Northwest Airlines Layoff Talk: Real or a Scare Tactic?

March 18, 2005
Is Northwest Airlines sending a message to its mechanics union by publicly announcing it may lay off an additional 700 to 800 mechanics this fall? That would be on top of 130 it expects to cut next month.
Is Northwest Airlines sending a message to its mechanics union by publicly announcing it may lay off an additional 700 to 800 mechanics this fall? That would be on top of 130 it expects to cut next month.

Or is it just giving fair warning of what may be the result of historically high fuel prices and losses that have topped $2.5 billion in the past four years and show no sign of ending?

Usually, Northwest is very quiet about its actions on the labor front, leaving it to unions to air them, said John Budd, a professor of human resources at the Carlson School of Management at the University of Minnesota.

"It might reflect their (Northwest's) frustration with negotiations and they're trying to step up the pressure," he said. "On the other hand, a casual observer could say, 'United is in bankruptcy. Other airlines are in bankruptcy or struggling. What would you expect?' This seems to be consistent with what is going on in the industry."

Some union leaders contend Northwest is trying to incite fear among their ranks. "They want to scare our wives and threaten it will happen,'' mechanics union local President Ted Ludwig said.

It's not about head games, though, said Darryl Jenkins, a visiting professor at Embry-Riddle Aeronautical University in Daytona Beach, Fla., and an airline industry consultant.

"At $60 a barrel for oil, there will be a lot of layoffs in this business," he said. "Before this is over, you'll see airlines lay off a lot more than 800 mechanics. These guys (the airlines) will be bleeding a lot of money."

Northwest is in contract talks with unions for its mechanics, flight attendants and ground workers, trying to get them to share in nearly $1 billion in annual wage and other givebacks it wants from employees. Federal mediators have been pulled into negotiations with each union.

Northwest frequently updates its workers about employee givebacks at other airlines. In its statement Wednesday, it noted that Continental Airlines is warning that it will need to lay off "significant numbers" of workers, shrink its fleet and dramatically cut wages and benefits if it doesn't negotiate wage cuts with employee unions by the end of this month.

Northwest says the mechanic layoffs are connected to its plans to ground 30 planes, mostly less-fuel-efficient DC-9s that average 34 years old.

The union plans to take its battle with Northwest back to the state Capitol today. Sympathetic legislators are expected to announce heightened efforts to secure mechanics' jobs by connecting them to Northwest's push to expand Minneapolis-St. Paul International Airport, in the process claiming the airport's main Lindbergh Terminal just for itself and its airline partners.

Northwest seems to be trying to get around legislative efforts to preserve jobs at the airline, said State Sen. Satveer Chaudhary, DFL-Fridley. He's an author of a bill proposing a moratorium on a major expansion of the airport until the matter of the mechanics' jobs is closely reviewed.

"If they (Northwest) want a partnership with the state of Minnesota, that means adhering to some core Minnesota values,'' he said. "We want to retain good paying jobs in Minnesota."

The mechanics' jobs typically pay $50,000 to $70,000 a year. Since the end of 2000, Northwest has laid off some 3,700 mechanics and other maintenance workers, reducing their union's ranks to 5,600 members. Meanwhile, the airline has been outsourcing an increasing amount of its aircraft maintenance to vendors in the United States and overseas.