Thursday December 20, 5:32 pm Eastern Time
Bush Moves to Avert United Strike
By Adam Entous
WASHINGTON (Reuters) - President Bush on Thursday headed off a threatened strike by mechanics at UAL Corp.'s (NYSE:UAL - news) United Airlines during the busy holiday travel season, appointing an emergency board to try to resolve the dispute during a two month "cooling-off period.''
"The president is concerned about the economy, particularly after September 11, and the effect that airline strikes would have on the economy, on the ability of the public to travel at this time,'' White House spokesman Ari Fleischer said.
Bush's appointment of the presidential emergency board by executive order automatically prevents a strike or a lockout by the company for 60 days.
"He (Bush) urges all parties to work together to resolve their differences,'' Fleischer said.
United and the International Association of Machinists said in separate statements they would continue negotiating to try to reach agreement on a contract.
The presidential emergency board has 30 days to come up with a suggested settlement to the dispute. Then the airline and union have 30 days to consider the proposal before they can take their own action.
"You can look at this as a cooling-off period,'' Fleischer said.
Bush has repeatedly intervened to avoid airline-related strikes this year. He prevented a strike by the Northwest Airline (NasdaqNM:NWAC - news) mechanics and facilitated settlements for Delta Air Lines (NYSE :) AL - news) pilots and flight attendants at AMR Corp.'s (NYSE:AMR - news) American Airlines.
The United dispute is the first airline industry standoff between labor and management since the Sept. 11 attacks.
Industry losses have mounted as major carriers, buffeted by turbulent economic times and shaky public confidence in air travel, struggle to regain their financial footing since the hijack attacks on New York and Washington.
Stung by a sharp decline in business and leisure travel and overall economic weakness, United is losing $15 million per day. It accounted for roughly half of the $2.46 billion in net losses reported by the top eight U.S. carriers for the latest quarter.
United mechanics voted 99 percent last week to authorize a strike. They say they have gone without a pay raise since 1994.
Union spokesman Joe Tiberi said United machinists would strike in 60 days if no agreement were reached.
"We are disappointed that United Airlines sought to stop negotiations and appeal to the White House instead of spending the last 30 days negotiating which is where we all should have been,'' Tiberi said.
United said it was fully disclosing the company's financial situation to its unions in a bid to craft turn-around plans.
"Our hope is that a common understanding of the facts will lead to some common measures to preserve good jobs and return the company to profitability soon,'' the airline said in a statement.
UAL Corp. stock fell 8.37 pct on Thursday, down $1.10 to $12.05 on the New York Stock Exchange.
United and its machinists were thought to be near agreement before the Sept. 11 attacks, but progress stalled as United fights to survive after losing a record $1.16 billion in the third quarter.
After mechanics rejected an arbitration offer in November, the National Mediation Board recommended that Bush create a special Presidential Emergency Board to address the dispute.
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