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"Northwest pilots could take pay cuts, concessions to help ailing airline
By Dan Reed, USA TODAY
Northwest Airlines (NWAC) pilots on Friday could become the latest airline labor group to accept big pay cuts and concessions to help their employer survive.
The pilots union is scheduled to announce results of its vote on a concession package that includes a 15% across-the-board pay cut for two years, but no changes to the pilots' retirement plan.
The pilots concessions would be the first affirmative response by labor to management's long-standing demands for deep cost cutting at the Eagan, Minn.-based carrier.
For months, unions ignored the urging of former CEO Richard Anderson, who resigned last month.
But continuing losses because of high fuel costs and weak pricing power amid intense competition for passengers increased the sense of urgency for cost cuts. Pilots union leaders reached a tentative agreement on concessions in mid-October.
Approval by Northwest pilots would follow a decision by US Airways pilots last month to accept deep cuts — for them, the third round. Voting by Delta Air Lines pilots on proposed concessions is scheduled to conclude next week.
At Northwest, the proposed pilot concessions would save the airline $265 million a year. Management says it needs total labor savings of $950 million a year.
Northwest's pilots generally rank second in pay behind Delta.
Northwest senior pilots flying Boeing 747s the maximum number of hours each year earn $273,000, according to salary tracker AirlinePilotPay.com. That same pilot at Delta would earn $320,000 under existing pay scales.
Leaders of other Northwest unions say they plan to buck industry convention by refusing to follow the pilots' lead.
"Once they get this from the pilots, they're going feel it gives them a license to go after everybody," says Bobby De Pace, president of the machinists local that represents Northwest's ramp workers, airport agents and reservationists.
Contract talks between management and both the machinists union and mechanics union are picking up in expectation that the pilots' pact will be ratified.
The pattern is well established in the airline industry during bad times. Once a carrier's pilots — the highest-paid work group — accept pay cuts, benefits reductions and work-rule changes, other labor groups follow.
It happened at Northwest a decade ago, keeping the carrier out of Chapter 11 bankruptcy then. But not this time at Northwest, say union leaders.
"Our attitude at this time is that they don't need the relief from us," says Jim Atkinson, president of the mechanics union at Northwest.
Atkinson's union will consider work-rule changes aimed at increasing productivity to help Northwest stem losses, he says. But the union wants pay raises to catch up with aircraft mechanics at profitable Southwest Airlines, who won raises with their latest contract.
Similarly, the machinists union is dead-set against concessions. Pilot ratification won't "change our position," says De Pace. "We've been telling the company for two years that we're not the problem."
Pilots making six-figure salaries can afford a pay cut; ground workers earning less than $20 an hour can't, he says. "If Northwest files bankruptcy, it won't be because of us. Our people are below the rest of the industry already," De Pace said."
"Up the Irons!"