Bankruptcy judge pressures NWA flight attendantsby Jeff Horwich, Minnesota Public Radio
The bankruptcy judge for Northwest Airlines has laid down an ultimatum for flight attendants: negotiate a cost-cutting contract within two weeks, or the airline can impose one unilaterally. Northwest's 9,000 flight attendants are the last major work group to be without a cost-cutting contract, having rejected a previous negotiated agreement earlier this month. The judge's ruling brings Northwest one big step closer to meeting its cost-savings target -- or facing a possible strike.
St. Paul, Minn. — In his ruling, New York bankruptcy judge Allan Gropper makes it clear his patience over nine months of labor negotiations has reached an end. The cuts Northwest needs, he writes, are "necessary," and flight attendants had no "good cause" to reject a deal their union negotiators had reached with the airline this spring.
Flight attendants overwhelmingly voted down that proposal earlier this month, leading Northwest to return to the judge and again ask permission to act on its own. This time, the judge agreed. Saying a negotiated deal is still the best outcome, Gropper stayed his order for two weeks. This will allow for talks to continue, presumably in an atmosphere of much-heightened pressure on the flight attendants.
Airline industry consultant Mike Boyd says after months of labor squabbles, it's no surprise the judge wants to get moving with the rest of Northwest's bankruptcy reorganization.
"The court clearly knows Northwest has a clear plan and has focused on it. And it'll work; the flight attandants have to come to the party," according to Boyd.
Northwest issued a statement reiterating it had bargained in good faith with flight attendants and the earlier agreement was the result of "substantial compromise" by both airline and union negotiators.
Professional Flight Attendants Association President Guy Meek says negotiators have been meeting regularly, and he expects that will continue. He says the judge has made it clear the union must satisfy the airline's goal of saving $195 million a year.
"I don't think there's ever been a problem with PFAA ever not realizing that the company was in need of some help. But the question had always been that we never believed we owed the 195 million," he said.
The union takes consolation in one major caveat in the judge's ruling: Northwest can not impose a contract any more severe than the agreement flight attendants voted down. That contract would meet Northwest's cost-savings goal by cutting take-home pay of flight attendants by as much as 40 percent and cutting up to 1,300 jobs.
Meek says the union will continue to press for more measures that target management. These include tying management raises and pensions to those of union members, and extending any executive stock awards to union members as well.
"Management continues to get their stock, their profit sharing and their golden parachutes, while employees continue under concessions and end up having hardship with finances, not being able to pay their bills, maybe losing their homes, filing bankruptcy," he said.
The union's ideas have so far gone nowhere with Northwest. U of M industrial relations professor John Remington thinks the union is wasting its energy.
"Clearly Northwest is not going to accept that sort of a condition," according to Remington. "They're going to make a determination on compensation for executive and managerial people based on what they think is appropriate under the circumstances. They're not going to negotiate that with the flight attendants."
Adding to the complexity of the situation, flight attendants are voting right now on whether to switch unions from the PFAA to the AFA, the Association of Flight Attendants. The vote result is due on Thursday. Remington says the AFA's challenge is making it harder for Northwest and the flight attendants to come to a deal.
"Both groups vying for representational rights are trying to be, or appear, as militant as possible, and this makes it really tough for them to make a concession," he said.
In more than 20 years since a major revision of bankruptcy law, no bankrupt airline has ever actually imposed terms after being given permission to do so. Just the possibility of it has been enough to force a deal. In the historic event that no deal emerges between Northwest and its flight attendants, and Northwest does impose, the union says it reserves the right to strike -- though it has promised to give Northwest 15 days notice. Those 15 days would almost surely be filled with a court battle over whether such a strike would be legal.
- Morning Edition, 06/30/2006, 7:30 a.m.