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Maintenance that's anything but routine
Fewer mechanics are on Northwest's payroll, and their work has changed, too. Planning for those changes began months before the AMFA strike.
Liz Fedor, Star Tribune
Last update: January 28, 2006 – 10:09 PM
Printer friendly E-mail this story
Northwest Airlines mechanics replaced an engine on a cargo-carrying 747 in 1996. Northwest now outsources almost all such maintenance.DAVID BREWSTER, STAR TRIBUNE file
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Summer temperatures in Arizona often top 100 degrees, and on many nights only 45 of the 149 rooms are occupied at the Smuggler's Inn, a Tucson hotel next to a public golf course on the city's East Side.
But last July, general manager John Cousins received an urgent call from Northwest Airlines. The carrier was in "dire need" of up to 100 rooms to house workers who were training to take the jobs of Northwest's union mechanics.
For two years, Northwest had warned employees that they would need to make big financial sacrifices to help the carrier survive. Pilots agreed to a 15 percent pay cut that took effect in December 2004, but leaders of the airline's mechanics union, which had lost more than half of its 9,795 members since 2001, remained defiant.
The news that Northwest was training potential replacement workers only antagonized them more.
When union members walked off the job Aug. 19, many believed Northwest would be forced to cancel thousands of flights and back off from its demands for deep pay and job cuts.
But Northwest kept flying. It had spent 18 months planning to do something remarkable and difficult for an airline its size: fly through a strike by the mechanics charged with repairing and ensuring the safety of its 441-plane fleet.
"We felt that we couldn't allow the airline to be held ransom," said Andy Roberts, Northwest's executive vice president of operations. He said the carrier earmarked up to $100 million for its strike contingency plan, but costs fell well below that figure.
Today, almost six months after the strike began, Northwest is a radically different airline. Before the strike, the Aircraft Mechanics Fraternal Association (AMFA) represented 4,100 mechanics, cleaners and custodians. Today, 880 mechanics are on Northwest's payroll, and they make $17,000 to $19,000 a year less than mechanics were paid before the strike.
The kind of work they do has changed, too. Airbus planes that used to be repaired by Northwest mechanics in Duluth are now sent to a company in Mobile, Ala., where heavy maintenance is done at a lower cost.
Northwest's hardball tactics with its mechanics union proved to be a precursor to similar outsourcing demands it would make to its pilots, flight attendants and ground workers after filing for bankruptcy in September. While acknowledging that the cuts are painful, the airline's top executives insist they are essential to lowering Northwest's costs so the carrier can compete with low-fare rivals.
Those rapidly-growing low-fare upstarts were on Roberts' mind in late 2001 when he met with then-CEO Richard Anderson about Northwest's maintenance costs.
"If we are in the business to fly airplanes first and foremost," Roberts asked Anderson, "do we want to be in the maintenance business?"
Compounding factors
The question was especially relevant at Northwest, where passenger bookings had declined in the weeks and months after the terrorist attacks of Sept. 11. To compound Northwest's financial problem, in May 2001 management had signed a new contract with AMFA that gave double-digit raises to mechanics and made them among the highest-paid in the industry.
Still, questioning the need for a full-scale, in-house maintenance operation was heresy in the eyes of AMFA leaders and rank-and-file members. Northwest's maintenance operations were considered among the best in the industry, and Northwest mechanics often were credited for helping the airline to get the most out of its aging fleet.
But Roberts believed the maintenance-cost gap between Northwest and its low-fare competitors was not sustainable. JetBlue, for example, sends almost all of its maintenance work to outside vendors, and U.S. airlines outsource more than 50 percent of their maintenance work.
In that environment, "It becomes a very, very compelling argument for management to say, 'Why do I continue to maintain the aircraft internally?' " said Steve Casley, managing director of BACK Aviation Solutions.
Ironically, the new contract with AMFA allowed Northwest to outsource up to 38 percent of its maintenance work. That ceiling was designed to give Northwest "some breathing room" during spikes in maintenance work, said Jeff Mathews, AMFA's Northwest contract coordinator.
Instead, it gave Roberts, Anderson and then-President Doug Steenland the escape valve they needed. As the airline's business worsened, they began sending more maintenance work to firms in Asia, Europe and the United States, including operations run by equipment manufacturers such as Pratt & Whitney and Honeywell.
In October 2002, Northwest said it would close its Atlanta maintenance base, where its DC-9s were maintained.
"At that point, it was crystal clear to most of the union representatives that they were serious about slashing the in-house maintenance," Mathews said.
