Labor Consessions: NWA unions fall into line on cuts to aid carrier
By John Gallagher
Detroit Free Press Business Writer
November 8, 2005
With cost-cutting labor agreements reached with four of its six unions, Northwest Airlines said Monday it hopes to soon reach similar agreements with a fifth and to win court approval for cutting wages and benefits of a sixth union.
"All of our union leaders understand the need for labor cost reductions," Doug Steenland, Northwest's president and CEO, said in a statement. Recent agreements with the Air Line Pilots Association and the Professional Flight Attendants Association "will provide additional time to reach final agreements while providing Northwest Airlines with the immediate costs savings that it requires."
As reported last week, the ALPA Master Executive Council agreed to temporary pay and other reductions of $215 million on an annualized basis, and PFAA leaders agreed to cuts of $117 million. The ALPA agreement is subject to membership ratification. Both agreements were meant to help Northwest weather its trip through Chapter 11 bankruptcy reorganization.
Northwest also confirmed Monday that it has reached tentative agreements on permanent wage and benefit reductions with two smaller unions, the Aircraft Technical Support Association (ATSA) and the Northwest Airlines Meteorology Association (NAMA).
That leaves two unions to go: The Transport Workers Union of America (TWU), which represents Northwest's dispatchers, and the 14,000-member International Association of Machinists, which represents ramp workers, ticket agents and other ground workers.
A seventh union, the Aircraft Mechanics Fraternal Association, has been on strike against Northwest since mid-August.
Steenland said it hopes to reach agreement soon with the TWU. But having failed to reach agreement with the IAM, Northwest has filed a motion with the bankruptcy court seeking temporary wage and benefit reductions of $114 million from that union. A hearing is tentatively set for Nov. 16 in New York.
Of the labor agreements reached so far, Steenland commented, "These new contracts, along with salaried and management pay cuts implemented last December and also planned for next month, as well as labor cost savings achieved through our new aircraft maintenance program, are key steps in Northwest's efforts to achieve a competitive labor cost structure."
