In what appears to be a bid to move past a strike by its mechanics, Northwest Airlines has told the mechanics union it will begin hiring permanent replacement workers by Tuesday unless the union agrees to deeper cuts than those that led to the walkout last month.
Mediated talks between the union and Northwest are set to resume today in Minneapolis. It could be a quick session: Northwest has told the union its financial position has worsened since the 4,400 members of the Aircraft Mechanics Fraternal Association walked off the job Aug. 19. The Eagan-based carrier's last offer included 25 percent pay cuts and layoffs of close to 2,000 workers.
"While the company was prepared to stand behind that offer in order to obtain a consensual agreement, unfortunately we are no longer able to do so," said Julie Hagen Showers, Northwest's vice president for labor relations, in a letter to the union's national director, O.V. Delle-Femine.
The company had been seeking $1.1 billion in annual labor cost cuts from its unions, but has only succeeded in getting its pilots union to sign on. Now it says it probably needs more. Fuel prices have spiked in recent weeks, and the airline expects its 2005 fuel bill to be 50 percent higher than last year.
Randy Reents, president of AMFA Local 35 in Duluth, accused the company of spending more money than ever on maintenance with replacement workers and security. Local members don't have any confidence that a positive resolution will come soon, he said.
"I think they are already set and too arrogant to make a new offer," Reents said of NWA management.
Reents said the company also has been removing equipment from the Duluth hangar recently. Strikers believe that the facility will be closed regardless of the outcome, he said.
The letter said the company is functioning smoothly using licensed managers and temporary replacement workers but needs to "adopt a permanent solution." The company's ultimatum will put a lot more pressure on striking workers to cross the picket line and reclaim their jobs. Striking mechanics have a legal right to return to any position for which they're qualified, even to replace temporary workers, the letter said.
"They'd love to get people to cross the picket line, but our members have more character and strength than that," said Jim Young, the lead negotiator for the mechanics union. "That's not going to happen." Last week, Northwest warned that it was fast running out of time -- and money -- to solve its problems without filing for Chapter 11 bankruptcy protection. Since the start of 2001, Northwest has lost about$3 billion on its operations. And lately, the carrier has been losing $4 million a day.
Many industry observers expect the airline's bankruptcy deadline will come before the middle of next month, when corporate bankruptcy laws change, making the process much less palatable for companies.
Some mechanics said they would never cross the picket line and would not return to work unless there was a negotiated settlement.
"I will not go back to work until we have a negotiated agreement through our union," said Chris Stenstrom, 42, a mechanic who lives in Webster, Minn., but last commuted to and from Detroit. "If that means losing my job with Northwest Airlines, so be it." Ronald Giovanetti, 40, of Savage, a Northwest mechanic for nearly 18 years, has been sending out resumes to railroads and other carriers such as Southwest Airlines.
"To go this soon to permanent replacements shows they are desperate," Giovanetti said. "They are desperate for qualified people, and their management team is getting worn out." Experts said the threat of permanent replacements is extreme and shows the company's desire to get rid of the union.
"They are going to present an offer that can't be accepted in bargaining," said Gary Chaison, a professor of industrial relations at Clark University in Worcester, Mass. He contends that the union's best-case scenario is for Northwest to go into bankruptcy, and then contracts and terms would be dictated by a judge, not the company.
Northwest Airlines Corp. resumed hiring permanent replacements for striking mechanics on Friday, after their union refused to put the company's latest offer to a vote.
Northwest mechanics, cleaners and custodians have been on strike since Aug. 20, although Northwest has kept flying without them.
The move marks a turning point in this strike, now in its 25th day, as the airline settles into a leaner operation.
Of the 4,400 mechanics who went on strike last month, dozens are finding new jobs.