In March 2003, Northwest said it would cut 2,000 mechanics jobs in response to adverse business effects of the Iraq war. The next month, Anderson told Northwest employees that the airline needed to cut its annual labor costs by $950 million. AMFA's share of the cuts was set at $173 million.
But there was a problem: AMFA's contract was set to run through the middle of 2005, and union leaders rebuffed Northwest management's efforts to open talks early.
Jim Atkinson, who served as president of Bloomington-based AMFA Local 33, said the union hired an outside firm to get an independent assessment of the airline's financial condition. Union members questioned whether Northwest executives "were being honest with us," he said.
By the time contract discussions with AMFA started in late 2004, Northwest's financial situation had worsened. In May 2005, the company gave the union a proposal that called for the elimination of 2,840 AMFA jobs and 25 to 26 percent pay cuts for those who would remain.
The union leaders, in a memo to members, saw the proposal as the handiwork of Roberts and Kris Bauer, Northwest's senior vice president of technical operations. The two, the union said, had "sold the idea" to Steenland to outsource work and eliminate Northwest jobs.
Bettting on a strike
Roberts knew that AMFA would not simply acquiesce to the airline's outsourcing strategy. Instead of saving some members' jobs through a negotiated agreement, Roberts thought that AMFA's leaders might gamble and try to secure a better offer by striking and trying to shut down the airline.
Roberts and his lieutenants decided they had to devise a plan to temporarily replace 100 percent of the maintenance workforce.
Roberts acknowledged there were skeptics within the corporate ranks who thought "there is no way we can pull this off," but he declined to name them. Anderson was chief executive when early contingency planning for a strike began, but he resigned 11 months before the AMFA strike. His successor, Steenland, was a strong backer of the contingency plan.
Roberts and Bauer knew they needed to find the right people to carry out their plan. About 350 of them -- salaried workers who hold mechanic licenses -- already worked for Northwest. They began specialized training many months before the strike.
"None of this was a secret to the mechanics," Roberts said.
Indeed, as early as March, Mathews notified union members that Northwest managers were being trained on how to taxi airplanes and complete paperwork for declaring planes airworthy.
Strike planners also knew there was an abundance of laid-off mechanics from other big airlines as well as Northwest, and they also could pick and choose among outside vendors to do maintenance. They enlisted Strom Aviation, a Waconia, Minn., company, and Florida-based AvTech to recruit mechanics to serve as temporary replacement workers during a strike.
In May, AMFA mechanics read the AvTech ads seeking replacements for $32 an hour.
Swissport, which operates in 39 countries, sought Northwest's contract to do routine maintenance tasks in Seattle, Anchorage and other cities outside of Northwest's big hubs.
"On their spreadsheets, that's what made sense," Mathews said. "That's the only thing that those executives understand is the financial aspect of it. The human factor has nothing to do with their decisions."
Replacement workers were moved to hotels in the Twin Cities in the days leading up to the strike deadline. On Aug. 19, Northwest began sending union workers home before the end of their work shifts. Many gathered in a parking lot near the union's headquarters in Bloomington, and some celebrated when the strike was declared at 11:01 that night.
"AMFA probably recognized that the outsourcing thing was a reality," said Atkinson, the former AMFA local president who was laid off a month before the strike. "But emotionally, they would fight it all the way. They couldn't look at it logically and say, 'What can we save and what can't we?' "
Lighter-purpose facility
Northwest's Building C, the cavernous white maintenance facility visible to motorists from Interstate Hwy. 494, used to house three "heavy maintenance" lines. After a certain number of hours flying, Boeing 757s and DC-9s were taken apart, repaired and put back together.
Today, that work goes to outside vendors.
The 500 mechanics who work in the Twin Cities do shorter-term, less-intensive fixes -- such as brake and tire changes, oil checks and an array of preventive maintenance -- designed to keep the fleet in the air.
Building C now serves as Northwest's maintenance triage center. It still has a variety of shops, including those where mechanics work with engines, sheet metal and component parts. When planes come in, however, a careful diagnosis is made of what repairs are needed before mechanics begin their work. That assessment includes a comparison between the cost of fixing a part in house as opposed to using an outside company.
"If it is a relatively short job, a relatively quick turn, we do it. If it's something that requires an overhaul, then it gets sent out to a vendor," Bauer said at Minneapolis-St. Paul International Airport.
Also, the carrier has an Intermediate Maintenance Operation in the Twin Cities, where planes often are worked on for three to five days.
