Flight attendants -- will the third contract be the charm?by Martin Moylan, Minnesota Public Radio
Northwest Airlines and the union representing its flight attendants have reached yet another tentative contract deal. It's the third in the past year. The union's rank and file rejected the first two when they were put to a vote. Union leaders are reviewing the deal to decide if this one will be put to a vote.
Minneapolis, Minn. — Neither side is revealing much about the terms of the deal. But union spokesman Andy Wisbacher says the tentative agreement is the best that union negotiators could get from Northwest.
Wisbacher notes the union didn't have much leverage at the bargaining table. The courts have barred the union from striking or taking other labor actions to put pressure on Northwest.
A bankruptcy judge rejected the union's request to shrink the size of Northwest's demands. And the National Mediation Board kept the two sides at the table, refusing the union's request to start a countdown to a strike deadline.
"We've used every means through the courts, through the NMB ... We've sought out every avenue to get an agreement that our members would find acceptable," says Wisbacher. "Unfortunately, the courts have failed us. The NMB has failed us. And our negotiators had to put together the best deal they possibly could under the circumstances."
The proposed agreement provides Northwest with $195 million in annual savings. That's long been the airline's target for labor savings from its flight attendants. Last year, after the flight attendants rejected the second tentative agreement, the airline ended up imposing wage and other cuts on the flight attendants.
The second deal was rejected by about 55 percent of the flight attendants who voted. It wouldn't take much of a swing in votes to get a new contract approved. But Wisbacher isn't making any predictions about how a ratification vote could go.
"It's hard to say at this point. Ultimately, that decision lies with our members, and it would be speculative at this point to say whether they're going to vote up or down on it," says Wisbacher.
The tentative agreement gives flight attendants a $182 million bankruptcy claim against the airline. That claim could be worth $15,000 to $18,000 per flight attendant, based on the value of other claims that have been sold. That money disappears once Northwest emerges from bankruptcy, which is slated for June.
Airline analyst Darryl Jenkins says the bankruptcy claim will be powerful incentive for flight attendants to approve this proposed deal.
"I would take the settlement, sell that debt, and would not look back," says Jenkins. "The debt is the sweetener. If they don't take it, I think they will lose it entirely. So, that is a pretty big incentive."
Industry observers say Northwest would prefer to exit bankruptcy with a negotiated agreement with the flight attendants. The expectation is a bargained settlement makes for somewhat more peaceful labor relations than an imposed contract does.
But University of Minnesota labor professor John Remington says that's about the only bargaining chip the flight attendants had -- Northwest's desire to get a negotiated settlement.
"They're interested in getting the attendants signed to a ratified agreement, and they'd like to come out of bankruptcy that way. But it appears that's the only leverage the attendants have got left. They've been rebuffed every time they've turned around here," says Remington.
Union leaders say flight attendants have been hit with wage and benefits cuts amounting to about 40 percent of their compensation. The annual pay for a flight attendant now ranges from about $15,500 to $35,400.
Travel expert Terry Trippler expects it'll be hard for most flight attendants to reject the proposed settlement -- especially since it includes that bankruptcy claim and the prospect of getting something back.
"They got to do this, because it could mean $15,000 to $18,000 in their pockets. I think this one will pass," Trippler says.
The flight attendants union acknowledged earlier this week that it was feeling pressured to reach a deal with Northwest with the end of bankruptcy approaching.
The airline has negotiated or imposed contract settlements with all its unions and reduced its labor costs by $1.4 billion.
If the flight attendants ratify the latest deal, it will mean the conclusion of one of the most difficult periods in the airline's history.