Monday, March 06, 2006

NWA Pilots have a TA

Northwest Airlines and ALPA negotiators reached a tentative agreement late last week, ending a game of brinksmanship that could've ended in a strike that would've likely resulted in the demise of NW. The TA, which still needs to be reviewed by the Northwest pilots' ExCo and voted on by membership, contains significant concessions, but it's not nearly as bad as it could've been. I think you can chalk that up to the unity that Northwest pilots showed in an overwhelming vote to strike.

For those who haven't been following the story closely, Northwest has been operating under chapter 11 bankruptcy protection since September 15 of last year. Since then, they have been aggressively securing concessions from stakeholders, vendors, and (especially) employees. Even before the bankruptcy, Northwest management had demanded a concessionary contract of their mechanics' union that would've resulted in about half of those employees' jobs being outsourced. The Aircraft Mechanics Fraternal Association (AMFA) struck in August 2005 rather than accept the contract; Northwest has thus far successfully withstood the strike by using replacement workers (ie scabs).

If this precedent wasn't enough leverage against other employee groups, bankruptcy protection provided quite a bit more. Northwest filed several 1113(c) motions which, if approved by the judge, would've allowed management to throw out union contracts and impose their own payrates and wage rules. Using this threat, NW secured concessionary contracts from all employee groups except the pilots and flight attendants. In these two cases, the company was demanding scope changes that would've resulted in 50% (FA's) and 25% (pilots) of the jobs being outsourced. The flight attendants threatened to strike, and the pilots actually took a strike vote that was approved last Tuesday with 92% of the membership voting "yes," despite the fact that all sides recognized a stike would probably finish off Northwest. Under this threat, the flight attendants and the company reached a TA on Wednesday, and the pilots two days thereafter.

The good news is that the worst oursourcing provisions are gone. Northwest was trying to replace all international flight attendants with non-union foreign nationals, and outsource all flying on future DC-9 replacements. Under the TA's, international flying is untouched, and all airframes over 76 seats stay at Northwest mainline. The bad news is that the company can outsource unlimited airframes under 76 seats to any other carrier... Mesa, anyone?

The pilot's TA makes permanent the "temporary" 24% pay cut agreed to last November, but there are no additional payrate cuts (this was on top of a 14% cut in 2004). The maximum monthly credit hour figure was raised to 86 hours, vacation time was reduced, deadhead pay cut in half, sick pay reduced, and other concessions that will be bitter to swallow, but don't seem to be near what the company was originally proposing.

My initial reaction is that this is about as good as the pilots could expect to get under current circumstances, and we should be thankful that the company is keeping 76-100 seat jets in-house. Along with decisions at jetBlue and USAirways to keep the EMB-190 at mainline, it looks like we're finally seeing a limit of outsourcing to regional carriers. On the other hand, the 76-100 seat outsourcing proposal could've been a red herring all along, nothing but a bargaining chip to help the company get the rest of their demands. They certainly made the threat credible by allowing the mechanics to strike over outsourcing.

There is a certain segment of pilots that were hoping the Northwest pilots would strike and "burn it down!" Some of the more militant pilots have argued that concessionary contracts will continue to ravage the profession until somebody puts their foot down and says "no more!" If pilots willingly took Northwest down with them rather than take a concessionary contract, these types argue, it would make management at other airlines far less likely to screw with their pilot groups. I disagree. At the very root of things, today's concessionary environment is possible because there are more qualified pilots out there than jobs. Releasing another several thousand experienced pilots into the job market isn't going to give other pilot groups any more leverage. What NW ALPA chose to do was present a very credible threat of strike, backed up by a 92% yes vote, to force the company to drop the outsourcing provisions that would've stripped the union of any leverage when the airline returns to profitability. If you can keep the jobs, any paycut and work rule change is neccessarily temporary; you can fight for it next time around, when the company doesn't have a bankruptcy court in their corner.

Next up: Delta pilots. "May you live in interesting times," indeed.