United Airlines' mechanics will vote Thursday on a revised wage-cut deal crucial to the carrier's effort to avoid bankruptcy, their union said. A spokesman for the carrier said the two sides reached a tentative agreement on givebacks early Monday, but declined to give details. The mechanics, who first rejected a reduction in pay, are the only holdouts on a goal of $5.2 billion in givebacks by unionized employees that UAL Corp., United's parent, hopes will secure a $1.8 billion federal loan guarantee. As the Monitor went to press, United was facing a deadline for a $375 million debt payment that would further deplete cash reserves estimated to be down to $1 billion. (Story, page 1.)
Hopes grew for the success of a rescue for struggling German cellphone service provider MobilCom after its one-time partner, France Telecom, signed an agreement to buy $6 billion in debt from the former's creditor banks and vendors. The move comes despite France Telecom's own staggering $69 billion debt; its tradeoff will be bonds that are redeemable for new shares and the right to 90 percent of the proceeds from any sale of MobilCom assets. MobilCom, which also won a $391 million temporary bailout from the German government one week before September's national election there, has long been teetering on the brink of bankruptcy. France Telecom's action is expected to trigger hundreds of millions of dollars in new loans and credit from MobilCom's banks to finance a restructuring plan.
In another sign that it's moving toward a takeover, BNP Paribas, the largest bank in France, bought another 5.3 percent stake in rival Crédit Lyonnais. Terms of the deal weren't announced, but it comes only a week after BNP Paribas paid $2.2 billion for the 10.9 percent stake in Crédit Lyonnais that had been owned by the French government. Analysts said the latest transaction sets up a likely confrontation for control of Crédit Lyonnais with France's No. 2 bank, Crédit Agricole. Under French law, an institutional investor must offer takeover terms when its stake in another company reaches 33 percent.