Current Status of Strike

[ramblingray]

First and foremost, I must admit that I do not belong to any union nor do I work for any airline. I own a small manufacturing company in Illinois but many of my family members belong to unions and they are constantly complaining about not only the unions, but the companies they work for. So for many years, we follow ongoing strikes and dicuss it.

anyway, with that said, I have a couple of comments and questions.

1 Do the so called Superscab and others make the same amount as the workers that walked off?

2 Do they get health insurance?

3 How many did they wind up hiring?

The reason I am asking is because I am trying to see the savings in which Northwest Airlines is saving when you compile the logistics of the replacements workers. Such as hotels, meals etc.

The other comment I needed to make is that when a company is failing or losing millions upon millions of dollars, it should be able to make cost saving measures to save itself. But why couldn't they just lay off some workers with less seniority and trim that way versus just wanted to cut people and the pay wages? It is obvious to me that it is in the best interest to me to see the company survive. This protects retirement money along with many jobs that will go away should they just close.

If the job can be done with thousands less employees, wouldn't it behoove the union to just allow the cuts to be made but keep the wages and benefits of the remaining employees in tact? Or was that not an option from NWA?

 

[finman]

First and foremost, I must admit that I do not belong to any union nor do I work for any airline. I own a small manufacturing company in Illinois but many of my family members belong to unions and they are constantly complaining about not only the unions, but the companies they work for. So for many years, we follow ongoing strikes and dicuss it.

anyway, with that said, I have a couple of comments and questions.

1 Do the so called Superscab and others make the same amount as the workers that walked off?

2 Do they get health insurance?

3 How many did they wind up hiring?

The reason I am asking is because I am trying to see the savings in which Northwest Airlines is saving when you compile the logistics of the replacements workers. Such as hotels, meals etc.

The other comment I needed to make is that when a company is failing or losing millions upon millions of dollars, it should be able to make cost saving measures to save itself. But why couldn't they just lay off some workers with less seniority and trim that way versus just wanted to cut people and the pay wages? It is obvious to me that it is in the best interest to me to see the company survive. This protects retirement money along with many jobs that will go away should they just close.

If the job can be done with thousands less employees, wouldn't it behoove the union to just allow the cuts to be made but keep the wages and benefits of the remaining employees in tact? Or was that not an option from NWA?

1. they make about 25% less than the mechanics that walked off the job. Most mechanics were at about $70K, so the new guys make about $53K (I may be a little off, but in the ballpark)
2. Yes, they get health insurance if they become permanant NWA employees
3. About 900 permanant mechanics have been hired (vs the roughly 4500 mechanics and cleaners that walked off)

There were significant upfront incremental costs ($80M)to deal with the strike and convert to the new workforce, but this is a one-time cost, and NWA is trying to lay the foundation for a profitable future. NWA will save roughly $200M per year with the new workforce and structure, so obviously those costs are made up very quickly.

NWA's original offer was to lay off about half of the workforce (which would have been the least senior people) and reduce existing wages by 25%. This also included 26 weeks of severance pay for those released. Only reducing the workforce by half and leaving the existing wages at old levels would still leave NWA in an uncompetitive situation, so both were targeted.

The union never allowed their members to vote on the original offer, and they ended up getting nothing.

 

[robbedagain]

NWA has been blowing money for the new scabs to stay at hotels eat meals, and the transport to and from work and the hotel. those costs ought to be sky high especially given the sky high fuel prices.

 

[ramblingray]

Finman,

Thank you for your reply. 2 things concern me.

1) How is 900 people doing 4500 people's jobs? Is some of the jobs being done by outsourcing? If so, what does that cost?

2) If Northwest cut 3600 jobs at 70,000 per year. That alone totals 252,000,000.00 a 25% greater than the 200,000,000.00 that they were looking for. Why then would they have to cut the existing pay another 25% as well. That would make the total savings around 267,300,000.00.

This does not even take in affect the social security matching, state unemployment and federal unemployment savings. After you factor all of this in along with workman's compensation, this move probably saved the company more than 340 million alone.

In summary, I think NWA secured more than what it needed, however if 900 people are doing the work of 4500. Something obviously is wrong. I could not afford to cut 48 of my 60 employees and still get the job done in a timely manner. What gives?

 

[FWAAA]

NWA has been blowing money for the new scabs to stay at hotels eat meals, and the transport to and from work and the hotel. those costs ought to be sky high especially given the sky high fuel prices.

Other threads have said that NW stiffed the hotels for the unpaid bills as of the date of the bankruptcy filing (as the bankruptcy law, of course, requires). More broken promises.

NW can't escape the bills post-petition, however, and those bills have got to be expensive.

 

[finman]

Finman,

Thank you for your reply. 2 things concern me.

1) How is 900 people doing 4500 people's jobs? Is some of the jobs being done by outsourcing? If so, what does that cost?

2) If Northwest cut 3600 jobs at 70,000 per year. That alone totals 252,000,000.00 a 25% greater than the 200,000,000.00 that they were looking for. Why then would they have to cut the existing pay another 25% as well. That would make the total savings around 267,300,000.00.

This does not even take in affect the social security matching, state unemployment and federal unemployment savings. After you factor all of this in along with workman's compensation, this move probably saved the company more than 340 million alone.

In summary, I think NWA secured more than what it needed, however if 900 people are doing the work of 4500. Something obviously is wrong. I could not afford to cut 48 of my 60 employees and still get the job done in a timely manner. What gives?

The work that was being done before is being done now by a mix of NWA employees and vendors. The amount we have to pay the vendors to do the non-hub work offsets the total savings you calculated above to arrive at roughly $200 million of steady state annual savings. Naturally, there won't be $200 million of savings in year 1 due to the up-front contingency and transition costs.

