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The Honolulu Advertiser
Posted on: Friday, April 27, 2007

Northwest attendants to vote on union deal

By Jewel Gopwani
Detroit Free Press

DETROIT — After a tumultuous year of strike threats, stalemates and legal battles, Northwest Airlines Inc. and its flight attendants union reached a deal yesterday just months before the airline is expected to emerge from bankruptcy.

The contract proposal, which must be voted on by flight attendants, wouldn't improve wages or benefits, which were cut sharply last summer.

But it would offer senior attendants early retirement packages, change some work rules and secure the union's $182 million claim in Northwest's bankruptcy.

The union could sell 40 percent of that claim and get Northwest stock for what's left over, which it could sell after the airline leaves bankruptcy.

That process could be worth between $15,000 and $18,000 per flight attendant.

This is likely the attendants' last chance to secure that claim. After attendants rejected two previous contracts, this is also Northwest's last chance to start its post-bankruptcy era with a ratified deal in hand.

But with concessions sinking morale at Northwest and across the airline industry, an approved contract might not do much to improve relations between the airline and its attendants.

"It's never a good day when 8,000 American workers are facing a concessionary agreement," said Andy Wisbacher, vice president of the Association of Flight Attendants Northwest chapter.

The union's top council was still reviewing the tentative contract reached by its negotiating committee yesterday to decide whether its 8,200 members should vote on it.

Northwest said the deal maintains the $195 million in cuts it sought from flight attendants and won't change its plans to leave bankruptcy in June.

"The agreement also includes additional contract modifications that Northwest believes will improve the flight attendants' work environment," Mike Becker, Northwest's senior vice president for human resources and labor relations, said in a statement.

Employees said they were cautious about the deal until they learn more details. Getting a payment from the bankruptcy claim would help in the short term but wouldn't make up for the wages they've had to give up in the last year and over the length of any proposed contract.

Northwest's flight attendants voted down two other tentative agreements last year, including one that offered an early retirement package.

Following those two rejections, Northwest won approval from a bankruptcy court judge to implement $195 million in annual cuts, including average wage reductions of 21 percent. Cuts to benefits and new work rules that raised the maximum number of hours attendants work were also included.

That was part of $1.4 billion in annual labor savings the carrier sought in Chapter 11 bankruptcy protection.

The company filed for Chapter 11 after losing more than $4 billion since 2001, citing an array of problems such as sagging travel after the 9/11 attacks, low fares and soaring fuel prices.

A forced wage cut was only one of many setbacks the attendants have encountered.

Two judges have rejected the union's attempt to strike. The National Mediation Board, which monitors airline labor disputes, has rejected two union requests for an impasse in contract talks, which would have paved the way for a legal strike.

A bankruptcy court judge also rejected the union's attempt to scale back the concessions the airline imposed last year.

In light of those obstacles, this deal might be the best option for attendants, said Darryl Jenkins, an airline consultant based in Marshall, Va.

"The flight attendants have a whole lot to lose right now if they don't have an accord coming out of Chapter 11," he said.

Even with a ratified deal, it will be a challenge to improve morale among flight attendants, who interact most with fliers.

"Nobody is happy right now," Jenkins said.