Northwest Misses $42M in Debt Payments

Northwest Airlines Corp. said on Tuesday that it chose not to make $42 million in debt payments in recent days, suggesting the carrier is conserving its cash ahead of a potential bankruptcy filing.


Northwest's last offer before talks broke off would retain the jobs of 1,080 mechanics, down from a pre-strike union work force of about 4,400 workers. The larger figure includes some 800 cleaners whose jobs, Northwest says, have already been permanently shifted to contractors.

Northwest mechanics averaged about $70,000 a year in pay before the strike. The airline had been seeking pay cuts of about 25 percent before the walkout, but since then they have raised an overall concessions target to $203 million from $176 million.

Union officials have said only a handful of mechanics have crossed the picket line and sought to portray Northwest as growing desperate.

"Northwest is naive to think that substantial numbers of AMFA members will cross the lines to save management's bacon," AMFA's national director, O.V. Delle-Femine, said in a prepared statement. "That's not going to happen."

John Remington, a labor relations professor at the University of Minnesota, said it was hard to gauge how a Chapter 11 filing would affect the standoff with mechanics.

"Filing for bankruptcy doesn't make this one go away," Remington said. "It may make it less urgent to deal with, but the fact of the matter is these guys are still on strike, and they're still hurting Northwest's business to some extent."

Union officials had said Sunday that only differences over severance and work rules remained. But Rich Nygaard, a negotiator at Tuesday's rally, also said Northwest was seeking a five-year contract that would have run through 2011 with no raises; Nygaard said the union wanted a three-year deal with two raises.

AMFA members got a financial boost Tuesday from the United Auto Workers, which donated $880,000 _ or about $200 for each striking AMFA member.

"Northwest Airlines' behavior toward AMFA is blatant union-busting and an insult to every American worker," UAW President Ron Gettelfinger said in a statement announcing the donation. "The UAW is proud to offer this support to AMFA members."

Bob Rose, president of the AMFA local in Detroit, said the money would be distributed by the local to striking AMFA members nationwide.

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Joshua Freed can be reached at jfreed(at)ap.org



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