On a recent weekday, a crew was changing landing gear on a Boeing 757. Doug Selby, a veteran Northwest mechanic, was working alongside new-hire mechanics. His manager, Landon Nitschke, pitches in from time to time to do hands-on maintenance work.
Before the strike, Selby, a 31-year Northwest mechanic, was making $38 an hour. "Now I'm making about $27," he said.
Selby earns more when he's asked to serve as a crew manager, and in recent weeks he has traveled to Germany to test new Airbuses and to Alabama to coordinate work with a Northwest vendor.
Ken Hylander, Northwest's chief safety officer, has emphasized that all of the mechanics hired by Northwest are licensed and experienced. Selby said he has been impressed with the skills of the mechanics who have joined Northwest during the past few months. "They go to the same schools that we have [attended]. They have the same responsibility [for safety] when they sign off a logbook as I do."
The strike officially continues, but many mechanics have moved on to new jobs, and picketing at the airport has diminished. With its new maintenance structure in place, Northwest said it is saving more than $200 million a year on labor costs.
The airline also is using bankruptcy to lower its total operating costs, and its creditors are waiting anxiously to see how they will fare.
One of them is the Smuggler's Inn in Tucson. Northwest paid Cousins $123,000 for housing the replacement mechanics, but the check payments were reversed after the bankruptcy filing.
"We're hoping we can at least salvage 25 cents on the dollar," Cousins said.
Liz Fedor • 612-673-7709
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MINNEAPOLIS - ST. PAUL, MINNESOTA
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Log in|Register
Search All News Local Websites Yellow Pages Shopping/Classifieds Homes Paid Archives Jobs Cars Help
Home||Business
Maintenance that's anything but routine
Fewer mechanics are on Northwest's payroll, and their work has changed, too. Planning for those changes began months before the AMFA strike.
Liz Fedor, Star Tribune
Last update: January 28, 2006 – 10:09 PM
Printer friendly E-mail this story
Northwest Airlines mechanics replaced an engine on a cargo-carrying 747 in 1996. Northwest now outsources almost all such maintenance.DAVID BREWSTER, STAR TRIBUNE file
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Maintaining the fleet
Suspected maintenance violations increased in strike's first 100 days
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Dec. 7, 2005: U.S. warns of TB in Minnesota cattle
Oil company breaks record for quarterly corporate profits
Rapid consumer spending helps push the savings rate to lowest level since 1933
Dell Computer hiring 5,000 in India
Summer temperatures in Arizona often top 100 degrees, and on many nights only 45 of the 149 rooms are occupied at the Smuggler's Inn, a Tucson hotel next to a public golf course on the city's East Side.
But last July, general manager John Cousins received an urgent call from Northwest Airlines. The carrier was in "dire need" of up to 100 rooms to house workers who were training to take the jobs of Northwest's union mechanics.
For two years, Northwest had warned employees that they would need to make big financial sacrifices to help the carrier survive. Pilots agreed to a 15 percent pay cut that took effect in December 2004, but leaders of the airline's mechanics union, which had lost more than half of its 9,795 members since 2001, remained defiant.
The news that Northwest was training potential replacement workers only antagonized them more.
When union members walked off the job Aug. 19, many believed Northwest would be forced to cancel thousands of flights and back off from its demands for deep pay and job cuts.
But Northwest kept flying. It had spent 18 months planning to do something remarkable and difficult for an airline its size: fly through a strike by the mechanics charged with repairing and ensuring the safety of its 441-plane fleet.
"We felt that we couldn't allow the airline to be held ransom," said Andy Roberts, Northwest's executive vice president of operations. He said the carrier earmarked up to $100 million for its strike contingency plan, but costs fell well below that figure.
Today, almost six months after the strike began, Northwest is a radically different airline. Before the strike, the Aircraft Mechanics Fraternal Association (AMFA) represented 4,100 mechanics, cleaners and custodians. Today, 880 mechanics are on Northwest's payroll, and they make $17,000 to $19,000 a year less than mechanics were paid before the strike.
The kind of work they do has changed, too. Airbus planes that used to be repaired by Northwest mechanics in Duluth are now sent to a company in Mobile, Ala., where heavy maintenance is done at a lower cost.
Northwest's hardball tactics with its mechanics union proved to be a precursor to similar outsourcing demands it would make to its pilots, flight attendants and ground workers after filing for bankruptcy in September. While acknowledging that the cuts are painful, the airline's top executives insist they are essential to lowering Northwest's costs so the carrier can compete with low-fare rivals.
Those rapidly-growing low-fare upstarts were on Roberts' mind in late 2001 when he met with then-CEO Richard Anderson about Northwest's maintenance costs.
