MINNEAPOLIS (AP) -- Mediators offered binding arbitration to Northwest Airlines Corp. and its mechanics on Thursday, a sign that talks have broken down.
News of the offer came in a company statement, but did not say whether Northwest would participate in arbitration and a spokesman declined to elaborate. Either side can reject arbitration, which would prompt a 30-day countdown toward a strike.
If they accept arbitration, the arbitrator would hear arguments from both sides and issue a binding decision.
Aircraft Mechanics Fraternal Association contract coordinator Jeff Mathews had no immediate comment on the arbitration offer.
Both sides have said their negotiations are going nowhere, even though they agree that some cuts are necessary. Both asked mediators to release them from talks.
Eagan-based Northwest, the nation's fourth-largest carrier, is seeking $176 million in annual labor savings from mechanics. That would translate into a pay cut of roughly 25 percent, and the mechanics have said Northwest also wants to send more of their work to outside contractors.
Mechanics have offered temporary pay cuts in a package they say would save Northwest $143.5 million. But Northwest has said the mechanics' offer is really worth only $87 million because mechanics are counting funds saved from earlier layoffs.
A strike authorization vote by mechanics will end on July 19. The airline has vowed to keep flying if the mechanics strike.
The company is seeking $1.1 billion in annual labor cost savings from all its workers. It has gotten a total of $300 million from pilots and managers, and is seeking $148 million from flight attendants, according to their union.
Northwest shares rose 31 cents to close at $5 on the Nasdaq Stock Market.
