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cfm56-7b

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Northwest Pilots Have Most to Lose
Friday September 2, 5:17 pm ET
By Joshua Freed, AP Business Writer

Northwest Pilots Have the Most to Lose if Airline Goes Bankrupt, Dumps Its Pensions.

Should have supported other uinions.
 
Finally, an airline union that gets it...


Posted on Fri, Sep. 02, 2005
NWA pilots to talk cuts


Union says negotiated deal beats insolvency
[size=-1]BY MARTIN J. MOYLAN[/size]

[size=-1]Pioneer Press[/size]

Northwest Airlines' pilots have decided to talk with the struggling carrier about a second round of wage and other givebacks, hoping to keep the airline from filing bankruptcy — which they figure could be just weeks away.

"Northwest is running out of time," said Mark McClain, chairman of the executive council of the Air Line Pilots Association at Northwest. "New labor agreements will be in place this fall — either voluntarily or through the bankruptcy court. We think we can fare better through voluntary negotiations than by having an agreement mandated by a bankruptcy judge."

He expects bargaining will begin next week.

Meanwhile, Northwest continues to try to cut giveback deals with its flight attendants and ground workers. Talks with the airline's striking mechanics and cleaners are in limbo. Northwest has brought in replacement workers to do strikers' jobs.

Eagan-based Northwest is far short of its goal of extracting $1.1 billion in annual wage and other labor-cost givebacks from its employees. The airline has just $265 million from its pilots and $35 million from managers and other salaried employees.

Of late, the carrier has been losing $4 million a day. Since the start of 2001, it has lost about $3 billion on its operations.

Its free cash is down to about $1.7 billion. And on Thursday, Northwest said it expects its 2005 fuel bill, excluding taxes, will hit $3.3 billion. That's a $1.1 billion jump over 2004.

Northwest also says that Hurricane Katrina may lead to fuel shortages because of the damage it did to drilling platforms, refineries and pipelines.

That's not the end of the airline's woes.

Its pensions are underfunded by $3.8 billion. And next month, corporate bankruptcy laws change, making the process much less palatable for companies. Firms will be pushed to work their way through bankruptcy faster, and control of the process could even be wrested from management.

While McClain acknowledged Northwest must reduce its labor costs, he dismissed Northwest's roadmap for extracting some $320 million in additional annual labor savings from pilots.

And other unions must step up to take cuts, too, he insisted.

"We'll talk,'' he said. "But there is a difference between talking and reaching an agreement. We will watch what the other unions do. They will participate. The pilots will not go through a second round alone."

ALPA represents 5,200 active Northwest pilots and 500 others on furlough. Pilot pay ranges from $35,000 per year for first-year pilots to $209,000 for the most senior, although there are no first-year pilots on active status.

Northwest's so-called road map includes reductions in pilot base pay of 22.3 percent, on average, and increased flying, which could result in the loss of about 1,100 jobs.

"That is not where we need to be,'' McClain said. "We're looking at other ways to satisfy their financial concerns without destroying our contract. … We would like to get a deal but we will not do a bad deal in the interest of timeliness. It has to satisfy the concerns of our members."

Of great concern to the pilots are their pensions. If Northwest does enter bankruptcy, it likely would dump its pension obligations on the federal agency that insures pensions.

Martin J. Moylan covers airlines and can be reached at [email protected] or 651-228-5479.






GV








~
 
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They could fly for free and Northwest would still go into bankruptcy. They want to. This is a golden opportunity for management to get rid of everyone's pension. Why take pay cuts when they are going to be forced down your throat in two months.
 
FOrever85 said:
Why take pay cuts when they are going to be forced down your throat in two months.


Did you read Mark McClain's (chairman of the executive council of the Air Line Pilots Association at Northwest) statement? He clearly states why.

Muddy
 
Muddauber--I see both sides. In the '90's when TWA's MEC agreed to cuts, the company took them and left us alone.

Now, with the 1113 monster roaming freely, you never know if the agreement you signed will stand through a Ch.11 process.

I do agree that it is best to enter bankruptcy court with a signed agreement but these days it's no guarantee the company will not try to get more.TC
 
C'mon Mark! (Mark Mclain) kick some mgm't a$$! Make me proud of going out on a limb here on Flt Info to support you.
 
How far back (hire date) does the new 1,100 furloughs go back?

Truly sorry to hear this bad news.
 
Jetjockey said:
How far back (hire date) does the new 1,100 furloughs go back?

Truly sorry to hear this bad news.

Well, there are no 1100 new furloughs yet. That is just the company's proposal. I doubt the NWA MEC would agree to any deal that would furlough that many pilots unless the deal includes a Mid Atlantic type deal where the furloughs would be flying 76-110 seaters for a subsidiary. That is probably a distinct possibility at this point. Time will tell.
 
FOrever85 said:
They could fly for free and Northwest would still go into bankruptcy. They want to. This is a golden opportunity for management to get rid of everyone's pension. Why take pay cuts when they are going to be forced down your throat in two months.


If management can get most of the cuts they want (and I don't like them) without going into BK it may better to stay out of BK. BK is expensive and the cuts will then have to be deeper to account for that expense. If management figures additional cuts in BK will exceed the BK costs, they will go BK. Waiting this long to get the cuts is not a good sign.

The pilots must have decided management will either get big cuts or go BK. They are willing to deal.
 
Pension freeze negotiations have been in progress for months. Final details are discussing disability and long term sick coverage. They are excellent benefits and need time to be worked out. Current proposal would net me about 70% (44% of my FAE) of my projected benefit. A negotiated D.C. is also in the works. With Katrina and continuing fuel price increases, NWA has gone from a year to a few months if not weeks to restructure costs from everyone, not just labor, to stay out of CH-11. There isn't a single person from management on down that wants CH-11 over any other scenario. It may become impossible to avoid as DAL looks to be in Ch-11 within days and more domino's fall and with the change in the law in Oct. it just may get to the point it would be better now than later. As we have seen, slashing labor isn't the answer. Competeing against Ch-11 for 3 years was real fair, as it is the REVENUE shortage killing the industry. Our annual fuel bill right now is $2.6 BILLION higher than in 2000 with the same revenues. The profession is about gone and the glorified bus service is in full swing, student license required.
 
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