Catherwood LibraryILR School

In the latest conflict between United Airlines' nebulous financial recovery plan and the interests of its employees (see WIT for Jan. 9, 2003), United management is attempting to put a cap on the sale of the remaining shares of United stock in the employee stock ownership plan (ESOP) even as it refuses to reveal information on its finances to the plan's trustee. Originating during a previous period of fiscal distress at the now bankrupt carrier, the ESOP was part of a deal in which workers at United made wage concessions in return for ownership of fifty-five percent of United's stock---a deal that cost workers dearly as United's stock has plummeted, prompting a sell off of much of the ESOP shares last year. Now, as the trustee of the plan seeks to protect the workers from further loss by selling off the remaining 28 percent of United shares, totaling 32.5 million, that it holds for them, the airline has sought to prevent employee ownership from dropping below twenty percent in order to continue receiving a $1.4 billion a year tax benefit for employee ownership.