http://www.freep.com/apps/pbcs.dll/article?AID=/20060303/NEWS99/60303018
Northwest Airlines, pilots reach deal
March 3, 2006
By JEWEL GOPWANI and JUSTIN HYDE
FREE PRESS STAFF WRITERS
Northwest Airlines reached a crucial cost-cutting deal with its pilots at about noon Friday, relieving travelers and employees by averting a strike that could have shut down the carrier and crippled Detroit Metro Airport.
The pilots reported the tentative deal in a message to members on its Web site Friday afternoon.
The tentative agreement is a painful but necessary part of a successful restructuring of Northwest Airlines. If all of us can distance ourselves from these recent labor struggles and focus on ensuring the future success of Northwest we can begin looking forward to our emergence from bankruptcy as a proud and profitable airline, said Mark McClain, chairman of the Northwest unit of the Air Line Pilots Association.
The union said the accord will be presented to union leaders this evening. Members must ratify the tentative pact before it comes official.
The deal means U.S. Bankruptcy Court Judge Allan Gropper will not have to decide whether to throw out the airlines union contracts and allow Northwest to implement lower wages and new work rules.
The pilots had voted to strike if that happened.
The pilots union said it would not release details about the deal until union leaders can review it. Northwest had been seeking $361 million in annual cuts and has repeatedly said that it was flexible in how that target would be reached. The pilots gave up 15% of their pay in 2004. The airline sought another 28.4% pay cut from its 5,000 pilots during talks in October. The pilots agreed to take most of that in a temporary 24% pay cut in November to keep talks going and postpone a trial to void the airlines contracts.
Pivotal issues to the pilots talks included:
-Stemming pay cuts. Pilots have taken two pay cuts, totaling 39%, since 2004.
-Matching contributions to their retirement plan. Pilots had allowed their pension plan to be frozen in 2005.
- Acquiring an ownership stake in a reorganized Northwest.
-Protecting jobs if the airline is sold or merges with another carrier.
-Outsourcing jobs to a new Northwest subsidiary or a commuter carrier
The pilots deal comes after another milestone in Northwests talks this week. The airline and its flight attendants Wednesday wrapped up a deal that saves the carrier $195 million a year.
Contact Jewel Gopwani at 313-223-4550 or
[email protected]