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United uncertainty rattles employees
Compiled from Times wires Managers have been telling United Airlines flight attendant Andrea Tempfer to keep smiling as she greets passengers, serves coffee and gives safety presentations. But it's been harder and harder as the airline inched closer to a bankruptcy filing, throwing her future and those of some 81,000 United employees into doubt, she said. "I seriously try hard," said Tempfer, who lives in Brandon and worked for Pan American World Airways when the venerable carrier went belly-up in the early 1990s. "But it's depressing." Chief executive Glenn Tilton, after meeting Thursday with leaders of the pilots union that holds the largest single stake in the airline, declined to say whether United will file for bankruptcy but said it is not inevitable. "What we have said is we're going to consider all of our options and nothing really is a foregone conclusion," Tilton told Chicago's WLS-TV. Nevertheless, United executives continued negotiations to put in place the financing the airline would need to keep flying in the event of a bankruptcy. Tilton said Wednesday that United would continue to fly whatever choice was made. United Airlines stock lost two-thirds of its value Thursday amid rampant speculation that the world's second-largest carrier can do nothing except file for bankruptcy after the federal government rejected its application for $1.8-billion in loan guarantees. The New York Stock Exchange had stopped trading in United parent UAL Corp.'s shares for most of the morning because of "news that's pending that could materially affect the trading of the stock," NYSE spokesman Ray Pellecchia said. Before trading was stopped, UAL shares opened down $1.84, or 59 percent, at $1.28 -- their lowest level in more than 40 years. Shares extended their decline after trading resumed in early afternoon, and at the close of trading were down $1, or 68 percent, at $2.12. That helped drag down the Dow Jones Industrial Average 114.57 points to close at 8,623.28. Rank-and-file United workers said they were worried about the possibility of layoffs, benefit cuts and worthless stock, especially because in recent years workers were given company stock in exchange for wage increases. "We've given our blood and sweat out there," said Daniel Kaulback, a baggage handler at O'Hare International Airport in Chicago. "It's not worth squat." Employees including pilot Charles Castelli of St. Petersburg were shocked when the federal Air Transportation Stabilization Board turned down United's loan guarantee application Wednesday. United pilots and flight attendants approved pay and benefit reductions required by the board to cut United's costs, among the industry's highest. Mechanics, the last major labor group, had been set for a second vote on a new, concessionary contract Thursday. "I thought things were moving smoothly, with the votes coming in," said Castelli, a Boeing 747 first officer with 14 years at United. Employees now wonder if the board caved in to pressure from the investment community, which didn't like that employees held three UAL board seats after trading pay cuts for a majority stake in the airline in the mid-1990s, he said. Castelli remains confident the airline will right itself eventually. But recovery plans can go awry when companies try to reorganize under Chapter 11 bankruptcy, he said. "We've lost a lot of pride in the last six months," Castelli said. "All these forecasts of gloom and doom can become a self-fulfilling prophesy." Tempfer, the flight attendant, says United management blundered its way into the financial crisis, with the airline's failed merger with US Airways last year as Exhibit No. 1. Just like Pan Am, United is moving out of valuable Latin American markets, she said. Tempfer remembers Pan Am employees taking pay cuts before the airline folded and hopes United workers won't end up in the same boat. "Everyone thinks the government won't let you go under, and then you get a slap in the face," she said. "You give your concessions and no matter how much you give, it never works." Mike Ommundson, a mechanic at O'Hare, questioned United's recovery strategy, which the federal board called inadequate. "There is no business plan," he said. "How are you going to turn the airline around by getting concessions from employees and parking aircraft?" Many employees said they were cutting back on spending. Denver ramp worker Rich Pijanowski, whose wife was laid off by United in February, said there will be fewer gifts under the Christmas tree this year and no more Colorado Avalanche hockey games. He said a lot of the workers he knows are trying to look ahead rather than dwell on history. "I think most of our group has gotten past how we got here and are more interested in how to get this thing turning in the right direction," he said. Kaulback, the baggage handler at O'Hare, said the possibility that worried him most was losing benefits. "You put a man in a corner and say now we're going to take your money and benefits from you -- you're going to see a lot of scared people, a lot of mad people," he said. "We have to have a decent life and take care of our families." Tempfer has nearly 11 years at United, enough seniority to protect her from a layoff any time soon. Still, she's thinking about going to school for a career as a massage therapist or personal trainer. It helps that her husband is in a more stable business: installing and repairing heating and air-conditioning equipment. "We need to have someone with feet on the ground," she said. -- Times staff writer Steve Huettel contributed to this report. Information from the Associated Press also was used.
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From the Times Business report
From the AP
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