Published Tuesday, April 10, 2001
NWA sweetened the pot to get deal with mechanics
Tony Kennedy / Star Tribune
Union officials on Monday confidently put forth the financial terms of a tentative contract for mechanics at Northwest Airlines, a group that hasn't been shy about trashing deals it doesn't like.
With one major exception -- back pay -- the Aircraft Mechanics Fraternal Association (AMFA) won improvements to a previous company offer that many industry observers had viewed as uncommonly generous for Northwest. That March 11 offer was in the form of an off-the-record "supposal."
The supposal, which is not an official table position, was at risk of never again seeing the light of day.
"In nearly every aspect, we did better than the supposal," said Jim Atkinson, a spokesman for AMFA Local 33 in Bloomington.
To the rank and file
With a proposed four-year contract now in hand after 4½ years of negotiations, it will be up to the rank and file to accept or reject it. In June 1998, Northwest mechanics overwhelmingly defeated a previous contract proposal, then fired the union that negotiated the deal. At one memorable forum leading up to the rejection, a union negotiator was pelted with eggs.
AMFA said the ratification process for the latest agreement is expected to take three to four weeks, and newly appointed Northwest Chief Executive Officer Richard Anderson said he hopes it goes smoothly.
"The agreement was long overdue," Anderson said Monday at a news conference.
Appointed CEO in February, Anderson said a speedy final agreement with AMFA will make for a successful launch of his administration. His stated mission is to end labor discord and strengthen customer service.
"It's a very important event," Anderson said. "We run a very good airline, but you haven't seen anything yet."
The proposed deal would provide an initial 27.6 percent pay increase, to an industry-leading $33.50 an hour, for an average veteran mechanic working second shift. An average technician would receive a lump sum "retro" bonus of $10,000, in lieu of the 100 percent back pay that AMFA demanded. And the pension rate, currently at $40, would soar to $85. That rate, multiplied by a worker's years of service, equals the retiree's monthly pension benefit.
As is AMFA's tradition, union leaders won't endorse the tentative agreement. But AMFA Local 33 President Steve MacFarlane said union moderates were describing the deal Monday as a clear success. He said hardliners were less enthusiastic, but supportive.
"Our hardliners are characterizing it as both sides were harmed equally," he said.
AMFA National Director O.V. Delle-Femine did not return phone calls Monday from the Star Tribune, but he told Minnesota Public Radio that "both sides should be congratulated."
"It's amazing," Delle-Femine said. "That's why you have negotiations. You can go for months at a time and all of a sudden it just falls into place."
Oberstar steps in
The tentative accord was reached after Rep. Jim Oberstar, D-Minn., warned union leaders last week that failure to settle likely would lead Congress to impose a settlement -- a possibility considered remote in past years. With a May 10 strike deadline looming, a Presidential Emergency Board was due this week to recommend settlement terms that Congress could impose to stop a strike.
"I think it would have come to that," said Oberstar, who is the ranking Democrat on the House Transportation and Infrastructure Committee.
Oberstar said he also urged Northwest last week to "make a good faith, vigorous last-ditch effort."
The existence of the emergency board, appointed a month ago by President Bush to investigate the contract dispute, added pressure to both sides.
It was only the second such board created in airline labor disputes since the 1960s. In the other instance, President Clinton created a PEB in 1997 to stop a strike by American Airlines pilots, and members of the board intervened in the negotiations to forge a settlement.
The board's recommendations in the NWA-AMFA case now are expected to remain secret unless Northwest's mechanics refuse to ratify the contract proposal.
Oberstar called the deal "a great tribute" to Anderson, and said Anderson had "immersed himself in the negotiations virtually around the clock" during the final weekend.
A boost for all
The settlement could bolster AMFA, a non-AFL/CIO union seeking to expand its representation of mechanics at major airlines, including No. 1 United Airlines.
Despite the obvious increase in labor costs that the tentative agreement represents at Northwest, the airline's stock rose $1.04 Monday to $22.66 per share.
According to an AMFA information sheet, the tentative agreement immediately would raise base pay for mechanics by 24.4 percent. Airline cleaners and custodians, also part of the union, would receive an initial pay increase of 13 percent, to $18.23 for a senior cleaner.
Because of increases in certain premiums that supplement the base rate for mechanics, a 14-year NWA mechanic holding two licenses and working the second shift would make $33.50 under the proposed pact, 27.6 percent more than the current $26.25.
In Northwest's March 11 "supposal," the proposed rate was $33 for the same worker.
On the issue of back pay, AMFA leaders had continually said they would not accept what all other Northwest unions accepted in their most recent contracts -- a lump sum payment equal to 3.5 percent of a worker's W2 wage earnings from October 1996, when the contract came up for renewal. Instead, mechanics wanted 100 percent of their initial pay raise applied retroactively to October 1996.
Under the tentative agreement, the average cleaner or custodian would receive $6,600 in "retro" money. A mechanic who has worked a lot of overtime since late 1996 stands to collect a lump sum of nearly $22,000.
New to Northwest's final offer was an additional "one-time pay adjustment" of $3,750 for mechanics and $1,875 for cleaners and custodians. Also new was a company concession to include all pay premiums when calculating overtime rates for mechanics. Currently, only a mechanic's base pay is used to calculate overtime.
On pension, Northwest reintroduced its "supposal" rate of $85. Previously, the company had offered a rate of $75. AMFA was asking for $90.