Northwest strike debate hots up

18th Aug 2006

United States Bankruptcy Court Judge Allan Gropper
today denied Northwest Airlines’ request for a preliminary
injunction to prevent a threatened strike or work action by the Association of
Flight Attendants-CWA (AFA). At the same time, the judge denied the flight attendants union’s request that Northwest be required to implement the terms and conditions of the failed July 17 tentative agreement with the AFA and he endorsed Northwest’s decision to implement the terms of its March 1 tentative agreement with the flight attendants’ former union, the Professional Flight Attendants Association (PFAA).

Commenting on the judge’s decision, Doug Steenland, Northwest president and chief executive officer, said,” While we are disappointed with Judge Gropper’s ruling and will appeal it, we remain committed to continuing to serve our customers professionally and transporting them to their destinations safely and reliably. Our customers can continue to book Northwest with confidence.”

Northwest said it will appeal Judge Gropper’s denial of the request for a preliminary injunction to the United States District Court for the Southern District of New York.

The company said that it has a range of contingency options to respond to any AFA work disruption and it will take all necessary actions to continue to operate its normal flight schedule.

Commenting on future discussions with Northwest flight attendants, Steenland added, “Northwest’s continuing goal is to reach consensual agreements with all of its unions, including AFA. Notwithstanding the current court proceedings between the two parties, we remain committed to working with AFA to reach a consensual ratified collective bargaining agreement that generates the required $195 million in annual cost savings. We believe we are on common ground with AFA and our flight attendants on this commitment.”


“We believe we also share a common interest with AFA and our flight attendants in restoring Northwest to economic good health. A strong, focused NWA will provide stable employment, meaningful careers, growth opportunities and a secure retirement for our employees. Because of our shared interest in these issues, AFA and Northwest were able to work together to bring about successful pension reform.”

Last week, Northwest asked the Bankruptcy Court to grant the preliminary injunction after AFA notified the company that it might begin work actions against the airline as early as August 15. The union later notified Northwest that it had extended the date for the start of possible work actions until August 25. The AFA notifications followed the flight attendants’ rejection of a tentative contract agreement that NWA had negotiated with AFA and that would have met the targeted $195 million in annual labor cost savings. AFA endorsed that tentative agreement and recommended that its members vote in favor of it.

As a result of the contract rejection, and in accordance with a previous decision of the Bankruptcy Court, Northwest implemented contract terms and conditions for its flight attendants that met the required $195 million of annual labor cost savings for that group.

Northwest has reached agreements on permanent wage and benefit reduction agreements with the Air Line Pilots Association (ALPA), the International Association of Machinists and Aerospace Workers (IAM), Aircraft Technical Support Association (ATSA), the Transport Workers Union of America (TWU), and the Northwest Airlines Meteorologists Association (NAMA). Two rounds of salaried and management employee pay and benefit cuts have also been instituted and the needed aircraft maintenance employee labor cost savings have been achieved, which allowed Northwest to meet its goal of achieving $1.4 billion in annual labor savings.

Since beginning its restructuring process in September of last year, Northwest has remained focused on its plan to realize $2.5 billion in annual business improvements in order to return the company to profitability on a sustained basis. The restructuring plan continues to be centered on three goals: resizing and optimization of the airline’s fleet to better serve Northwest’s markets; realizing competitive labor and non-labor costs; and restructuring and recapitalization of the airline’s balance sheet.

“In recent weeks, Northwest has reached two significant milestones which will further advance our restructuring goals: first, through a collaborative effort with Northwest Airlines employees and our union leaders, Congress passed pension legislation which the President signed, enabling Northwest to preserve its frozen defined benefit pension plans and second, we have reached our targeted labor cost savings of $1.4 billion,” Steenland concluded.



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