Deal Boosts Mechanics' Pay 37%

If OK'd, Northwest union would top industry salaries, avert forced contract by Congress

This article originally appeared in the Detroit News on April 10, 2001 at http://www.detnews.com/2001/business/0104/10/b01-209983.htm.

By JOEL J. SMITH / The Detroit News

DETROIT -- A tentative contract agreement reached Monday between Northwest Airlines and its mechanics union will boost worker's pay by 37 percent over four years and provide other gains that will make the carrier's mechanics the highest paid in the industry.

The deal could establish a new benchmark for mechanics negotiating contracts at other airlines. It could also boost the image of the Aircraft Mechanics Fraternal Association, a little known union attempting to subplant rival unions at other airlines.

If ratified by the mechanics within the next few weeks, the agreement will avert a strike by Northwest's 9,700 airplane mechanics and cleaners, and avoid a possible forced settlement imposed by Congress. The mechanics had threatened to strike in early May.

TERMS OF THE DEAL

Northwester Airlines' tentative agreement will give the mechanics a 24.4% raise upong signing and will increase their pay 37.3% over the life of the contract.

HOURLY PAY

Top Ranking Inspector

  • Current - $24.07

  • Date of Signing - $29.95

  • Fourth Year - $33.05

Top Ranking Technician

  • Current - $23.50

  • Date of Signing - $29.24

  • Fourth Year - $32.27

PENSION

  • Current - $40.00

  • Date of Singing - $85.00

  • Fourth Year - $85.00

BACK PAY

  • Approximately 3.5% of W-2 earning from October 1996 to ratification date (average technician $10,000, high-overtime techinician $21,900).

ONE-TIME PAY ADJUSTMENT

  • $37.50 per technician and higher

The tentative agreement between Northwest and its mechanics union gives the workers an immediate 24.4-percent pay boost, retroactive pay averaging $10,000 and a one-time pay adjustment of $3,750. The union has been working without a contract for four years. 

The four-year agreement, reached just after midnight Monday following 20 hours of bargaining over the weekend, also will increase the mechanics pension plan by 112 percent. 

The second and third years of the agreement, the mechanics get 3 percent raises. The fourth year they get an additional 4-percent pay hike.

That will take a lead mechanics pay from the current $24.07 per hour to $33.05 per hour, a 37.3-percent increase over the life of the contract. License, skill, line, shift and longevity premiums can add another $4.50 an hour to those rates.

Under the tentative agreement, cleaners and custodians will receive an immediate 13-percent raise, followed by 3-percent, 3-percent and 4-percent raises over the next three years. They also will earn a one-time pay adjustment of $1,875 and pension hike of 83.6 percent.

The tentative agreement came just three days before a special three-member presidential emergency board appointed by President George W. Bush was scheduled to release its recommendation for a contract settlement.

While not binding on the parties, if either side had rejected the recommendation, Congress could have stepped in and passed legislation on a settlement. The airline had said it would accept any recommendation. The union would only say it would look at the proposal, but was prepared to strike if necessary.

Labor experts said the hefty gains by the union may have been the result of Northwest's uncertainty over what the board might recommend. Northwest officials already had said they would accept any recommendation from the board.

Robert P. Hunter, director of labor policy for the Mackinac Center for Public Policy in Midland and a former member of the National Labor Relations Board, wondered how Northwest could pay for this contract.

"It remains to be seen if they can afford this," Hunter said. "It looks like both sides were worried about the presidential board. "It really gets messy when an emergency board issues a report. And you know that Congress doesn't want to get involved if they can avoid it."

Richard Anderson, the CEO of Northwest, said the airline will be able to afford the contract, although retroactive pay will cost the carrier about $88 million.

"I'm very gratified that we find ourselves nine days into my term as CEO with a tentative agreement with AMFA," Anderson said. "If we couldn't afford it, we wouldn't have agreed on it.

"Our mechanics had not had an increase in four years and the industry had moved significantly up. We were able to sit down, and they made some compromises and we made some compromises and in the end we reached an agreement."

Anderson said the airline's business plan for 2001 had wage and benefit increases for AMFA factored into it.

"It's important for the airline to put this chapter behind us and move forward," Anderson said. "We have long-term labor peace at Northwest with the ratification of this contract."

These same mechanics overwhelmingly rejected a tentative agreement in 1998 that lead to the decertification of the existing union in favor of AMFA. It is expected that workers this time will approve the proposed contract.

Anderson declined to discuss details of the tentative agreement saying that was up to AMFA officials.

Late Monday, national AMFA officials released the economic portion of the tentative agreement on its Internet site.

In a letter to its membership, O.V. Delle-Femine, national director of AMFA, said that as soon as the printing is completed, the contract will be distributed to the members. AMFA officials also will conduct informational meetings to explain the contract and answer any questions.

He said he expects the ratification process to take three to four weeks.

Union officials at AMFA Local 33 in Minneapolis said they would have no comment on the tentative agreement until all its members receive a copy. Bob Rose, president of AMFA Local 5 at Detroit Metropolitan Airport, said he would reserve comment until his membership could study the proposal.

A national AMFA spokesman also declined to comment, indicating they are hopeful the printed contract will be in the hands of the workers in about a week.

The deal could provide a boost to AMFA, which has been battling the International Association of Machinists to represent airline mechanics. AMFA recently won the right to have mechanics at United Airlines vote on representation.

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

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