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Northwest Rejects Mechanics' Arbitration
Monday July 18, 8:16 pm ET
By Steve Karnowski, Associated Press Writer

Northwest Rejects Arbitration With Mechanics in Move That Could Lead to Strike

MINNEAPOLIS (AP) -- Northwest Airlines Corp. rejected binding arbitration with its mechanics' union on Monday, a move that could start a 30-day countdown toward a strike.

The airline said binding arbitration would take too long and would not lead to the labor cost savings it requires soon in negotiations with the Airline Mechanics Fraternal Association.

It will be up to the National Mediation Board to declare an impasse, which would start a 30-day "cooling off" period required before the mechanics could strike.

A spokeswoman for the board did not immediately return a phone call seeking comment.

"As we have consistently communicated, the company requires a minimum of $1.1 billion in total labor cost reductions -- with $176 million coming from AMFA-represented employees," Julie Hagen Showers, vice president for labor relations, wrote in a letter to the National Mediation Board. "Any process which may result in achieving less than the required savings leaves the airline at risk."

Hagen Showers said a deadline will help both sides reach an agreement.

Jeff Mathews, contract coordinator and spokesman for AMFA, said the union would have no comment Monday. A strike authorization vote by AMFA members began July 5 and was due to close at 10 a.m. EDT on Tuesday.

In a separate statement, Northwest said arbitration is not the correct course.

"The offer of binding arbitration relies on the notion that the best solution often lies somewhere between the positions of the two parties in the arbitration," the statement said. "In addition, the administrative process leading to arbitration tends to be lengthy. Northwest has no choice, it must achieve significant labor savings this year."

Eagan-based Northwest, the nation's fourth-largest carrier, says it has developed contingency plans that will allow it to fly its full schedule in the event of a strike.

While both sides have agreed that cost cuts are needed, they've also said their negotiations are deadlocked and have asked mediators to release them from the talks.

The $176 million Northwest is seeking from the mechanics would translate into a pay cut of roughly 25 percent. AMFA says Northwest also wants the right to outsource more maintenance work.

AMFA has offered temporary pay cuts it says would save $143.5 million. Northwest has countered that that offer is really worth only $87 million because it counts money saved from earlier layoffs. Northwest has gotten a total of $300 million in annual labor cost savings from its pilots and managers, and is seeking $148 million from flight attendants.
 
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