Teamsters General
President Hoffa Stands Up for UAL Mechanics
Mr. Glenn
F. Tilton
Chairman
of the Board
President
and Chief Executive Officer
United
Airlines Corporation
Dear Mr.
Tilton:
On behalf of the overwhelming
majority of United Airlines (UAL) mechanics who have shown their support
for representation by the International Brotherhood of Teamsters, I am
writing you as a member of UAL Corporation’s Board of Directors. We have serious concerns
regarding UAL’s plan to break up the Company by selling crucial and very
profitable assets. In
particular, we are concerned that UAL intends to sell its United
Services maintenance division, including its San Francisco Maintenance
Base, and Mileage Plus Frequent Flier Program. We believe spinning off these
units could jeopardize the long-term viability of the Company, which
only last year emerged from the largest airline bankruptcy in the
history of the
Furthermore, we call on you to
take immediate steps to restore the retirement savings of mechanics and
other UAL working men and women who have yet to reap the benefits of the
Company’s recovery while UAL’s top executives received multi-million pay
packages. This year, UAL
enjoyed a third-quarter surge in profits of 76% to $334 million,
signaling UAL’s continued post-bankruptcy success. UAL’s mechanics and all of its
other employees have worked hard, with so much pride, and have
sacrificed to make the Company profitable by attracting customers and
keeping UAL’s planes safely in the air.
The sale of all or part of
the Company’s maintenance division would render completely futile the
terrible financial sacrifices made by the mechanics to help the Company
through bankruptcy. UAL mechanics accepted huge wage and benefit cuts
and suffered massive layoffs in order to help the Company through its
bankruptcy to avoid liquidation; they helped save the Company a total of
over $2.5 billion in wages and benefits between 2003 and 2010 and lost
their defined benefit pensions.
Mechanics made these sacrifices with the understanding that they
would share in the Company’s future success. The sale of the maintenance
division, however, signals the Board of Directors’ intention simply to
“lock in” the mechanics’ sacrifice, thereby depriving them of a full and
fair opportunity to benefit from the Company’s turnaround.
The Board of Directors’
apparent intentions with respect to the mechanics is starkly contrasted
by its treatment of senior management.
UAL senior managers have already benefited from UAL’s turnaround. The top 400 executives and
managers received 10 million shares of company stock, or approximately 8
% of the total shares issued when UAL emerged from bankruptcy in
February 2006. In addition,
the top five executives alone took home pay packages in 2006 that have
an estimated total value of more than $100 million, and UAL contributed
over $4.2 million toward their pensions.
The Company’s plan to sell
Mileage Plus is also quite troubling not only for UAL employees but also
for the flying public, in particular the many business travelers who
have been loyal to the Company because of its frequent flyer program and
who tend to pay for premium services.
I understand that Mileage Plus has generated significant profits
for the Company since it emerged from bankruptcy and that it was the
only profitable division during UAL’s bankruptcy. We believe that the
benefits of spinning off Mileage Plus are unclear at best and hope that
UAL is not sacrificing a strategic asset for a short term gain that is
not sustainable or productive in the long term.
However, should the Board
decide to spin off Mileage Plus, the proceeds must be used to restore
the retirement security that UAL mechanics and other employees lost
during bankruptcy.
Mechanics and other UAL working men and women lost a huge percentage of
their expected pension returns when the Company passed its pension
obligation onto the Pension Benefit Guaranty Corporation. The current $7.5 billion
potential value of Mileage Plus raises troubling questions about the
bankruptcy and transfer of pension obligations to taxpayers.
UAL mechanics deserve a fair
share of UAL’s success.
Diminished in numbers, they have worked harder and longer hours to
ensure the safety and reliability of UAL’s planes, which in turn
contributed to the strong passenger demand that ensured the financial
success of this recent quarter.
Thousands of mechanics who had many years of tenure with the
Company are on furlough status, with little hope of returning to work,
and inadequate pension security.
Furthermore, recent estimates place the average age of the oldest
jets in United’s fleet at between 15 and 18 years, making the work of
mechanics all the more important in ensuring the airworthiness and
reliability of UAL’s service.
The mechanics’ sacrifices must not be forgotten or taken for
granted. Their sacrifices,
hard work and dedication to this Company must be fairly recognized and
rewarded.
Thank you for your attention to
this important matter. I
look forward to your reply.
Sincerely,
James P. Hoffa
General President
JPH/dc
cc: Sen. Daniel Inouye,
Chairman, Senate Commerce, Science and Transportation
Sen. Edward M. Kennedy,
Chairman, Senate Health, Education, Labor and Pensions Committee
Sen. John D. Rockefeller IV,
Chairman, Senate Aviation Operations, Safety and
Rep. Jerry Costello, Chairman,
House Subcommittee on Aviation
Rep. George Miller, Chairman,
House Education and Labor Committee
Rep. James Oberstar, Chairman,
House Transportation and Infrastructure Committee