NEW YORK_Northwest Airlines Corp. does not want an outside mediator involved in its negotiations with the pilots union over concessions it says it needs to emerge from bankruptcy, even though the airline and its employees are still far apart on many issues, a consultant for the carrier testified on Wednesday.
The Eagan, Minn.-based airline, which filed for bankruptcy protection in September, is seeking $1.4 billion in annual savings from its labor unions to help it emerge from bankruptcy. Northwest asked a bankruptcy court judge last month to let it do away with collective bargaining agreements as part of its efforts to cut costs. Labor consultant Robert Brodin's testimony came on the sixth day of hearings on that request.
Brodin said that "under the right circumstances (bringing in an outside mediator) might work," but Northwest is looking to fix its cost problems as soon as possible.
Under cross examination by a pilot union attorney Thomas Ciantra, Brodin said Northwest has not decided what it will do if the court gives approval to do away with the employee contracts.
The judge overseeing the case, meanwhile, admonished Northwest, its pilots and flight attendants to come up with and agree on valuations for proposals each side is offering.
"It seems to me ... we ought to get a little closer on the valuations involved," said Judge Allan Gropper, who is overseeing Northwest's bankruptcy. Gropper said it would be useful for both sides to agree on dollar values for each side's proposals to facilitate negotiations. "I will direct the parties to see if they can't appoint someone from the negotiating side to look at the numbers to see if they can't agree ... and get closer on how they value these items."
Brodin said the company and its unions are still in disagreement over issues like sick pay, stock options for pilots when the carrier emerges from bankruptcy, and so-called "deadhead" hours, the time spent traveling to locations from where pilots are scheduled to fly aircraft. Pilots may travel halfway across the U.S. to get to the plane they are assigned to fly. The pilots union is asking for 20 percent of Northwest stock when it emerges from bankruptcy.
A major sticking point is Northwest's push to fly 76 passenger planes with non-Northwest pilots. Pilots fear that plans for the creation of a new subsidiary by Northwest management would facilitate what they see as outsourcing of pilot jobs.
But, the company noted that many of the planes will replace aircraft not being flown now by Northwest pilots. Regional carriers that have service agreements with Northwest are flying many of these planes, Brodin said.
When it comes to negotiations with its flight attendants, Northwest's Michael Becker, senior vice president human resources and labor relations, meanwhile testified the carrier cannot allow flight attendants on its board of directors because it was concerned that other unions would follow their request and it would make it tough for the company to get the financing it needs.
