Glennboy is lurching from one failed business plan to the next. His most recent scheme to shrink the airline into profitability creates an “opportunity” to get out early. A hand full of Members may benefit. Most should beware. Everyone needs to know the facts and skip the rumors.

Straightening Out “Early-Out”

Local 1782 is flush with rumors. Here are facts.

Relatively few Members will be able to participate in this buy out, but many have questions and concerns. SkyNet FAQ's are below. The actual Letter Of Agreement is nearly identical to that of United flight attendants. Sister McBitter of course has her opinions, which follow. It’s always smart to consult professional sources before making serious life decisions, which include this buy out.

What the buy out means to you depends on personal circumstances.

If you happen to be happily married to the CEO of a hospital, or you’re an heiress with a fortune (in a bank other than Indymac), then taking United’s Customer Service buy out is relatively cut-and-dry. All the rest of us need to stop and think.

Basically the buy out is a cash severance dolled out in twelve monthly installments, and it also includes flying benefits. It is offered to “older” employees age 45 and up with fifteen or more years seniority.

Conspicuously missing is a medical benefit.*

That means you’re on your own if you get sick and aren’t covered by somebody else’s medical plan, such as that of a securely employed spouse. *A special circumstance applies if you are fifty five years or older with fifteen or more years seniority: You do get normal retiree medical benefits in addition to the buy out – but only at age 55 and up.

Not having a retiree medical benefit is significant in two ways. Age related medical conditions are more likely to occur at forty five and up, and the cost of health care and insurance is escalating. Also consider this. If and when a medical plan is paid by your employer, in addition to typically being cheaper to purchase than an individual plan, it is paid with pre-tax income.

This concept of pre-tax value is something to keep in mind in other circumstances as well, i.e. in future Contract negotiations: A walloping pay raise may be sexy, but a pre-tax benefit may carry more value.

Here’s what’s worth your consideration.

Take the buyout and run? If the airline goes bankrupt, at least you got something, right? Not so fast. What if UAL goes belly up and bails out of its promise to pay the monthly installments? The answer is unknown, and the company’s record of honoring its obligations is poor. A more immediate question is how do you get health insurance if you leave United?

Of course there’s COBRA but beware: It may differ significantly from your current insurance plan, and it expires after eighteen months.

You can probably score an individual plan if you can afford it. HIPPA laws guarantee that insurance will be offered by an insurance company if you recently participated in a group medical plan, i.e. at United. There’s a major catch. The insurance carrier can still “rate” you. That means you may be guaranteed health coverage, but the individual premium could be unaffordable.

You can also seek and obtain another job with medical benefits. Doing so may give you the best of both worlds, especially if you detest Glennboy’s sorry corporation. You may pocket some severance dough, get medical coverage from your new employer, and work in better conditions with a future. What's more, if you already have a part-time or full time job by the time you separate, you are in far better shape than someone scrambling for employment in the event UAL corporation goes belly up. The important thing is having a new job and insurance coverage before you leave Glennboy.

Just to be clear, talking about United Airlines going out of business is not the same thing as predicting it will. The point in talking about a worse case is that it’s easier to plan for hard times when things are relatively normal -- even if at the moment life isn’t great.

SkyNet FAQS on the IAM’s “Early Out” Agreement (Rev 07/2008 WHQLR)

This information is ripped directly off of SkyNet, word-for-word, as of July 14, 2008. It’s a good idea to check SkyNet directly for any updates or change in language.

1. Who is eligible for the Early Out Program?

a. Active full time IAM represented Ramp and CSR employees at the stations and job classifications listed in Attachment A
b. As of September 7th, 2008 you must be at least 45 years of age with a minimum of 15 years of Company service

2. How do I submit my information for consideration?

You may submit for the Early Out Program one of two ways:
a. Online: SKYNET Main Page > DEPARTMENTS > AIRPORT OPERATIONS > IAM EARLY OUT
b. Fax the early out option form to 847.700.3690

3. How do I know if my submission form was received?

You will receive a confirmation email to the email address provided on your online or faxed submission form.

4. How many employees will be awarded an Early Out Package?

Early Out packages will be awarded to the number of eligible IAM represented employees listed in Attachment A. However, the Company does reserve the right to award Early Out Packages in excess of the numbers listed in Attachment A if there are more eligible applicants.

5. May an employee who has submitted retirement paperwork rescind his/her retirement and apply for the Early Out Program?

Yes, the employee must rescind his/her retirement prior to the original retirement effective date. You must contact your manager to rescind your current application for retirement before applying to the Early-Out Program.

6. Are the required years of service based on Company or Classification seniority?

The required years of service is based on the employee company seniority.

