ve conducted themselves throughout this entire process. It hasn’t been easy for them, or for their families, who have shared this burden since December 2002."
"I think people have worked very hard throughout this ordeal to maintain
their faith in their union and their confidence in its ability to work
for them. Our focus has always been to protect the interests of our
pilots. We’ve taken a bad situation and done the best we could with it."
— Capt. Wendy Morse, UAL MEC vice-chairman
Threats to the pension plan, questions over stock distribution among employee groups after the company’s emergence from bankruptcy, and the recall of 2,172 furloughed pilots remain key issues for the United MEC.
"This is not an experience I’d want to relive," adds First Officer Mike Hamilton, the United MEC secretary-treasurer, who also fought on the front lines during restructuring negotiations as vice-chairman of Council 12 (Chicago O’Hare). "Watching this once financially healthy airline struggle economically and seeing the sacrifices and concessions that our pilots have made during the company’s bankruptcy have been painful. Making decisions as a union leader on behalf of my fellow pilots has made the experience even more daunting."
The pilots’ share of cost savings over the life of the 6-year restructuring agreement that went into effect in May 2003 is substantial. United pilots gave up an average $1.16 billion each year over the life of the contract.
Although management is hoping to emerge from bankruptcy sometime in late summer, life for ALPA’s union leaders within the United pilot group isn’t expected to return to normal anytime soon. What ALPA can do, however, is protect its pilots and ensure that United management adheres to the contract.
"Going forward, our goal is to look out for the best interests of our pilots here at United and for the 2,172 furloughed pilots who have paid the ultimate price for United’s economic problems," says Capt. Bathurst. "We have not only a strong legal foundation but also a moral obligation to make sure their careers are protected and enhanced. We will do this, whether through the contractual process or through the bankruptcy process."
While ALPA and the airline’s management have had contentious relations in the past, this time they’ve approached each other in a different manner. Both the union and management are committed to working together to ensure a more-secure future for the airline.
"My focus is on representing the interests of our pilots, and right now that means working to ensure that our company emerges from bankruptcy as a vibrant, competitive, and profitable airline," says Capt. Bathurst, who is also a member of the UAL Board of Directors.
"Our working together to achieve this goal is in the best interests of everyone, labor and management alike," Capt. Bathurst says. "But it also means that management must understand and value the contributions that pilots are making and respect the contract that we’ve negotiated. At the same time that we’re working to solve problems, we’ll see that the contract is enforced vigorously."
Although Capt. Bathurst recognizes that his pilot group has made substantial sacrifices, he is still optimistic. He says he believes that the union can lead the pilots through this difficult period and help them secure a more stable future.
"As pilots, we stand at a significant crossroads in our careers, our industry, and our profession," says Capt. Bathurst. "We will bring this pilot group together to work to confront the many challenges that await us. We will meet these challenges and ensure that United Airlines emerges from bankruptcy a stronger and more vital enterprise."
ALPA leaders such as Capt. Bathurst, Capt. Morse, F/O Hamilton, other members of the United MEC, and the many ALPA volunteers who serve on various committees can certainly relate to the old cliché that adversity builds character. They’ve witnessed firsthand how United’s bankruptcy has brought out the best in their fellow pilots.
"I think people have worked very hard throughout this ordeal to maintain their faith in their union and their confidence in its ability to work for them," says Capt. Morse. "Our focus has always been to protect the interests of our pilots. We’ve taken a bad situation and done the best we could with it."