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Northwest Keeps Fleet in the Air Striking Union Claims Troubles Camouflaged

Posted on: Tuesday, 23 August 2005, 09:00 CDT

Northwest Airlines on Monday weathered the biggest test yet of its ability to operate despite a strike by mechanics, whose union stepped up charges that Northwest was camouflaging its problems.

Standard & Poor's Ratings Services, meanwhile, placed Northwest onCreditWatch with negative implications, meaning its debt could be downgraded. The agency said that it was concerned that the airline would not be able to quickly obtain the cost cuts it is seeking from its unions.

Northwest was struck by the Aircraft Mechanics Fraternal Association early Saturday over the company's demand for job cuts and $176 million in wage and benefit concessions.

The cuts are part of $1.1 billion in total savings that Northwest is asking union members to grant. Otherwise, the airline has warned it could seek Chapter 11 bankruptcy protection.

Despite the walkout, the first against a major airline since a strike by Northwest's pilots in 1998, the airline kept operating, using 1,500 temporary workers and contractors to replace members of the mechanics union. That cheered Wall Street, where analysts last week said they were rooting for a strike to occur. Northwest's shares climbed 31 cents, or 5.76 percent, to close at $5.69 on Monday

The replacement workers, most of them licensed mechanics, were hired under an extensive contingency plan drafted by Northwest over the past 18 months at a cost of $107 million

Along with replacing members of the mechanics union, Northwest redesigned the way it services and maintains its planes, so that it requires 2,000 fewer workers. Northwest's pilots, flight attendants, and other workers did not honor AMFA's picket lines.

Monday marked a return to Northwest's full weekday schedule, after two days of relatively light weekend flights. But little disruption was reported at its major airports, including its hubs in Detroit, Minneapolis and Memphis. Northwest switched to its less- busy autumn schedule on Saturday, a week earlier than usual.

Some delays were reported by the airline, which canceled 99 flights on Saturday and Sunday, according to the union.

The union, however, contended on its Web site that the airline's performance was much worse. It said reports of business as usual were "intended to break our spirit, and mislead the public."

AMFA added that it was receiving support from other union members in both "overt and covert ways."

The plan to use temporary workers in place of striking AMFA members took 18 months to create, company executives said, with extensive analysis at each of its airports. It also required the cooperation of other unions, the U.S. government and even the White House.

The strategy passed its initial test over a light weekend of flights.

"It appears that the preparations have paid off," Raymond Neidl, an airline industry analyst at Calyon Securities, said in a research note.

Union members argued that the airline would see mechanical problems mount as the week progressed.

"There's just so many little things that will start compiling before it becomes epidemic," said Kevin Opuda, a striking mechanic who has been with the airline for 18 years.

But one labor specialist said Northwest's ability to switch to new work routines and keep operating, at least at the outset, sent an important signal that strikes may have lost their power as tools to fight job losses and other cuts.

"This gives all of the opportunities now to the companies and to the replacement workers, and it makes it very, very grim for strikers," said David Gregory, a labor law professor at St. John's University in New York.

As relations with the mechanics' union deteriorated, Northwest developed two goals, executives said. Along with staying in the air, it wanted to cut costs by eliminating jobs and embracing maintenance systems used by JetBlue Airways and other low-fare carriers.

Over the past 18 months, the airline analyzed every job represented by the mechanics' union at every airport and calculated the skills required to fix each of its planes. It then decided how many of those workers it actually needed and what kind of replacements it would require in the event of a strike.

Northwest also began an effort in Washington to persuade officials that its plan would work, people involved in the discussions said. Its management assured the Bush administration that it did not want the president to convene a Presidential Emergency Board, which could order workers back to their jobs in case of a strike, as outlined in the Railway Labor Act. Instead, the airline said, it wanted the chance to carry out its plan.

Last week, White House officials said that President George W. Bush did not plan to intervene, because the strike did not threaten to disrupt the national transportation system. Meanwhile, airline executives met numerous times with officials at the Transportation Department and the Federal Aviation Administration, walking them through the airline's training procedures and assuring them that its planes and mechanics would meet all U.S. standards.

Northwest had also hired replacement flight attendants in case their union, which is aligned with the mechanics' union, walked out. But once the strike began, Northwest's unions said they would stay on the job, as they are legally required to do.

***

Jeremy W. Peters contributed reporting for this article.

Source: International Herald Tribune

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