"If we are in the business to fly airplanes first and foremost," Roberts asked Anderson, "do we want to be in the maintenance business?"
Compounding factors
The question was especially relevant at Northwest, where passenger bookings had declined in the weeks and months after the terrorist attacks of Sept. 11. To compound Northwest's financial problem, in May 2001 management had signed a new contract with AMFA that gave double-digit raises to mechanics and made them among the highest-paid in the industry.
Still, questioning the need for a full-scale, in-house maintenance operation was heresy in the eyes of AMFA leaders and rank-and-file members. Northwest's maintenance operations were considered among the best in the industry, and Northwest mechanics often were credited for helping the airline to get the most out of its aging fleet.
But Roberts believed the maintenance-cost gap between Northwest and its low-fare competitors was not sustainable. JetBlue, for example, sends almost all of its maintenance work to outside vendors, and U.S. airlines outsource more than 50 percent of their maintenance work.
In that environment, "It becomes a very, very compelling argument for management to say, 'Why do I continue to maintain the aircraft internally?' " said Steve Casley, managing director of BACK Aviation Solutions.
Ironically, the new contract with AMFA allowed Northwest to outsource up to 38 percent of its maintenance work. That ceiling was designed to give Northwest "some breathing room" during spikes in maintenance work, said Jeff Mathews, AMFA's Northwest contract coordinator.
Instead, it gave Roberts, Anderson and then-President Doug Steenland the escape valve they needed. As the airline's business worsened, they began sending more maintenance work to firms in Asia, Europe and the United States, including operations run by equipment manufacturers such as Pratt & Whitney and Honeywell.
In October 2002, Northwest said it would close its Atlanta maintenance base, where its DC-9s were maintained.
"At that point, it was crystal clear to most of the union representatives that they were serious about slashing the in-house maintenance," Mathews said.
In March 2003, Northwest said it would cut 2,000 mechanics jobs in response to adverse business effects of the Iraq war. The next month, Anderson told Northwest employees that the airline needed to cut its annual labor costs by $950 million. AMFA's share of the cuts was set at $173 million.
But there was a problem: AMFA's contract was set to run through the middle of 2005, and union leaders rebuffed Northwest management's efforts to open talks early.
Jim Atkinson, who served as president of Bloomington-based AMFA Local 33, said the union hired an outside firm to get an independent assessment of the airline's financial condition. Union members questioned whether Northwest executives "were being honest with us," he said.
By the time contract discussions with AMFA started in late 2004, Northwest's financial situation had worsened. In May 2005, the company gave the union a proposal that called for the elimination of 2,840 AMFA jobs and 25 to 26 percent pay cuts for those who would remain.
The union leaders, in a memo to members, saw the proposal as the handiwork of Roberts and Kris Bauer, Northwest's senior vice president of technical operations. The two, the union said, had "sold the idea" to Steenland to outsource work and eliminate Northwest jobs.
Bettting on a strike
Roberts knew that AMFA would not simply acquiesce to the airline's outsourcing strategy. Instead of saving some members' jobs through a negotiated agreement, Roberts thought that AMFA's leaders might gamble and try to secure a better offer by striking and trying to shut down the airline.
Roberts and his lieutenants decided they had to devise a plan to temporarily replace 100 percent of the maintenance workforce.
Roberts acknowledged there were skeptics within the corporate ranks who thought "there is no way we can pull this off," but he declined to name them. Anderson was chief executive when early contingency planning for a strike began, but he resigned 11 months before the AMFA strike. His successor, Steenland, was a strong backer of the contingency plan.
Roberts and Bauer knew they needed to find the right people to carry out their plan. About 350 of them -- salaried workers who hold mechanic licenses -- already worked for Northwest. They began specialized training many months before the strike.
"None of this was a secret to the mechanics," Roberts said.
Indeed, as early as March, Mathews notified union members that Northwest managers were being trained on how to taxi airplanes and complete paperwork for declaring planes airworthy.
Strike planners also knew there was an abundance of laid-off mechanics from other big airlines as well as Northwest, and they also could pick and choose among outside vendors to do maintenance. They enlisted Strom Aviation, a Waconia, Minn., company, and Florida-based AvTech to recruit mechanics to serve as temporary replacement workers during a strike.
In May, AMFA mechanics read the AvTech ads seeking replacements for $32 an hour.
Swissport, which operates in 39 countries, sought Northwest's contract to do routine maintenance tasks in Seattle, Anchorage and other cities outside of Northwest's big hubs.
