Subject: UAL seeks Pension Termination via Sect 1113 of Bankruptcy Code
With a Special MEC Update for Thursday, November 4, 2004, this is
MEC Communications Committee Chairman Steve Derebey.
Today we received a proposal for changes to our contract that the
Company asserts are necessary to secure financing to exit bankruptcy
and that they are seeking pursuant to Section 1113 of the Bankruptcy
Code. We want to share with you what we plan with respect to those
materials. We note the possibility that some of the other unions who
may also have received proposals may elect to deal with them in a
different, and more public, fashion.
The changes proposed are dramatic and include, as we have previously
reported, a proposal for termination and replacement of the pilots'
defined benefit pension plan. As always, we will want to carefully
review and cost out all of the Company's proposals. Full discussions
with all relevant MEC Committees, our ALPA staff, as well as our
financial, legal and economic advisors, will immediately commence. A
special MEC meeting will be held on November 15-17 to review the
proposal and to develop a response. We will not be sending out
anything further with respect to the Company's proposal until after
the MEC has had an opportunity to review and discuss the materials.
MEC Chairman Captain Mark Bathurst has prepared a letter which will
be sent to you tomorrow that outlines the process the Company will
seek in support of its effort to change the contract. This process
will include a hearing that will be scheduled by the Bankruptcy
Court. Prior to that hearing, the Company is required to negotiate
with ALPA concerning the Company's proposals.