Northwest Airlines Corporation today announced that its International Association of Machinists and Aerospace Workers (IAM)-represented equipment service and stock clerk employees ratified a new contract. Sixty-two percent of the ground employees voting ratified the agreement.
We recognize and appreciate the significant financial sacrifices that our IAM employees and their families have made and are continuing to make to help Northwest restructure successfully, said Doug Steenland, Northwest Airlines president and chief executive officer.
In light of these sacrifices, we are pleased that this agreement provides opportunities for IAM employees to share in Northwest's success going forward, he added.
In March, IAM-represented customer service, reservations and office employees ratified a new contract. The ratified IAM agreements include $190 million in labor cost savings toward the airlines requirement to reduce its annual labor costs by $1.4 billion.
To date, in addition to the IAM, Northwest has reached ratified agreements on permanent wage and benefit reduction agreements with the Air Line Pilots Association (ALPA), Aircraft Technical Support Association (ATSA), the Transport Workers Union of America (TWU), and the Northwest Airlines Meteorologists Association (NAMA). Two rounds of salaried and management employee pay and benefit cuts have also been implemented and the needed aircraft maintenance employee labor cost savings has been achieved.
Northwest said Tuesday that it asked the U.S. Bankruptcy Court for the Southern District of New York to rule on the companys Section 1113(c) motion to reject the existing flight attendant labor agreement and permit Northwest to impose new contract terms after that group rejected its tentative agreement with the airline.
Since beginning its restructuring process in September of last year, Northwest has remained focused on its plan to realize $2.5 billion in annual business improvements in order to return the company to profitability on a sustained basis. The restructuring plan continues to be centered on three goals: resizing and optimization of the airline's fleet to better serve Northwest's markets; realizing competitive labor and non-labor costs; and restructuring and recapitalization of the airline's balance sheet.
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The agreement includes $358 million in labor and benefit cost savings
Northwest expects that flight attendants will complete their contract ratification vote on this tentative agreement on July 31.
Union leaders say the airline has made no move to reopen talks after a contract offer was turned down by IAM members.