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Contract Talks Collapse Between Northwest and Airline's Mechanics

Posted on: Wednesday, 3 August 2005, 21:00 CDT

Aug. 4--Contract talks between Northwest Airlines and its mechanics union collapsed Wednesday, and while that may seem alarming with a strike deadline looming, labor experts say it's not surprising.

Few observers expected much progress with more than two weeks to go in the process, which most expect to go down to the wire.

But the abrupt ending of talks came with warnings from mechanics union leaders that a strike appears more likely. Northwest shares dropped nearly 9 percent, to $4.37.

Officials from the union, the Aircraft Mechanics Fraternal Association, said that Northwest refused to move away from its earlier demands for pay outs totaling about 25 percent and deep layoffs aimed at generating savings of $176 million from the group. Across all work groups, Northwest is aiming to cut its labor costs by $1.1 billion.

"We told the mediator that if Northwest Airlines is not going to engage in meaningful discussions, we are leaving, and we left," said Jeff Mathews, a spokesman for the mechanics negotiating committee.

Northwest maintained it made a number of significant offers, including job protection for 75 percent of the mechanics expected to be on the payroll on Aug. 20, a profit-sharing plan and a pension proposal "that preserves rather than terminates employee benefits."

Mechanics weren't impressed. Profit-sharing at a money-losing company is meaningless, they said. And they waved off the job protection as weak because half of the remaining 4,900 mechanics at the carrier will lose their jobs.

"If we accepted their proposal as presented, we would have lost all but the 2,450 of our members. Of those members, 75 percent would be job protected," said Steve MacFarlane, assistant national director for AMFA.

Mathews said the protection applies to individual workers, not the jobs. Once a worker leaves or retires, the job could disappear.

The two sides last met in a negotiating session at the beginning of July. The mechanics said they returned to the bargaining table this week expecting a counter proposal to an offer they made in June, which they say includes pay cuts of 16 percent.

Experts say that at this stage in the game -- with livelihoods at stake -- it is not unusual for talks to break down.

Joseph Daly, who mediates labor disputes, has seen talks break down time and time again.

"Sometimes when people are negotiating and they haven't been talking for awhile, you begin the process knowing there is going to be a breakdown after a very short time," he said. "It is a way of allowing the venting to take place, for the steam to blow."

Though the heat has been turned up, observers expect the two sides to come back to the table closer to the Aug. 19 deadline.

"I don't think we want to read a lot into it other than this is real hard ball negotiation," said John Remington, a professor of industrial relations at the Carlson School of Management. "They'll take another shot at it."

In a statement, Eagan-based Northwest said it was disappointed that the talks broke off but would be available to resume negotiations.

Mathews was doubtful. "There is no use in scheduling another negotiating session unless both parties come prepared to negotiate."

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NWAC,

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

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