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Reuters
Northwest, union resume labor talks
Thursday September 8, 1:45 pm ET
By Kyle Peterson CHICAGO (Reuters) - Labor negotiations resumed on Thursday between Northwest Airlines (NasdaqNM:NWAC - News) and the union representing 4,400 striking mechanics and maintenance workers. The talks could bring an end to the strike that began August 20. But the airline has made clear that it may soon hire its temporary workers permanently and that it may offer terms even worse to the striking workers than those in its last proposal.
The workers represented by the Aircraft Mechanics Fraternal Association walked off the job, saying the No. 4 U.S. carrier was asking the mechanics for unreasonable concessions.
The airline has continued flying using temporary workers and outside vendors. AMFA says Northwest is suffering from the strike and that the workload will overwhelm the replacement mechanics who are less familiar with Northwest's fleet.
Northwest insists its operations are smooth and that it is prepared to operate with its replacement workers indefinitely. Experts tend to agree with the airline.
"Now it's a matter of damage control for the union. They may be looking for a face-saving maneuver to rejuvenate the membership, while avoiding the permanent loss of jobs," said Joe Schwieterman, transportation expert at DePaul University.
"I suspect that debate will be more around job rules and job security, rather than hourly pay," he said.
FUEL COSTS, KATRINA PRESSURE AIRLINE
Northwest says industry conditions have worsened since the strike started because of a fuel spike resulting from Hurricane Katrina. The carrier said it may have to ask the union employees for even greater concessions.
Northwest Vice President of Labor Relations Julie Hagen Showers said in a letter on Tuesday to AMFA that the company needs to adopt a long-term solution.
"The airline must be in a position to start filling permanent vacancies by September 13," Showers said in the letter.
A Northwest representative declined on Thursday to explain the significance of that date.
AMFA said Northwest's best offer before the strike was to terminate about half of its AMFA-represented jobs and impose hefty pay cuts on the remaining workers.
Northwest has said it needs $1.1 billion in annual labor cost savings to restructure and avert bankruptcy. The carrier was seeking $176 million of that amount from mechanics.
Eagan, Minnesota-based Northwest said it may need to raise its labor cost savings target to offset fuel prices and that any agreement must accommodate the increasingly dire circumstances in the airline industry.
U.S. crude oil futures were trading at $63.65 a barrel on Thursday, down from record highs above $70.
AMFA spokesman Steve Conway said it was not clear that Northwest intended to ask for more concessions.
"It's really impossible to tell at this point," he said, adding that the two parties "are going to both go to the table to see what's what."
The striking workers are under strain and that some are seeking other jobs, he said. But in general, they are devoted to the strike.
"They're holding up really well," Conway said. "The best measure of how they're holding up is that not more than a handful have crossed the line."
Northwest, union resume labor talks
Thursday September 8, 1:45 pm ET
By Kyle Peterson CHICAGO (Reuters) - Labor negotiations resumed on Thursday between Northwest Airlines (NasdaqNM:NWAC - News) and the union representing 4,400 striking mechanics and maintenance workers. The talks could bring an end to the strike that began August 20. But the airline has made clear that it may soon hire its temporary workers permanently and that it may offer terms even worse to the striking workers than those in its last proposal.
The workers represented by the Aircraft Mechanics Fraternal Association walked off the job, saying the No. 4 U.S. carrier was asking the mechanics for unreasonable concessions.
The airline has continued flying using temporary workers and outside vendors. AMFA says Northwest is suffering from the strike and that the workload will overwhelm the replacement mechanics who are less familiar with Northwest's fleet.
Northwest insists its operations are smooth and that it is prepared to operate with its replacement workers indefinitely. Experts tend to agree with the airline.
"Now it's a matter of damage control for the union. They may be looking for a face-saving maneuver to rejuvenate the membership, while avoiding the permanent loss of jobs," said Joe Schwieterman, transportation expert at DePaul University.
"I suspect that debate will be more around job rules and job security, rather than hourly pay," he said.
FUEL COSTS, KATRINA PRESSURE AIRLINE
Northwest says industry conditions have worsened since the strike started because of a fuel spike resulting from Hurricane Katrina. The carrier said it may have to ask the union employees for even greater concessions.
Northwest Vice President of Labor Relations Julie Hagen Showers said in a letter on Tuesday to AMFA that the company needs to adopt a long-term solution.
"The airline must be in a position to start filling permanent vacancies by September 13," Showers said in the letter.
A Northwest representative declined on Thursday to explain the significance of that date.
AMFA said Northwest's best offer before the strike was to terminate about half of its AMFA-represented jobs and impose hefty pay cuts on the remaining workers.
Northwest has said it needs $1.1 billion in annual labor cost savings to restructure and avert bankruptcy. The carrier was seeking $176 million of that amount from mechanics.
Eagan, Minnesota-based Northwest said it may need to raise its labor cost savings target to offset fuel prices and that any agreement must accommodate the increasingly dire circumstances in the airline industry.
U.S. crude oil futures were trading at $63.65 a barrel on Thursday, down from record highs above $70.
AMFA spokesman Steve Conway said it was not clear that Northwest intended to ask for more concessions.
"It's really impossible to tell at this point," he said, adding that the two parties "are going to both go to the table to see what's what."
The striking workers are under strain and that some are seeking other jobs, he said. But in general, they are devoted to the strike.
"They're holding up really well," Conway said. "The best measure of how they're holding up is that not more than a handful have crossed the line."