Some at United cut and run
Al Lewis, Business Columnist
Denver Post
Thursday, May 12, 2005

United Airlines employees may feel like martyrs if they go to work and fools if they go on strike.

There may be another option:  Quit.

After 37 years as an aircraft mechanic, Bob Stone did just that April 1.

Stone, 55, took early retirement and is forming a timber business with his brother and his son.  With any luck, he will soon find wooded construction sites that need clearing.  He'll cut trees into lumber with a trailer-mounted saw mill.

Stone, who lives in Lakewood, is taking side jobs fixing dump trucks and tractors to hedge his entrepreneurial bet.

He's not sure how his company, Stone Environmental Engineering Services, will fare.

But the troubles at United Airlines are endless, and life is not.

"I just couldn't work for these thieving, lying managers anymore," he said.  "I would rather live in a tent."

You'll pardon Stone's venom.  He is one of about 120,000 current and future retirees at United, many of whom lost at least one quarter of their pension benefits this week.

On Tuesday, a federal bankruptcy judge ruled that United can dump its pension obligations on the U.S. Pension Benefit Guaranty Corp.  The pensions are under-funded to the tune of $9.8 billion - but lawyers have a funny way of wording things.

"The global settlement between United and PBGC is a landmark achievement in United's restructuring," United bankruptcy attorneys said in a court filing.

They did not call it the largest pension default in U.S. history, which it is.  Or the wholesale fleecing of 120,000 people, which it is.  But a "landmark achievement,"   as if their mothers would be proud.

On top of this legal gutting, United is asking the bankruptcy court to approve yet another steep round of pay cuts for its employees.

"This really hurts," said Jody Weant, who has worked as a flight attendant for 18 years and is president of the Denver Council of the Association of Flight Attendants. "This is really devastating."

It's so bad that an increasing number of working United flight attendants are looking for something else to do with their lives, Weant said. Already, hundreds of flight attendants who were put on furlough refused to return to work when given the chance, she said.

"With the fear and frustration, I've never seen morale at this level," Weant said.

United isn't suffering from mass defections, but the airline has warned in recent bankruptcy filings that it may not be able to retain its best employees.  And by defaulting on pensions, United's implied message to employees is that they are on their own.

"I don't know how United is going to rebuild a world-class airline when they keep losing world-class employees," said Bill Moons, president of the Denver-area chapter of the Aircraft Mechanics Fraternal Association.

Unions representing machinists, mechanics, flight attendants and bag handlers have threatened to strike.  But striking could be suicide.

"Employees realize that if they walk out now, it will cause the immediate death of United," said Anthony Sabino, a business law professor at St. John's University in New York.  "On the other hand, the motive to work with management has disappeared.  They now are just hanging on for mere crumbs."

In letting United ditch its pensions, U.S. Bankruptcy Judge Eugene Wedoff called it the "least bad" solution.  After years of labor strife, shoddy management and declining economics, United Airlines has nothing but bad choices left.

Defaulting on pensions, cutting pay and enraging long-term employees are the bad choices United has besides folding. The desperation level rises with the price of jet fuel.

Why would anybody hang around for this if they didn't have to?

Stone would rather cut down trees and mill them into lumber - which sounds like a lot of hard labor for a 55-year-old man.

"Changing an engine on an airplane in the middle of the night isn't easy either," he said.  "I'm just thankful I have options.  I'm glad I got out of that place and away from all of that stress."

Al Lewis' column appears Sundays, Tuesdays and Fridays. Reach him at 303-820-1967 or alewis@denverpost.com