 

[ramblingray]

Once again, thank you for the response. Ok, it makes much clearer sense now. The numbers were not adding up before, however, when you factor in the costs spent elsewhere, it would bring the savings down to about 200 million, plus it would also explain the need to eliminate some jobs. I am still not convinced that totaled 80 percent of the jobs, but never the less I see where some would be cut.

I dont know you but you seem to work for the airline in management. How much in total savings per year has NWA tried to secure when you add in all of the unions? And where are you to date with the other unions? Are they making the nec. concessions or will there be ongoing strikes within the rest of the labor organizations?

 

[Bagbelt]

I think what you are missing is that NWA seems to be treating their employees as enemies. No other outfit, not even non-union Delta which has no contract to live up to, has attempted what they are doing. The only thing that adds up is they want no employees left outside their main hub to be left for a merger with Delta. As far as setting up a profitable future, the management at NW doesn't seem to contemplate any.

 

[robbedagain]

I think what you are missing is that NWA seems to be treating their employees as enemies. No other outfit, not even non-union Delta which has no contract to live up to, has attempted what they are doing. The only thing that adds up is they want no employees left outside their main hub to be left for a merger with Delta. As far as setting up a profitable future, the management at NW doesn't seem to contemplate any.

At Delta, they are fighting their pilots who are threatening to strike if the judge gives the airline what they want. I agree that NWA is treating their unionized employees the exact same way that USAIRWAYS treated us employees. It will get more nastier as NWA winds its way thru ch11.

 

[Bagbelt]

For NW not to consider that they allready got rid of half their mechanics for cost savings was a slap in the face before the "negotiations" even started.

 

[dc3fanatic]

For NW not to consider that they allready got rid of half their mechanics for cost savings was a slap in the face before the "negotiations" even started.

I thought the strike was officially over.

AND rate still matters, regardless of size of your force.

 

[finman]

For NW not to consider that they allready got rid of half their mechanics for cost savings was a slap in the face before the "negotiations" even started.

AMFA apparently did not understand the seriousness of the situation that NWA was faced with, and to the lengths that NWA would go in order to bring this fine company back to profitability. That was a gross miscalculation on AMFA's part, and the 2000 AMFA members that could have had jobs right now and the other 2500 other members that could have had 26 weeks of severance are the ones paying the price.

Negotiations don't have to be a "meet me half-way" deal when the other side has absolutely no leverage in the negotiations. If a company in the red can get the same quantity and quality of work done for $200 million less annually, don't you think that company has an obligation to it's creditors to figure out a way to achieve those savings? NWA is not a charitable organization or a government, so people shouldn't expect it to behave like one.

 

[finman]

Once again, thank you for the response. Ok, it makes much clearer sense now. The numbers were not adding up before, however, when you factor in the costs spent elsewhere, it would bring the savings down to about 200 million, plus it would also explain the need to eliminate some jobs. I am still not convinced that totaled 80 percent of the jobs, but never the less I see where some would be cut.

I dont know you but you seem to work for the airline in management. How much in total savings per year has NWA tried to secure when you add in all of the unions? And where are you to date with the other unions? Are they making the nec. concessions or will there be ongoing strikes within the rest of the labor organizations?

The total is about $1.4B for all work groups, including management.

The pilots and flight attendants have accepted interim pay cuts that will last through January that basically give us more time to negotiate a long-term contract. The total annual pilots contribution is expected to be about $600M, and Flight attendants about $200M.

The IAM (ground workers/reservation agents/clerical) have been asked to concede about $200M as well, and the judge has already imposed those cuts.

AMFA has already graciously given their $200M that was sought, bringing the grand total up to $1.2B. The remaining $200M to get up to the $1.4B comes from management, some smaller unions, and some changes to the benefits.

 

[NewHampshire Black Bears]

The total is about $1.4B for all work groups, including management.

The pilots and flight attendants have accepted interim pay cuts that will last through January that basically give us more time to negotiate a long-term contract. The total annual pilots contribution is expected to be about $600M, and Flight attendants about $200M.

The IAM (ground workers/reservation agents/clerical) have been asked to concede about $200M as well, and the judge has already imposed those cuts.

AMFA has already graciously given their $200M that was sought, bringing the grand total up to $1.2B. The remaining $200M to get up to the $1.4B comes from management, some smaller unions, and some changes to the benefits.

++++++++++++++++++++++++++++++++++++++++++++++++++++++++

finman, VERY INTERESTING POST !!!

If your correct(and you'll NEVER KNOW how much I hope you are), than if the "TEMP" 19% pay cut becomes Permanant, then there will be NO NEED for NW(WITH THE IAM"S HELP) to shut down smaller stations that REMAIN above 6 mainline flts. a day ! (I realize that some WILL fall BELOW 6 ML flts., than in which case the CURENT contract is set up to address that issue)

There will be NO NEED for NW (with the IAM's HELP) to pay an ESE in say BOS, LESS per hour than a ESE in DTW/MSP !!


finman, do you see where I'm coming from ???


NH/BB's

 

[Bagbelt]

I realise the co. is not santa claus. I believe in the end the ramp will hold on as well as the pilots. But to suggest that the co. ever had any intention of living with AMFA is hard to believe. Who ever heard of permenantly cutting the workforce in half on a flimsy force majure? They went through the cold war and oil shocks without pulling that. This is a customer service business and as much as price drives people in the long run without a core of people who know what they are doing, the business will fail. Why does Jetblue hire in-house? They must know something.