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NWA Union Split on Pay Cuts -- Airline Will Go Back to Court After Bag Handlers Veto Offer

Posted on: Thursday, 9 March 2006, 09:00 CST

By Jane Roberts robertsj@commercialappealcom

Northwest Airlines' largest union delivered a split vote Tuesday on cuts that would have saved the company $190 million a year.

The carrier's nearly 7,000 ticketing agents agreed to accept the proposed 11.5 percent pay cut. But its 5,600 luggage handlers vetoed the offer, saying they could not stomach a proposal that would make many jobs part time.

"The plan was to make 50 percent of the ramp jobs in Memphis part time," said Sam Ellis, head of the local IAM. "In Minneapolis and Detroit, 25 percent of the jobs would have gone part time."

While Northwest said it was disappointed in the outcome, it now plans to seek permanent concessions in bankruptcy court.

In November, the court ordered a temporary 19 percent cut for the workers. While the latest proposal would have restored some pay, luggage handles said the cost in health care benefits and jobs was too high.

"The anger and frustration among all employee groups at Northwest Airlines was evident throughout the voting process," said District 143 president Bobby De Pace. "In the end, Northwest management failed to convince a majority of the workforce that the proposal was appropriate or that they could be trusted to honor their commitments." Northwest did not comment.

In January, the IAM said members would vote on the 11.5 percent pay cut plus changes that would allow Northwest to use more part- time workers.

The proposal scaled back Northwest's outsourcing proposals and shifted the airline's pension plan for IAM workers to the union's plan.

Union leaders said the IAM saved 649 of 733 jobs Northwest wanted to outsource and kept 82 percent of its jobs overall.

But the IAM is still embittered by an employee stock buyout that members believe saved the carrier from bankruptcy in 1993.

Under the agreement, Northwest had 10 years to buy the shares back from the IAM Trust.

When it failed to do so, the IAM took the issue to court and won.

"But then, with the bankruptcy, everything changed," Ellis said. "I would hope the ramp workers would continue to negotiate. But in bankruptcy, these are not normal times. It's hard to say what is going to happen."

Northwest employs about 600 IAM workers in Memphis. About 400 handle luggage.

Also Tuesday, Judge Allan Gropper, who is overseeing Northwest's bankruptcy case in New York, ruled that attorneys, bankers and consultants in the case will have to wait for some of the nearly $15 million in fees they seek for 3 1/2 months of work.

Gropper said he was holding back 20 percent of the fees for a future date. The U.S. Trustee's office, which works with the judge to oversee the bankruptcy process, had sought the delay, saying it would be an incentive for a successful resolution of Northwest's bankruptcy.

Meanwhile, the carrier was given until May 1 to provide extensive details of its assets and liabilities. Northwest had asked to be given until June 1 to do so. This detail will provide a better look at company's financial health.

- Jane Roberts: 529-2512

Source: Commercial Appeal, The

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