Strike Deadline Set for Northwest Airlines Mechanics

[Andre]

21 Jul 05 17:34:06
The clock is counting down on a possible strike by mechanics reports The Detroit Free Press. Faced with little headway on pay cuts the airline says it needs, federal mediators released Northwest and its mechanics union from contract talks, starting a 30-day cooling-off period. The mechanics could strike at 1201am EDT on 20-Aug-2005 unless they make a deal. The two sides are expected to keep meeting until the deadline. Northwest chief executive Doug Steenland said earlier that he believes it will take a firm deadline to make a deal happen. NW has pledged to keep flying if there's a strike, using managers and mechanics from contractors. But even if they make a deal, the uncertainty could hurt bookings at Northwest during the busy summer flying season and steer the carrier closer to a bankruptcy filing. The last major U.S. airline strike was when Northwest pilots walked off the job for 15 days in 1998. Northwest mechanics came within days of a strike in 2001, but President Bush appointed an emergency board, pushing back the deadline, and the two sides made a deal. Bush has the power to block a strike again, but the White House signaled Wednesday that that won't happen this time. Mechanics, technicians and cleaners represented by the Aircraft Mechanics Fraternal Association authorized a strike with 92% of the vote. Squeezed by rising fuel prices, competition from low-cost carriers, growing pension obligations and looming debt payments, Northwest is seeking $1.1 billion in annual labor cost savings. It lost $458 million during its most recently reported quarter. Calyon Securities analyst Ray Neidl said Northwest's labor costs are the highest in the industry.

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