Mediator declares impasse at NWA


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Sep 18, 2004
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Impasse Is Declared in Northwest Talks
Wednesday July 20, 1:31 pm ET
By Joshua Freed, AP Business Writer Mediators Declare Impasse in Northwest Airlines Negotiations With Mechanics

MINNEAPOLIS (AP) -- Mediators declared an impasse in negotiations between Northwest Airlines Corp. and its mechanics on Wednesday, beginning a 30-day cooling-off period that could end with a strike. Jeff Mathews, contract coordinator for the Aircraft Mechanics Fraternal Association, said the 30-day period ends at 12:01 a.m. EDT on Aug. 20. After that, federal labor law says mechanics can strike or Northwest can impose new wage rules. Northwest, the nation's fourth-largest airline, has pledged to keep flying if there's a strike.

Talks are widely expected to resume as the deadline draws closer, although Mathews said no dates have been set. Northwest also said in a statement that it expects talks to continue. But even if they make a deal, the uncertainty could hurt bookings at Northwest during the busy summer flying season.

A strike could also be avoided if President Bush appoints an emergency board, as he did in the spring of 2001 when Northwest's mechanics were poised to strike. At the time, Bush said he was concerned about the effects that Northwest's shutdown would have on the national economy. The mechanics and the airline reached a deal soon after.

Mechanics authorized a strike with 92 percent of the vote on Tuesday.

Northwest, squeezed by rising fuel prices, competition from low-cost carriers, growing pension obligations and looming debt payments, is seeking $1.1 billion in annual labor cost savings. The airline lost $458 million during its most recently reported quarter

The company wants $176 million in annual savings from mechanics, or about a 25 percent pay cut. AMFA has offered temporary pay cuts it says would save $143.5 million. Northwest disputes that, though, saying the union offer is really worth only $87 million a year because it includes money saved from earlier layoffs.

Northwest has gotten $300 million from pilots and managers, and is seeking $148 million from flight attendants, according to their union. Northwest shares rose 14 cents to $4.77 in early afternoon trading on the Nasdaq Stock Market.