Mediators declared an impasse in negotiations between Northwest Airlines Corp. and its mechanics on Wednesday, beginning a 30-day cooling-off period that could end with a strike.
Jeff Mathews, contract coordinator for the Aircraft Mechanics Fraternal Association, said the 30-day period ends at 12:01 a.m. EDT on Aug. 20. After that, federal labor law says mechanics can strike or Northwest can impose new wage rules. Northwest, the nation’s fourth-largest airline, has pledged to keep flying if there’s a strike.
Talks are expected to resume as the deadline draws closer, although Mathews said no dates have been set. Northwest also said in a statement that it expects talks to continue. But even if they make a deal, the uncertainty could hurt bookings at Northwest during the busy summer flying season.
A strike could also be avoided if President Bush appoints an emergency board, as he did in the spring of 2001 when Northwest’s mechanics were poised to strike. At the time, Bush said he was concerned about the effects that a Northwest shutdown would have on the national economy. The mechanics and the airline reached a deal soon after.
Mechanics authorized a strike with 92 percent of the vote on Tuesday.
Northwest, squeezed by rising fuel prices, competition from low-cost carriers, growing pension obligations and looming debt payments, is seeking $1.1 billion in annual labor cost savings. Northwest lost $458 million during its most recently reported quarter.
It wants $176 million in yearly savings from mechanics, or about a 25 percent pay cut. AMFA has offered temporary pay cuts it says would save $143.5 million. Northwest disputes that, though, saying the union offer is really worth only $87 million because it includes money saved from earlier layoffs.
Mechanics said Northwest never responded to the union offer.
“By refusing to budge from their unreasonable initial offer, they made a consensual agreement impossible and forced the process toward a strike,” said AMFA National Director O.V. Delle-Femine.
Northwest said it needs the cuts because it has the highest labor costs in the industry. Andrew C. Roberts, its executive vice president of operations, said the airline wants a deal with mechanics that will allow it to stem its record operating losses.
“It is imperative that we reach a concessionary labor agreement with AMFA this year,” he said. “Failure to achieve the needed $176 million in savings from AMFA will leave the airline at increased financial risk.”
Northwest has gotten $300 million from pilots and managers, and is seeking $148 million from flight attendants, according to their union.
The last major U.S. airline strike was when Northwest pilots walked off the job in 1998. That strike lasted for 15 days and resulted in a 12 percent raise over four years for pilots.
In May, AMFA mechanics at bankrupt United Airlines threatened to strike if a judge imposed pay cuts. Instead, mechanics approved a contract that included a 3.9 percent pay cut and fewer benefits.