United Continental Mechanics Approve New Labor Deal Six-year pact brings highest compensation in the industry

United Continental Mechanics Approve New Labor Deal
Six-year pact brings highest compensation in the industry
http://www.wsj.com/articles/united-continental-mechanics-approve-new-lab...
The pact is the first joint labor contract for United mechanics since the 2010 merger of United Airlines and Continental Airlines. PHOTO: ASSOCIATED PRESS
By SUSAN CAREY
Dec. 5, 2016 1:49 p.m. ET

A majority of the more than 9,000 mechanics at United Continental Holdings Inc. on Monday approved a six-year labor agreement that will lift wages, said the International Brotherhood of Teamsters union.

The new pact, reached after more than three years of bargaining, also brings furlough protection and wage resets if airline rivals’ technicians move above United’s pay and benefit offerings, the union said. The deal continues an industrywide trend of rich labor contracts being reached as airlines are producing record profits.

The pact is the first joint labor contract for United mechanics since the 2010 merger of United Airlines and Continental Airlines. While mechanics from the two premerger subsidiaries have long been able to work interchangeably on aircraft in the combined fleet, they couldn’t work side-by-side on the same plane. So the new rules will give United new scheduling and work efficiencies by being able to mix maintenance crews.

The mechanics in February widely rejected a prior proposed pact, calling it substandard and raising particular objections to the so-called B-scale, meaning lesser wage rates, holidays, vacations and sick leave for mechanics hired on or after the contract would have gone into effect.

The B-scale is gone from the new accord, which gives the group a $185 million signing bonus and immediately raises top pay scales by 28%, to $47.31 an hour. About 80% of the workers are senior enough to be at top scale. Overall, wages will rise 36.5% over the term of the contract.

“This contract represents the largest contract for a mechanics group in airline industry history,” said Capt. David Bourne, director of the IBT’s airline division. “It is a package worth a collective $1.7 billion in improvements in compensation and benefits over the current agreement.”

The mechanics are the final unionized group at United, the nation’s No. 3 airline by traffic, to agree to a postmerger combined contract, representing a victory for new United Chief Executive Oscar Munoz.In his year at the helm, he has focused on improving what had been poisonous labor relations.

In a statement Monday, Mr. Munoz said the successful vote will allow the company “to turn confidently to the future with the shared purpose of building the best airline in the world for employees and customers.” Earlier this year, United reached joint agreements with its flight attendants and negotiated contract extensions with pilots, dispatchers, ramp workers and customer-service agents.

Write to Susan Carey at susan.carey@wsj.com