7. Why is the Early Out Program limited to employees who are age 45 & older and who have at least 15 years of service?

The company designed the program to comply with IRS rules regarding tax-advantaged retirement benefits.

8. If the employee is eligible for retirement outside of the Early Out Program (i.e., 55 years old with minimum 10 years of service) may he/she be awarded the Early Out Package?

The employee may retire, with passes & retiree medical, and be awarded the Early Out with pay provided under the terms of the Early Out Program only if he/she is 55 and has at least 15 years of service. Note: Normal retirement eligibility (age 55 and at least 10 years of service) has not changed. top

9. Why is the program only offered to full time and not part time employees?

The company has designed the program for full time employees only in order to keep the program aligned with our current financial circumstances. Offering the program to both full time and part time employees would have increased the cost of the program beyond the point at which it fell within our current financial constraints.

10. Why is the program not offered to all classifications represented by the IAM?

The decision to not offer the program to all classifications is one reason United is able to offer an Early Out program. Offering the program to all groups would have increased the cost of the Early Out program beyond the Company’s current financial limitations.

11. When will I be allowed to submit my election for the Early Out Program?

Submissions will be accepted starting at 1600 CDT on Friday July 11th, 2008. Submissions will not be accepted after 0800 CDT Friday July 25th, 2008.

12. When will I know if I am awarded an Early Out Package?

You will be notified of your award on or before August 1, 2008.

13. May I rescind an Early Out Program Submission?

Yes, an employee may rescind their submission online or via fax. Simply complete the submission form again and select the rescind option prior to 0800 CDT Friday July 25th, 2008.

14. Is an employee currently on a level of discipline or pending discipline eligible for the Early Out Program?

An employee who is currently on discipline is eligible to apply for the Early Out Program. However, if an employee has been issued a Letter of Charge that may result in termination, the Early Out Program award will be held in abeyance until the outcome of the hearing. If the hearing decision results in the employee’s termination, the employee’s Early Out Program award will be revoked.

15. If I am awarded an Early Out Package, what is my last day of work?

The employee’s last day of work will be September 6th, 2008.

16. When will I receive my severance payment(s)?

The severance payments will be divided equally and paid out once a month for 12 months. Each payment will be made on or about the first business day of the month. The payments will be mailed to your home. Note: Please ensure your mailing address in Sky Net is correct. Questions on how to verify or change your mailing address can be handled via the HR Ops Call Center: 877.825.4767

17. Why is the severance made in payments rather than a lump sum?

The decision to pay severance in payments is a key component to making the Early Out Program a financially affordable option for United Airlines.

18. Will my severance be taxed?

Yes, taxes and withholding will apply to the monthly severance payments.

19. What happens if an employee dies before receiving all twelve severance payments?

The remaining payments will be made to the IAM represented employee’s heir(s)/estate according to the same rules that United follows when paying out final pay for a deceased employee.

20. What is the current retiree pass policy?

Passes are unlimited and include other travel programs such as United Express, Retiree Interline Travel, Companion Travel, Discount 20 Positive Space Travel, and Emergency Travel on United. You may access a summary listing of retiree pass benefit programs and policies on Sky Net at TRAVEL > TRAVEL PRIVELEDGE SUMMARY > RETIREE

21. May I still use Performance Incentive Passes if selected for the Early Out Program?

Employees that elect Early Out will be able to use the incentive passes until their expiration date.

22. Is the “survivor” privilege included in the Early Out program pass travel benefit?

Participants in the Early Out program shall be entitled to the same retiree pass travel benefits on the same terms and subject to the same conditions, present & future, as retirees. Therefore survivor privileges will be the same.

23. Was there any consideration of medical benefits for this program?

Yes, the decision to not offer medical benefits is one reason United is able to offer an Early Out program. Offering any continuation of medical benefits would have increased the cost of the Early Out program beyond the Company’s current financial limitations. However, an employee who is eligible for the Early Out program and who is also eligible for retirement will be eligible for retiree medical benefits under our current retirement policy. If an employee is not eligible for retirement he/she may chose to continue medical benefit coverage for 18 months under COBRA.

24. If I accept the Early Out program offer, will I qualify for unemployment?

United reserves the right to contest unemployment claims.

25. Can I apply to work for United after I accept the Early Out Package?

An employee who elects and is awarded the Early Out Package may reapply for employment with United. If selected, he/she would be considered a new hire.

26. Where can I get additional information if I have questions about the Early Out program not answered here?

You may contact the HR Operations Call Center @ 847.700.3172 (unitel 700.3172) or toll free @ 877.242.0075.

The “Letter of Agreement” contains the actual language of the “Early Out” agreement

Like the FAQS above, this is also ripped off word-for-word from SkyNet as of July 14, 2008. Checking SkyNet directly for any updates or change in language is a good idea.

