Mechanics strike but Northwest Air aloft

08/20/2005

CHICAGO (Reuters) - Mechanics and other maintenance workers at Northwest Airlines (NWAC) walked off the job on Saturday after labor talks failed to produce a deal to help the carrier cut costs and avert possible bankruptcy.

Northwest Airlines, which flies some 177,000 passengers daily and is particularly strong in the Midwest, said it has continued operations by replacing about 4,400 striking employees with 1,500 temporary workers and outside vendors.

The striking Aircraft Mechanics Fraternal Association (AMFA) said the first U.S. airline strike since 2001 would cause delays eventually, but Northwest reported no strike-related disruptions.

“The implementation of the plan went as scheduled, the airline is running well. It’s business as usual at Northwest today,” Northwest Chief Executive Doug Steenland told Reuters.

The plan will allow the airline to operate reliably for the “foreseeable future,” Steenland said.

An airline official acknowledged earlier, however, that Northwest has suspended its daily on-time performance report.

The airline, which has hub airports in Detroit and Minnesota/St. Paul, also flies 200 nonstop flights to Asia weekly, among other world destinations.

The strike began just after midnight EDT Friday (0400 GMT) at the end of a 30-day “cooling off” period. The two parties were released from federal mediation in July, setting the stage for Saturday’s walkout.

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.

The union said the airline’s best proposal would have cut more than half the AMFA jobs and imposed hefty pay cuts for remaining workers. The labor group said its final counteroffer would have met the cost-cutting target and preserved jobs.

“Our last offer to the AMFA-represented employees was in our judgment a fair and reasonable one, given the challenges that we face,” Steenland said. “Like any of the legacy airlines out there, we need to restructure our business.”

HUNTING FOR CRACKS IN AIRLINE ARMOR

Northwest’s final proposal offered mechanics a maximum wage of $27.17 an hour. The replacement workers get $26.53 an hour.

Saturday’s walkout is the first U.S airline strike since 2001, when pilots at Delta Air Lines (DAL) subsidiary Comair stopped work for three months. Northwest’s last labor strike was in 1998.

The entire airline industry has been grappling with soaring fuel prices and low-cost competition. Two top airlines, United Airlines (UALAQ) and US Airways (UAIRQ), are in bankruptcy protection, and other large carriers have asked their employees for concessions.

The Federal Aviation Administration has deployed extra inspectors to Northwest hubs and other airports where it operates to oversee replacement workers.

AMFA is betting the replacement workers will not have the skill level of the striking mechanics and that flight delays and cancellations will increase over the next few days.

“AMFA technicians who average 20 years of live experience on Northwest’s fleet are being replaced by 1,500 people who in many cases have little or no live experience on the type of aircraft Northwest flies” O.V. Delle-Femine, the union’s national director, said in a statement.

Early on Saturday, mechanics picketed at the Lindbergh Terminal at the Minneapolis/St. Paul International Airport, and mechanics stood at each entrance handing out leaflets.

At Detroit Metropolitan Airport, a Northwest hub, strikers handed out leaflets asking: “Would you fly an aircraft piloted by an unlicensed captain? Why would you fly an aircraft maintained by unlicensed technicians?”

Northwest said its replacement employees have the same qualifications as the AMFA members.

Bob Rose, president of AMFA local 5 in Romulus, Michigan, told local radio that Northwest could not replace the skill level of the striking workers.

“We have the oldest fleet in the industry, and we know what it takes to keep these planes in the air,” Rose said. “It’s just a matter of time before these planes start breaking.”

Analysts said it remains to be seen whether Northwest’s contingency plan has cracks.

“If the situation runs smoothly for the next three or four days, there may be no incentive for the company to end the strike,” said airline analyst Michael Boyd. “If it doesn’t run smoothly, they might be back at the table at some point.”