Labor strife may ground four airlines

Strikes could keep 400M passengers out of the skies

This article originally appeared in the Detroit News on February 08, 2001 at http://detnews.com/2001/business/0102/08/a01-185454.htm.

By JOEL J. SMITH / The Detroit News

If it's a Thursday, there is talk of labor unrest at Northwest Airlines that could result in a strike, shutting down Detroit Metropolitan Airport's major carrier.

But the same is true if it's a Friday, a Saturday or any other day of the week. Northwest, the fourth largest domestic airline and Metro Detroit's dominant carrier, has been bargaining with its 9,000 mechanics and maintenance workers since 1996 without reaching a contract.

The lack of progress has been felt by passengers, who have seen hundreds of flights delayed or cancelled because of the ongoing labor dispute.

The mechanics union has repeatedly asked the National Mediation Board to declare an impasse, giving the disgruntled workers a 30-day cooling off period before they could legally ground the air carrier with a strike.

Such a move could cost Northwest and Michigan millions of dollars in lost business and create chaos for the traveling public.

The labor unrest doesn't just rest on the wings of Northwest. The top three domestic carriers -- United Airlines, American Airlines and Delta Air Lines -- all face similar strike situations this spring and summer.

If all four airlines were allowed to go on strike, two-thirds of the flying public -- nearly 400 million travelers -- would be grounded.

So far, federal mediators in the Northwest dispute have kept talks going, while trying to convince the mechanics their wage demands could bankrupt the airline.

In fact, the board has threatened to declare an impasse with the recommendation that the White House appoint a special Presidential Emergency Board to impose a settlement and end the destructive stalemate.


Passengers frantic

Passengers are frantic over the prospect of no air service at Metro.

When the airline's pilots went on strike for 15 days in 1998, vacations, business and other travel plans had to be scrapped. A work slowdown followed by the strike cost Northwest $1 billion in lost business that resulted in a $285.5-million loss for the year.

Patrick L. Anderson, managing director of Anderson Economic Group in Lansing, estimated the 12-day strike cost Michigan residents $323 million in lost goods and services with more than 500,000 passengers unable to complete flights arriving or departing in Michigan.

A strike by the mechanics automatically would ground the airline, forcing Northwest travelers to scurry to find other ways to move in and out of southeastern Michigan.

"I'm very concerned about it," said Nancy Gilmore, who commutes from her Southfield office to New York at least once a week on business. "I would have to drive to New York and stay there until the planes started flying again. It would effect my business."

Meanwhile, as the public makes travel plans, they worry about whether their flight will ever leave the ground. Northwest handles 75 percent of the passenger load out of Metro.

"If Northwest shuts down, it would have a tremendous effect on this area," said Judith Orhan, owner of Pointe Travel in Grosse Pointe. "Not only for passengers, but for cargo.

"Unions know they have the power to shut down the airlines. People are worried about it."

One of those people is President George W. Bush, who voiced concern this week about an airline strike.

He promised to "explore all options" if the airlines can't reach settlements, including intervention by the White House to prevent a work stoppage.

"I'm worried about strikes at airlines ... it could have a harmful effect on our economy," Bush said.


Negotiations tougher

Airline labor experts say negotiations have been getting tougher because of the economic boom of the past few years. The unions, which represent about 85 percent of airline workers, want to be rewarded for the successes of the airlines.

"It seems like hardly a day goes by that we don't have a major potential for a work disruption in the airline industry," said Robert P. Hunter, director of labor policy for the Mackinac Center for Public Policy in Midland. "I suspect it's because the airline industry is so heavily organized by the unions. It results in a volatility in the bargaining relationships.

"We're all asking ourselves if there is a better system of negotiations we can go to."

The former labor lawyer and member of the National Labor Relations Board said, however, that every alternative has some kind of drawback.

Labor negotiations for the airline industry fall under the National Railroad Labor Act, a 1926 law designed to prevent the interruption of interstate commerce. The law has a specific set of guidelines the airline industry must follow before a union can go on strike.

In the case of the Northwest mechanics, the process has dragged on, partly because the membership rejected a tentative agreement in 1998, threw out their union, voted in another bargaining unit and began the process all over again. And the new union, the Aircraft Mechanics Fraternal Association, has limited experience dealing with contract negotiations with a major carrier like Northwest.

This has frustrated bargainers at Northwest as well as federal mediators, which have been attempting to bring both sides to a settlement for about a year.

The AMFA's original economic demands called for a 114-percent increase in pay with an average salary of $117,000 coupled with a 150-percent hike in pension benefits. The proposal would have cost Northwest, including retroactive pay, $2.2 billion the first year or $5.7 billion over the life of the contract.

In 1997, Northwest's best financial year, the Minneapolis-based carrier showed a $600-million profit. They made $256 million in 2000.

The mediation board ordered an indefinite recess in November, calling the union's bargaining position unrealistic.

Later that month, Northwest went into U.S. District Court and obtained a temporary retraining order against the union, prohibiting a work slowdown that had cancelled or delayed hundreds of flights.

The AMFA went back to the mediation board in January with a scaled down proposal, but still $400 million above Northwest's offer, which the airline claims would make the mechanics the highest paid in the industry. A last-ditch effort by the mediation board got the parties $200 million apart. Currently a mechanic earns a base pay of $22.50 per hour. The union is demanding $31.07 an hour, a 38 percent increase.

When the gap looked insurmountable talks broke down last week, but bargaining resumed this week at the urging of the union.


Fine-tune Railway Act?

"In the case of AMFA and Northwest, they have acknowledged they aren't looking for an industry-leading contract. They want an industry-changing contract," said Jerry Glass, a Washington-based consultant on labor relations issues in the airline industry. "That's not anything any management is going to roll over and say, 'Take all our profits and we won't worry about any of our other employees.' "

Glass isn't convinced the Railway Act needs a major overall. But he said it wouldn't hurt to re-examine the act, perhaps fine-tuning it to fit today's negotiating process.

Perhaps one change might be to mandate the start of contract talks before the current contract runs out, a move used in other bargaining situations like the auto industry. It's not uncommon in the airline industry to begin bargaining talks months after the contract has expired.

The current law gives vast authority to the mediation board and allows it to take all the time necessary to prevent a strike.

And in the Northwest case, the mediators have threatened to ask the White House to set up an special emergency board to study the proposals for 60 days before making a recommendation to Congress to settle the unresolved issues.

Clinton intervened when American Airlines pilots went on strike in 1997. Just minutes after the walkout began, he established an emergency board and ordered the pilots back into the cockpits. An agreement was reach on a new contract a few days later.

Bush has hinted he will act aggressively as well in the event of a strike at any of the nation's major airlines.

You can reach Joel Smith at (313) 222-2556 or jsmith@detnews.com.

Share More …