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Northwest Airlines, Mechanics Union Move Closer to a Strike

Posted on: Thursday, 21 July 2005, 03:00 CDT

Jul. 21--Northwest Airlines and its mechanics may finally be poised to resolve their battle over the airline's drive to slash the mechanics' wages and jobs. And that could mean a strike -- or lockout -- come late Aug. 19.

The mechanics are free to strike as of 11:01 p.m., central time, that day. And the airline, for its part, could lock them out and replace them.

The National Mediation Board on Wednesday freed both sides to go nuclear on each other if they can't reach a contract settlement within the now-running 30-day "cooling off" period.

Rank-and-file mechanics already have voted overwhelmingly to authorize their union leaders to call a strike. If they do walk out, the mechanics contend they can wreak havoc with Northwest's daily flight operations.

"Northwest thinks they can bring in bunch of replacement workers and not miss a beat?" said Steve MacFarlane, assistant national director for the Aircraft Mechanics Fraternal Association. "What happens when they have 10, 15 planes that don't make it out of Minneapolis-St. Paul on time and they miss connections. It'll have a snowball effect."

Eagan-based Northwest, which has some 450 jets in its mainline fleet, insists it has qualified replacements and third-party vendors ready to do the mechanics' work.

"Northwest customers can continue to depend on Northwest to meet their travel needs," said Andrew Roberts, executive vice president-operations at Northwest.

To compete with rivals that now employ fewer -- and cheaper -- mechanics, Northwest says it needs $176 million in labor-cost givebacks from the mechanics, including wage cuts of about 25 percent.

The mechanics union is offering concessions that it argues are worth $143 million a year. Northwest retorts that they're worth $87 million, at best.

Northwest laments it now has the highest labor costs in the airline industry. Overall, it's seeking $1.1 billion in annual wage and other givebacks from employees. But after a nearly 30-month campaign, it has pocketed just $265 million from its pilots and $35 million from management and other salaried employees.

The airline has lost about $3 billion on its operations in the past four years. And it has warned that it can't wait much longer for the labor cuts. If it doesn't get them, along with more time to make payments to its hugely underfunded pension funds, Northwest says it may file for Chapter 11 bankruptcy protection.

Northwest carries about 65 percent of the passengers whose flights originate at Minneapolis-St. Paul International Airport. From the Twin Cities, Northwest and its regional airline partners have about 550 daily flights, serving some 170 domestic and international destinations nonstop.

The airline's last strike occurred in 1998, when pilots grounded it for 15 days.

If the mechanics do strike, a key will be how much support they'd get from other unions. That's not clear at this point.

The mechanics' union wants to create as much uncertainty among the traveling public as possible, Standard & Poor's credit analyst Philip Baggaley said in a Wednesday research note.

"Flying through a strike by mechanics is more feasible than attempting to do so in the face of a pilot strike, because much of the work can be outsourced," wrote Baggaley "Still, the striking mechanics would likely seek to raise safety concerns among passengers, and the airline is at risk of losing some revenues."

Deals between airlines and their unions often are reached at the last minute, he noted. But he wrote that the "positions adopted by each side in this case appear to be less flexible than in some other negotiations."

Indeed, Northwest, given all its woes, seems to be taking a go-ahead-and-make-my-day attitude toward a strike, at least one Wall Street analyst has suggested.

Northwest doesn't seem to fear a strike, concurred John Budd, a professor of human resources at the Carlson School of Management at the University of Minnesota.

"I think at this point that Northwest prefers a strike over bankruptcy," he said.

Meanwhile, President Bush could appoint a presidential emergency board that would delay a strike. But on Wednesday the White House signaled that wouldn't happen this time.

"The National Mediation Board has found that a labor action at Northwest would not present a substantial disruption of interstate commerce. The administration does not dispute this conclusion based on current information and the president is not creating a presidential emergency board," Bush spokesman Scott McClellan said.

That news didn't surprise Budd.

"This is a minor issue politically for President Bush," he said. "He has little to gain ... especially when the primary business involved (Northwest) is presumably against it and when Wall Street would prefer that Northwest resolve its financial issues sooner rather than later."

The Associated Press contributed to this story.

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NWAC,

Source: Saint Paul Pioneer Press (St. Paul, Minn.)

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