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Mechanics Authorize Strike -- Northwest Seeks $176 Million in Cuts; Bankruptcy Possible

Posted on: Thursday, 21 July 2005, 09:00 CDT

Northwest Airlines Corp. mechanics voted Tuesday to authorize a strike if labor contract negotiations with the airline can't be settled.

A day after Northwest declined arbitration, 92.4 percent of mechanics voted to allow the 5,000-member union to strike if an agreement isn't reached.

"Now we are free to continue our negotiations and have a strike if need be," said Steve MacFarlane, assistant national director of Aircraft Mechanics Fraternal Association.

Before the mechanics can go on strike, the National Mediation Board must release the two sides from talks. Both the union and airline management have requested the move.

That would trigger a 30-day cooling off period, after which, the mechanics could strike.

The potential strike is another problem for the struggling airline, which continues to get squeezed by rising fuel prices, competition from low-cost carriers, growing pension obligations and looming debt payments.

Company officials have said that bankruptcy is possible if it doesn't get $1.1 billion in annual labor cost savings from all of its workers.

It has been successful in getting $300 million from pilots and managers, and it is seeking $148 million from flight attendants, according to their union.

The airline wants $176 million from its mechanics, or about a 25 percent pay cut.

AMFA has offered temporary pay cuts it says would save $143.5 million. However, Northwest says the union offer is really worth only $87 million because it includes money saved from earlier layoffs.

The Northwest offer would reduce mechanics from 5,000 to 2,400, besides the pay cut, which is "one of the real critical issues," MacFarlane said.

In response to the vote, Northwest released a statement that said it still hoped to reach a consensual agreement with the mechanics' union, but was prepared to fly a full schedule if there was a strike.

Northwest officials said flights would not be affected because the company will "expand vendor relationships."

Memphis International Airport doesn't expect any setbacks for passengers if a strike occurs.

"Our expectation is that even if the union goes on strike, Northwest will continue all its flights in and out of all hubs, including Memphis," said Arnold Perl, airport authority chairman.

Local mechanics were pleased with the amount of support for a possible strike, said James Bergstrom, attorney for local chapter of mechanics representing 300 workers, including 135 in Memphis.

John Fossum, a professor at the University of Minnesota's Carlson School of Management, said the airline would get its labor concessions either through negotiations or through a bankruptcy filing.

"They have got to get their cost structure down, period," he said. "They are going to get those concessions, either through the bargaining process or through Chapter 11."

Stock in Eagan, Minn.-based Northwest, the nation's fourth- largest carrier, fell 4 cents to close at $4.63 Tuesday on the Nasdaq.

- Stanley Dunlap; 529-2351. The Associated Press contributed to this story.

Source: Commercial Appeal, The

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