updated 3/7/2006 6:30:21 PM ET 2006-03-07T23:30:21

Baggage handlers at Northwest Airlines Corp. rejected the company’s proposed pay cuts and authorized a strike, their union said on Tuesday, a move expected to force the carrier back to the bargaining table.

Workers represented by the International Association of Machinists and Aerospace Workers issued a split decision. Among its 7,600 ticket and reservations agents, 67 percent voted to approve the company’s proposal. But 60 percent of its 5,600 baggage handlers and stock clerks voted it down.

“The anger and frustration among all employee groups at Northwest Airlines was evident throughout the voting process,” said District 143 President Bobby De Pace. “In the end, Northwest management failed to convince a majority of the work force that the proposal was appropriate or that they could be trusted to honor their commitments.”

The company said it was disappointed by the outcome and would ask the bankruptcy judge to re-start proceedings aimed at rejecting the union’s contract with those workers who voted down the proposed settlement.

Union spokesman Frank Larkin said he expected Northwest to ask the bankruptcy court judge in New York to restart the trial over whether the airline can reject its contract with its workers. He also said he expects negotiations to resume.

Voting on the Northwest proposal wrapped up on Monday. The union said three-quarters of its roughly 14,000 members cast paper ballots that had to be counted by hand.

Northwest, which filed for bankruptcy protection in September, has been pushing for $1.4 billion in permanent pay cuts and rule changes for its workers. In January, the IAM became the first of the large unions to agree.

The union asked members to vote on an 11.5 percent pay cut as well as rules that would allow Northwest to use more part-time workers. But it never called Northwest’s proposed contract an “agreement,” and union leaders never endorsed it explicitly, although the union’s professional advisers advised members to accept it.

The proposed contract scaled back Northwest’s outsourcing proposals, and shifted the airline’s pension plan for IAM workers to the union’s plan. Union leaders also said the proposal would have saved 649 of 733 jobs that Northwest wanted to outsource, and kept 82 percent of its jobs overall.

Flight attendants and pilots made deals on March 1 and 3. Those have yet to be ratified by members. Both have authorized strikes if the tentative agreements are not ratified.

Separately Tuesday, the judge overseeing Northwest’s bankruptcy case in New York ruled that attorneys, bankers and consultants in the case will have to wait for some of the nearly $15 million in fees they seek for 3½ months of work.

Judge Allan Gropper said he was holding back 20 percent of the fees for a future date. The U.S. Trustee’s office, which works with the judge to oversee the bankruptcy process, had sought the delay, saying it would be an incentive for a successful resolution of Northwest’s bankruptcy.

Meanwhile, the carrier was given until May 1 to provide extensive details of its assets and liabilities. Northwest had asked to be given until June 1 to do so. This detail will provide a better look at company’s financial health.

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