Northwest has procured the concessions it wants from most of its biggest work groups. The pilots ratified their contract in May, and all but one tiny work group in the ground workers union have now signed off on a deal.
As far as ground workers union president Bobby De Pace is concerned, that remaining group of fifty or so technicians likely won't be a thorn in Northwest's side. De Pace says the contract ratified this week by baggage handlers and ramp workers was a hard pill to swallow, but he's glad it's down the hatch. The deal will result in 700 layoffs.
"It's not that we're relieved or anything today," De Pace says. "It's still very solemn and gloomy, because this wasn't anything we felt good about, it was something we had to do. We wanted our members to make the decision, and they did, and they'd rather make their own decision than leave it in the hands of the bankruptcy court and Northwest Airlines."
The baggage handlers had rejected an earlier deal. In a statement, the Northwest CEO Doug Steenland expressed appreciation for the "significant financial sacrifices" the union members have made and are continuing to make.
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University of Chicago bankruptcy law expert Douglas Baird says the baggage handlers made the safer bet. He says there's only so much room for the airline to negotiate, given its dire financial situation in bankruptcy.
It's not that we're relieved or anything today. It's still very solemn and gloomy, because this wasn't anything we felt good about, it was something we had to do.
"The people who are ultimately calling the shots here are not the managers but the lenders, and there is a large number of these lenders who can simply take their collateral and walk away, and so it's a situation where ultimately you don't want to overplay your hand, if you're the union," Baird says. "Ultimately you have to decide: do you want to work on these terms and conditions? But the era in which there's a large pie to be divided up, and you're just trying to figure out how large a pie your union can get -- those days are just over."
Baird says Northwest's flight attendants should bear that in mind as well. They overwhelmingly rejected a package of pay and benefit cuts earlier this week, and the company has asked the bankruptcy judge to allow it to impose a new contract. Judge Allen Gropper met with both sides today but issued no rulings.
Even though Northwest has won concessions from most of its work groups, none of those contracts takes effect until all unions have ratified give-backs.
But flight attendants union president Guy Meek says if the baggage handlers got a second run at a contract, the flight attendants should get one as well.
"We do have a right to a second chance, but the company obviously believes differently," Meek says. "And when no decision was made today, that certainly doesn't help them."
Meek says since 80 percent of flight attendants voting on the deal turned it down, the company should take that as a sign that it has to work harder to cut a reasonable deal.
The company points out, however, that the union's negotiators did sign off on the deal. And Northwest says further negotiations would likely be thwarted by interior divisions within the flight attendants union, since some members want to be represented by a different union.
Labor expert Mario Bognanno from the University of Minnesota's Carlson School of Management says Judge Gropper now faces a difficult dilemma.
"He could order Northwest and the flight attendants back to the bargaining table, but that means none of the negotiated cost reductions that have been reached will take effect until the flight attendants agreement is in effect," he says. "So all those agreements are sitting on the shelf and the airline continues to limp along."
Northwest says each month that passes without wrapping up labor concessions costs it another $30 million. However, setting aside the cost of bankruptcy, Northwest has posted a profit on its operations for two months in a row. And if the judge lets Northwest impose new terms, the flight attendants say they'll strike. Northwest says a walkout could destroy the company.
But travel expert Ed Perkins of Smartertravel.com says he doubts travelers really have too worry too much about when it comes to a walkout.
"Certainly if there is a strike by flight attendants and, particularly, if other unions honor the picket lines, Northwest would have to cut way back on its schedules, and given its financial situation, that would be a serious blow," Perkins says. "But my take is they probably will settle one way or another, just as they have with their other unions."
Perkins says summer travelers flying Northwest who absolutely must reach their destinations by a certain date might consider booking on another airline just in case there's a strike. But he says most travelers need not be greatly concerned.
Northwest has asserted repeatedly that the flight attendants do not have the legal right to strike, and the airline has requested an injunction to prevent a walk-out. The judge has scheduled a hearing on the request for next Tuesday.