Northwest lives up to tough image: experts
Thursday August 24, 12:28 pm ET
By Kyle Peterson
CHICAGO (Reuters) - Northwest Airlines (Other OTC:NWACQ.PK - News), facing a potentially devastating flight attendants' strike on Friday, is living up to its reputation as an unflinching, no-nonsense labor negotiator, experts said.
With a threatened job action looming, the airline is standing tough and not retreating from a decision last month to void the workers' contract to reach a cost savings goal.
Some say Northwest's tack against the Association of Flight Attendants (AFA) has become increasingly common as airlines balance their desire for good employee relations against their need to pinch every penny.
"The last several years have pushed (industry) labor relations into a new frontier," said Joe Schwieterman, transportation expert at DePaul University. "Both sides are playing hardball tactics."
Top U.S. carriers have been forced to exact worker concessions to offset the pressures of low-fare competition and soaring fuel costs.
Northwest, which entered bankruptcy in September, last month terminated its flight attendants' contract and imposed terms that save the carrier $195 million a year.
Although the airline had court permission, the AFA said the action triggered its right to strike. The union has demanded that Northwest negotiate a contract that members will ratify.
Barring government interference, the union could strike as early as 9:01 p.m. CT on Friday. The airline has said a strike could erode bookings and ultimately ruin the carrier.
Bob Brodin, a retired senior vice president in charge of labor relations at Northwest, said the carrier is no tougher in negotiations than it has to be in a troubled industry.
"Northwest has over the years had some difficult negotiations with its unions," Brodin said. "I think it's true of most airlines."
The industry is rife with examples of stormy relations. UAL Corp. (NASDAQ:UAUA - News), parent of United Airlines, demanded two pay cuts during a three-year stint in bankruptcy that ended last year. The carrier achieved the savings through negotiations but came to the brink of a flight attendants' strike.
Earlier this year, bankrupt Delta Air Lines (Other OTC
ALRQ.PK - News), negotiated a labor contract with its pilots in the shadow of a strike threat.
STRAINED LABOR RELATIONS
Northwest is no stranger to union showdowns. It has faced four strikes since industry deregulation in 1978, according to data from the National Mediation Board. Only Continental Airlines (NYSE:CAL - News), with five strikes in 28 years, has seen more.
Experts are divided over whether Northwest's tough reputation is an effective bargaining tool or unnecessarily provokes employee wrath. The carrier has recently negotiated deals with its other unions and has achieved a labor savings goal of $1.4 billion.
Bankrupt airlines frequently ask for court permission to void labor contracts, but they usually reach deals with unions before the judge rules on the request.
"I think the way they handle negotiations has been very abrupt and confrontational," said Stuart Klaskin at KKC Aviation Consulting. "Northwest certainly has a reputation ... for having attracted some of the industry's more aggressive and tough-minded managers."
Northwest reinforced that image last year during a confrontation with the Aircraft Mechanics Fraternal Association. After failing to reach a labor deal, AMFA sent its members on strike. The airline simply replaced the workers.
Northwest has said it is ready for a flight attendants' strike but has declined to outline its contingency plan.
Airline expert Darryl Jenkins praised Northwest's straightforward approach to union negotiations.
"Certainly it helps them because everybody at the table knows that the other party carries out what it says it's going to," Jenkins said.
Former Northwest executive Brodin said critics sometimes underestimate Northwest's compassion for its employees. He noted the carrier's successful efforts this year to get Congress to reform pensions laws.
The pension measures, signed into law this month, gave airlines more time than other industries to meet their pension contribution obligations, thereby preserving employee retirement plans that otherwise might have been scrapped.
"From a purely economic standpoint, that probably wasn't the best choice," Brodin said.
AFA General Counsel David Borer agreed that Northwest is not unique in its contentious labor relations. In fact, he reported a mostly positive experience in negotiations with the airline.
"Our initial experience has been a professional attitude at the bargaining table. The problem is they're just asking for too much," Borer said.