"On their spreadsheets, that's what made sense," Mathews said. "That's the only thing that those executives understand is the financial aspect of it. The human factor has nothing to do with their decisions."
Replacement workers were moved to hotels in the Twin Cities in the days leading up to the strike deadline. On Aug. 19, Northwest began sending union workers home before the end of their work shifts. Many gathered in a parking lot near the union's headquarters in Bloomington, and some celebrated when the strike was declared at 11:01 that night.
"AMFA probably recognized that the outsourcing thing was a reality," said Atkinson, the former AMFA local president who was laid off a month before the strike. "But emotionally, they would fight it all the way. They couldn't look at it logically and say, 'What can we save and what can't we?' "
Lighter-purpose facility
Northwest's Building C, the cavernous white maintenance facility visible to motorists from Interstate Hwy. 494, used to house three "heavy maintenance" lines. After a certain number of hours flying, Boeing 757s and DC-9s were taken apart, repaired and put back together.
Today, that work goes to outside vendors.
The 500 mechanics who work in the Twin Cities do shorter-term, less-intensive fixes -- such as brake and tire changes, oil checks and an array of preventive maintenance -- designed to keep the fleet in the air.
Building C now serves as Northwest's maintenance triage center. It still has a variety of shops, including those where mechanics work with engines, sheet metal and component parts. When planes come in, however, a careful diagnosis is made of what repairs are needed before mechanics begin their work. That assessment includes a comparison between the cost of fixing a part in house as opposed to using an outside company.
"If it is a relatively short job, a relatively quick turn, we do it. If it's something that requires an overhaul, then it gets sent out to a vendor," Bauer said at Minneapolis-St. Paul International Airport.
Also, the carrier has an Intermediate Maintenance Operation in the Twin Cities, where planes often are worked on for three to five days.
On a recent weekday, a crew was changing landing gear on a Boeing 757. Doug Selby, a veteran Northwest mechanic, was working alongside new-hire mechanics. His manager, Landon Nitschke, pitches in from time to time to do hands-on maintenance work.
Before the strike, Selby, a 31-year Northwest mechanic, was making $38 an hour. "Now I'm making about $27," he said.
Selby earns more when he's asked to serve as a crew manager, and in recent weeks he has traveled to Germany to test new Airbuses and to Alabama to coordinate work with a Northwest vendor.
Ken Hylander, Northwest's chief safety officer, has emphasized that all of the mechanics hired by Northwest are licensed and experienced. Selby said he has been impressed with the skills of the mechanics who have joined Northwest during the past few months. "They go to the same schools that we have [attended]. They have the same responsibility [for safety] when they sign off a logbook as I do."
The strike officially continues, but many mechanics have moved on to new jobs, and picketing at the airport has diminished. With its new maintenance structure in place, Northwest said it is saving more than $200 million a year on labor costs.
The airline also is using bankruptcy to lower its total operating costs, and its creditors are waiting anxiously to see how they will fare.
One of them is the Smuggler's Inn in Tucson. Northwest paid Cousins $123,000 for housing the replacement mechanics, but the check payments were reversed after the bankruptcy filing.
"We're hoping we can at least salvage 25 cents on the dollar," Cousins said.
Liz Fedor • 612-673-7709
Get the Star Tribune delivered to your home each day!
Click here to subscribe.
Top read stories
39 people may have heard of Weise's plan, Red Lake families told
Millionaire's mental condition at center of battle over estate
Bush to visit Minnesota on Thursday
Brooklyn Center passenger dies after car hydroplanes, rolls, gets hit
Rapid consumer spending helps push the savings rate to lowest level since 1933 Top emailed stories
The rise and fall of Thandiwe Peebles
Favre: As of now 'I would say I'm not coming back'
Maintenance that's anything but routine
Meth-using driver busted in northeastern Wyoming thought he was in Minnesota
Disasters: Being prepared for anything
+ More Top Jobs
Customer Service
Target
Business Office Patient Account Specialist
Edina Eye Physicians & Surge
Water Resource Technician
Capitol Regions Watershed Di
Maintenance Tech
Stuart Management
Machinist
Thorud Inc
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Phillips Plastics Corp
Accountant
Dynamic Air
Business Office
MN Masonic Home North Ridge
Copyright 2006 Star Tribune. All rights reserved.
Feedback|Terms of Use|Privacy Policy|Member Center|Company Site|Company Directory & Contacts|Company Jobs|Advertising Information|Newspaper Subscriptions & Service|eEdition|Classroom Newspapers
425 Portland Av. S., Minneapolis, MN 55488 (612) 673-4000
