The union representing Northwest Airlines' mechanics says it is preparing for "what looks like an inevitable strike" over the carrier's drive to cut members' wages and jobs.
The dominant airline at Metro Airport, which has lost about $3 billion on its operations since the start of 2001, says it needs the cuts to help stop its losses and compete with United Airlines and other rivals that have extracted big-time concessions from their workers.
Last week, Northwest asked the National Mediation Board to declare its contract negotiations with the mechanics union are at a dead-end. If the board concurs, there could be a strike or lockout after a 30-day cooling-off period.
Northwest already has recruited about 400 replacement mechanics, said Ted Ludwig, president of Local 33 of the Aircraft Mechanics Fraternal Association. And the union has scheduled strike preparedness meetings for next week, along with informational picketing at the airport.
"While it is not the intention of AMFA to strike NWA, it is beginning to look like this is the path that Northwest Airlines has chosen," the strike committee for Local 33 said in a posting on the union's Web site Wednesday. "We will be asking for the help of each and every member, as we move ... toward what looks like an inevitable strike."
Maybe. Again and again, Northwest's peers and their unions have reached settlements as a strike, bankruptcy filing, court-imposed settlement or other event loomed.
On Tuesday, United dodged potentially crippling strikes by two unions, AMFA and the International Association of Machinists, as it reached agreements that could help it leave bankruptcy protection and emerge as a more efficient, viable carrier. Both unions had threatened to strike if a bankruptcy court judge, in the absence of voluntary givebacks, had thrown out current union contracts. That could have allowed United to impose its own terms.
AMFA has not yet responded to Northwest's request for a mediation board declaration of an impasse. The union's reply is due next Wednesday.
There's no hard deadline for the board to rule on Northwest's petition. The board could reject the initial request and approve a later one.
Union negotiator Jeff Mathews wouldn't say Wednesday if AMFA would oppose or support an impasse ruling. But AMFA's national headquarters in New Hampshire is directing 13 locals with Northwest members to ready themselves for a strike, he said.
Northwest's push for big labor givebacks is in its third year. Its current target is $1.1 billion in annual savings. But the airline has only $300 million in hand, mostly from its pilots.
At this point, the airline's focus is on the mechanics.
Northwest, according to AMFA, is seeking to lay off about 2,000 mechanics -- on top of the about 4,400 already let go or scheduled for layoff in the next few months. It wants to send more aircraft maintenance work to outside vendors in the United States and overseas.
The airline also wants the 2,450 or so mechanics and cleaners who would remain on its payroll to take wage cuts of about 25% and accept other givebacks.
Mechanics generally make $50,000 to $70,000 a year.
Saying Northwest is taking too long to cut worker pay while fuel costs remain high, Fitch Ratings downgraded Northwest's debt Wednesday.
Northwest had $2.1 billion in unrestricted cash as of March 31. So a bankruptcy filing is not imminent, Fitch analyst Bill Warlick said. But with losses of $458 million in its last quarter, Northwest is continuing to dip into that cash.
Fuel prices in the first quarter were 40 percent -- $180 million -- higher than in the same period last year, Warlick said. Fitch estimated that Northwest could spend as much as $900 million more on fuel for the full year.
"Even with labor concessions baked in, the company's going to face a difficult road with fuel remaining at these levels," he said.
Union representing Northwest mechanics says it is preparing for strike over the carrier's drive to cut member's wages and jobs.
Northwest mechanics may have the stomach for a strike against the airline. But do they have the wallets? One Wall Street analyst has doubts.
The union representing Northwest Airlines' mechanics and cleaners is seeking a go-ahead from federal mediators to strike the carrier.
Fitch Ratings downgraded Northwest Airlines Corp. debt on Wednesday, saying the nation's fourth-largest airline is taking too long to cut worker pay while fuel costs remain high.