Thursday August 24, 12:28 pm ET
By Kyle Peterson
CHICAGO (Reuters) - Northwest Airlines (Other OTC:NWACQ.PK - News), facing a potentially devastating flight attendants' strike on Friday, is living up to its reputation as an unflinching, no-nonsense labor negotiator, experts said.
With a threatened job action looming, the airline is standing tough and not retreating from a decision last month to void the workers' contract to reach a cost savings goal.
Some say Northwest's tack against the Association of Flight Attendants (AFA) has become increasingly common as airlines balance their desire for good employee relations against their need to pinch every penny.
"The last several years have pushed (industry) labor relations into a new frontier," said Joe Schwieterman, transportation expert at DePaul University. "Both sides are playing hardball tactics."
Top U.S. carriers have been forced to exact worker concessions to offset the pressures of low-fare competition and soaring fuel costs.
Northwest, which entered bankruptcy in September, last month terminated its flight attendants' contract and imposed terms that save the carrier $195 million a year.
Although the airline had court permission, the AFA said the action triggered its right to strike. The union has demanded that Northwest negotiate a contract that members will ratify.
Barring government interference, the union could strike as early as 9:01 p.m. CT on Friday. The airline has said a strike could erode bookings and ultimately ruin the carrier.
Bob Brodin, a retired senior vice president in charge of labor relations at Northwest, said the carrier is no tougher in negotiations than it has to be in a troubled industry.
"Northwest has over the years had some difficult negotiations with its unions," Brodin said. "I think it's true of most airlines."
The industry is rife with examples of stormy relations. UAL Corp. (NASDAQ:UAUA - News), parent of United Airlines, demanded two pay cuts during a three-year stint in bankruptcy that ended last year. The carrier achieved the savings through negotiations but came to the brink of a flight attendants' strike.
Earlier this year, bankrupt Delta Air Lines (Other OTC
ALRQ.PK - News), negotiated a labor contract with its pilots in the shadow of a strike threat. STRAINED LABOR RELATIONS
Northwest is no stranger to union showdowns. It has faced four strikes since industry deregulation in 1978, according to data from the National Mediation Board. Only Continental Airlines (NYSE:CAL - News), with five strikes in 28 years, has seen more.
Experts are divided over whether Northwest's tough reputation is an effective bargaining tool or unnecessarily provokes employee wrath. The carrier has recently negotiated deals with its other unions and has achieved a labor savings goal of $1.4 billion.
Bankrupt airlines frequently ask for court permission to void labor contracts, but they usually reach deals with unions before the judge rules on the request.
"I think the way they handle negotiations has been very abrupt and confrontational," said Stuart Klaskin at KKC Aviation Consulting. "Northwest certainly has a reputation ... for having attracted some of the industry's more aggressive and tough-minded managers."
Northwest reinforced that image last year during a confrontation with the Aircraft Mechanics Fraternal Association. After failing to reach a labor deal, AMFA sent its members on strike. The airline simply replaced the workers.
Northwest has said it is ready for a flight attendants' strike but has declined to outline its contingency plan.
Airline expert Darryl Jenkins praised Northwest's straightforward approach to union negotiations.
"Certainly it helps them because everybody at the table knows that the other party carries out what it says it's going to," Jenkins said.
Former Northwest executive Brodin said critics sometimes underestimate Northwest's compassion for its employees. He noted the carrier's successful efforts this year to get Congress to reform pensions laws.
The pension measures, signed into law this month, gave airlines more time than other industries to meet their pension contribution obligations, thereby preserving employee retirement plans that otherwise might have been scrapped.
"From a purely economic standpoint, that probably wasn't the best choice," Brodin said.
AFA General Counsel David Borer agreed that Northwest is not unique in its contentious labor relations. In fact, he reported a mostly positive experience in negotiations with the airline.
"Our initial experience has been a professional attitude at the bargaining table. The problem is they're just asking for too much," Borer said.
