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Reuters
UPDATE - United defers decision on pension payment
Wednesday July 14, 12:23 pm ET
By Kathy Fieweger
(Recasts first sentence, adds statement by machinists union paragraph 3, other details, byline)
CHICAGO, July 14 (Reuters) - UAL Corp. (OTC BB:UALAQ.OB - News), parent of bankrupt United Airlines, on Wednesday said it has deferred a decision to make a Thursday payment to its pension plans of $72.4 million, a move quickly rebuked by union officials.
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http://us.ard.yahoo.com/SIG=126ud8v...lthinsurance.com/alliance=Yah20230&sid=FinROSThe No. 2 U.S. airline said in a regulatory filing that deferring the decision to make the minimum quarterly funding contribution would enable it to "manage resources and preserve its options" as it tries to line up funds to exit bankruptcy.
The International Association of Machinists -- one of the major unions at Elk Grove Village, Illinois-based United -- said it will "fight any attempt by United Airlines to impose a permanent solution to what may be a temporary, even self-correcting problem."
United, which filed for Chapter 11 protection in December 2002, has four pension plans for various groups of employees.
The plans are underfunded by about $4.1 billion over the next five years. That figure was unchanged despite a recent change in federal legislation that allowed underfunded companies to delay some payments known as deficit reduction contributions.
The federal government, under a body called the Air Transportation Stabilization Board, recently rejected United's request for backing of a $1.1 billion loan package to exit from bankruptcy. The company is now seeking alternative sources of funding, but it is not clear what the structure will be.
United said deferring the decision to make the pension payment has no impact on pension benefits currently being paid to retirees. By law, it has until Sept. 15, 2005, to make such payments, according to a spokeswoman.
MACHINISTS RESPOND
The IAM, which represents a number of employee groups at United including customer service agents and food service workers, said any improvement in ticket revenue, fuel prices or pension fund investments can "dramatically alter" United's current situation.
"This latest cash crisis at United does not warrant a declaration of war on pensions for employees who have already contributed massively to the rescue and recovery of this airline," said Randy Canale, President of IAM District 141, in a statement.
UPDATE - United defers decision on pension payment
Wednesday July 14, 12:23 pm ET
By Kathy Fieweger
(Recasts first sentence, adds statement by machinists union paragraph 3, other details, byline)
CHICAGO, July 14 (Reuters) - UAL Corp. (OTC BB:UALAQ.OB - News), parent of bankrupt United Airlines, on Wednesday said it has deferred a decision to make a Thursday payment to its pension plans of $72.4 million, a move quickly rebuked by union officials.
[size=-2]ADVERTISEMENT[/size]
http://us.ard.yahoo.com/SIG=126ud8v...lthinsurance.com/alliance=Yah20230&sid=FinROSThe No. 2 U.S. airline said in a regulatory filing that deferring the decision to make the minimum quarterly funding contribution would enable it to "manage resources and preserve its options" as it tries to line up funds to exit bankruptcy.
The International Association of Machinists -- one of the major unions at Elk Grove Village, Illinois-based United -- said it will "fight any attempt by United Airlines to impose a permanent solution to what may be a temporary, even self-correcting problem."
United, which filed for Chapter 11 protection in December 2002, has four pension plans for various groups of employees.
The plans are underfunded by about $4.1 billion over the next five years. That figure was unchanged despite a recent change in federal legislation that allowed underfunded companies to delay some payments known as deficit reduction contributions.
The federal government, under a body called the Air Transportation Stabilization Board, recently rejected United's request for backing of a $1.1 billion loan package to exit from bankruptcy. The company is now seeking alternative sources of funding, but it is not clear what the structure will be.
United said deferring the decision to make the pension payment has no impact on pension benefits currently being paid to retirees. By law, it has until Sept. 15, 2005, to make such payments, according to a spokeswoman.
MACHINISTS RESPOND
The IAM, which represents a number of employee groups at United including customer service agents and food service workers, said any improvement in ticket revenue, fuel prices or pension fund investments can "dramatically alter" United's current situation.
"This latest cash crisis at United does not warrant a declaration of war on pensions for employees who have already contributed massively to the rescue and recovery of this airline," said Randy Canale, President of IAM District 141, in a statement.
