CHICAGO, June 6 — Flight attendants at Northwest Airlines rejected a contract on Tuesday that would have cut their pay by $195 million a year, betting that improving financial conditions for the industry will help persuade a bankruptcy judge that the airline can afford to pay more.þþThe rejection — by about 80 percent of those voting among the nearly 8,700 active flight attendants at Northwest represented by the Professional Flight Attendants Association — came with a strike threat. þþNorthwest's management immediately asked the federal bankruptcy judge overseeing its reorganization, Allan L. Gropper, to enjoin the workers from striking. þþÿWe are taking this action to reassure our customers that they can continue to book Northwest with confidence,ÿ said Mike Becker, senior vice president for human resources at the airline.þþA strike does not appear imminent, and airlines and unions have repeatedly compromised at the 11th hour to avoid work stoppages that could force a shutdown and widespread job losses.þþNorthwest also asked the judge on Tuesday to allow it to reject the flight attendants' current contract and impose new terms.þþThe threat of such an imposition, which could not only reduce wages but weaken work rules and job security, had led union negotiators to agree to the $195 million in concessions in March. Since then, industry conditions have improved, though high fuel costs remain a big problem.þþThe company and the union presented arguments to the bankruptcy court beginning in January about whether Northwest should be allowed to abrogate the attendants' contract and impose new terms. The company argued that it needed lower labor costs to survive. The union countered that Northwest was asking for too much. The judge set aside the issue after the tentative agreement was reached in March. þþRoger King, an analyst at CreditSights, said he doubted the judge would side with the flight attendants. ÿI think the judge is going to take a look at the economics,ÿ he said. ÿHe's got to create a viable company.ÿþþWhatever the outcome, the escalating dispute could slow what has been a rapid march through bankruptcy proceedings for Northwest, based in Eagan, Minn. Talk within the industry and the company in recent weeks has been that Northwest could exit bankruptcy as early as January, assuming its labor deals fall into place.þþThe dispute with the flight attendants could also leave the airline with embittered employees at a time when it and other airlines are seeking to raise productivity and improve service. þþÿThe company went too far,ÿ the union president, Guy Meek, said. In a statement, Mr. Meek said that Northwest had been profitable for the last two months, ÿbut in court they continue their relentless pickpocketing of flight attendants.ÿ þþNorthwest said it needed the concessions. For April, Northwest reported a net loss of $295 million. Before reorganization expenses and interest expense, it had an operating profit of $53 million, a result of rising fares and fuller planes, coupled with an earlier round of substantial wage cuts.þþThe latest round of concessions sought by the airline will reduce expenses by $30 million a month when put in place.þþSome concessions accepted by other groups at Northwest are contingent on the flight attendants' reaching a similar agreement. A ratification vote by some members of the International Association of Machinists and Aerospace Workers is expected to wrap up later this week. Pilots ratified an agreement earlier.þþThe Northwest situation is complicated by an effort by another union, the Association of Flight Attendants, to replace the Professional Flight Attendant Association as the workers' collective bargaining organization. A vote on which union will represent the workers begins later this week.þþNorthwest moved on another front on Monday, warning that unless Congress passes legislation allowing the company to stretch out payments to finance workers' pensions, it would seek to terminate those plans. Northwest and some other airlines want 20 years to catch up to pension funding.þþOther airlines, including United Airlines and US Airways, terminated their plans in bankruptcy, turning the plans over to the Pension Benefit Guaranty Corporation, the federal agency that guarantees pensions. The terminations will result in far smaller payouts to many workers than had been promised.þþ
Source: NY Times
