Northwest Airlines flight attendants, who've been working under imposed terms for six months, fired two shots across the bow Friday - one at Northwest management and the second at U.S. Bankruptcy Judge Allan Gropper.
The Association of Flight Attendants (AFA) made a new contract proposal to Northwest, offering $156 million in annual labor savings. It was immediately rejected by Northwest management because it widens the gap between the two sides.
Northwest has insisted that it needs $195 million in annual savings from the attendants.
The union argued Friday that Northwest's longstanding concessionary demand is based on financial "miscalculations" and that attendants should not have to endure deep cuts over five years because the airline's financial performance has dramatically improved since Northwest first asked for lower labor costs.
AFA spokesman Ricky Thornton said that Northwest's revenue projections were too pessimistic.
Unless Northwest negotiates a "fair and equitable agreement," the union said in a prepared statement, it will have "no choice but to file a motion" to ask Gropper to reverse his decision allowing Northwest to abrogate its contract with the attendants.
In June, Gropper ruled that Northwest had shown it was a financial "necessity" for the carrier's reorganization that it obtain $195 million a year in savings from the attendants. Negotiators for the attendants reached two tentative agreements with Northwest that met the $195 million goal, but both of those proposals were rejected last year by the rank and file.
Northwest imposed work terms July 31, and a U.S. district judge issued an injunction that blocked the attendants from striking. The union is attempting to secure the right to strike through the appeals process. The 2nd Circuit Court of Appeals heard the case in late November but has not issued a ruling.
In a statement late Friday rejecting the AFA offer of $156 million, Northwest said it still needs $1.4 billion in total labor cuts from its workforce to successfully restructure in bankruptcy.
"All other NWA labor groups have ratified agreements, which provide the targeted savings amounts for each of those work groups," Northwest said.
It now appears that AFA will try to persuade Gropper that Northwest's financial projections were flawed and that the judge's earlier ruling supporting Northwest would require the attendants to accept more draconian cuts than Northwest needs.
"It will be an extremely difficult challenge for the union," said George Singer, a Minneapolis bankruptcy attorney who has followed the Northwest case. "I believe that Judge Gropper will view it for what it is - a final-hour attempt to obtain an improved [labor contract] position."
Singer said Northwest has a major incentive to resist the attendants' push for lower cost cuts: The labor agreements at Northwest are interlocking, so if Northwest backs off the $195 million in concessions for the flight attendants, it would have to make improvements for ground workers and pilots.
John Remington, a labor expert at the University of Minnesota, said the attendants are trying to shake things up because "they haven't got a lot to work with."
In addition to the court blocking their ability to strike, Remington said, the National Mediation Board has refused to declare an impasse, which would start a 30-day strike countdown. "The NMB is not going to release them [from negotiations]," Remington said. The board is "a captive of the White House," he added.
Consequently, the union is attempting to gain some leverage before Northwest moves into the final stages of bankruptcy, Remington said. The airline plans to exit from court protection by June.
Under Gropper's ruling, "the flight attendants won't have any claim" unless they reach a new deal by the end of the bankruptcy.
The clock is ticking on Northwest flight attendants if they're to get a bankruptcy claim out of contract talks.
Gropper could rule as early as next week on two key issues that the Association of Flight Attendants has brought before him.
If the board agrees that more talks are pointless, it could start a 30-day clock ticking toward a strike.