LETTER OF AGREEMENT BETWEEN UNITED AIRLINES, INC AND THE PUBLIC CONTACT EMPLOYEES IN THE SERVICE OF UNITED AIRLINES, INC. AS REPRESENTED BY THE INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS

THIS LETTER OF AGREEMENT is made and entered into in accordance with the Railway Labor Act by and between UNITED AIRLINES, INC. (hereinafter referred to as the “Company”) and the INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS - IAMAW (hereinafter referred to as the “IAM”).

The Company shall offer certain eligible full-time Public Contact employees a one-time opportunity to separate voluntarily from the Company with a severance payment and full retiree pass travel benefits (hereinafter referred to as the “Early Out Program” or “Early Out Package”) as set forth below:

1. Eligibility:
Up to the number of full-time Customer Service Representatives and Service Directors – Customer Service identified on Attachment A (the “Attachment A Number(s)”) who satisfy the following conditions: a) are eligible to be furloughed, without regard to one’s seniority and whether or not the individual actually will be subject to an imminent furlough, and b) as of September 7, 2008, will be at least 45 years of age with at least 15 years of service to the Company. If the number of eligible applicants exceeds the Attachment A Number(s), Early Out Packages will be awarded by Company seniority to the senior eligible applicants at the particular named location and within the named job classification. Additionally, the Company reserves the right to award Early Out Packages in excess of the Attachment A Number(s) if the number of eligible applicants exceeds the stated number at a location and within a job classification.

2. Subsequent Early Out Offer:
The Company also may make an Early Out Program available to mitigate the impact of schedule changes planned for an early November implementation. If the Company offers a subsequent Early Out Program, the Company will provide an updated Attachment A and the Company will provide the IAM with an updated date for benefit commencement/employment separation in early November 2008, as well as new dates for determining eligibility and application processing timelines. All other terms of this Early Out Program will remain unchanged in a subsequent program offering.

3. Pass Travel Benefit:
Commencing September 7, 2008, participants in the Early Out Program shall be entitled to retiree pass travel benefits on the same terms and subject to the same conditions, present and future, as retirees.

4. Severance Payment:
Participants in the Early Out Program shall receive a severance payment of $500.00 per full year of service to the Company, up to a maximum of $12,500.00. Severance payments shall be divided into 12 equal installments. Participants shall be paid one installment on or about the first business day of each calendar month of 2009. All payments will be subject to applicable taxation and withholding.

5. (A paragraph “5” does not appear on the Letter Of Agreement in SkyNet copied on July 14, 2008).

6. Separation from Employment:
Participants in the Early Out Program shall terminate their employment with the Company effective September 7, 2008 (i.e., last day of employment shall be September 6, 2008).

7. Application Process:
Participation in the Early Out Program is voluntary. Applications for Early Out Packages must be received on or before 8:00 a.m. Central Time on July 25, 2008, and applicants will be notified of their inclusion or exclusion in the program on or before August 1, 2008. The Company will meet and confer with the IAM regarding other details of the application process.

8. Forfeiture for Conduct:
If an eligible employee is awarded an Early Out Package, but before September 7, 2008, is charged with conduct that could lead to discharge, the employee’s Early Out Package shall be held in abeyance pending an investigative review hearing pursuant to the provisions of Article XVII of the Public Contact Agreement. If the outcome of the investigative review hearing is anything other than termination of employment, the employee retains the Early Out Package. If the outcome of the hearing is termination of employment, the employee forfeits the Early Out Package. In a case of termination, if the System Board of Adjustment orders reinstatement, the employee shall have the option of receiving the Early Out Package in lieu of reinstatement

9. No Implied Changes to the Public Contact Agreement:
This Letter of Agreement does not modify the Public Contact Agreement except as specifically provided herein.

IN WITNESS WHEREOF, the parties have signed this Letter of Agreement this 11th day of July 2008.
FOR UNITED AIRLINES, INC. FOR THE PUBLIC CONTACT EMPLOYEES IN THE SERVICE OF UNITED AIRLINES, INC.
_/s/ Thomas M. Sullivan_________ _/s/ S.R. Canale________________
Thomas M. Sullivan S.R. (Randy) Canale, Managing Director Labor Strategy President and Directing General Chairman International Association of Machinists
And Aerospace Workers – District 141

ATTACHMENT A

How Many Will Be Able To Participate in “Early Out” in Local 1782?

Early Out fax Application (SkyNet sign on required)

Early Out Bid Deadline: 07/25/08

Questions? Call 847-700-3172 or (toll-free) 877-242-0075

SkyNet Online Form (SkyNet sign on required)

For a complete table, or to assure updated information click and scroll. (SkyNet sign on required).
REV: 14JUL0