Bankrupt Northwest Airlines Monday asked a court to impose a temporary 19 percent wage cut on its 14,400 ground workers, according to court documents.
If the motion receives court approval, it would give the No. 4 U.S. carrier $114 million in annualized savings. In return, its three largest unions would receive more time to reach permanent labor contracts.
The airline simultaneously asked the court to approve the temporary concession agreements it has reached consensually with the unions representing its pilots and flight attendants.
Northwest’s motion represents a small step back from an earlier request that the court allow it to void the labor contract of any employee group that fails to agree to its required concessions.
“One thing is clear,” the airline said in a court filing. ”If Northwest does not obtain interim relief now with permanent relief soon thereafter, or obtain permanent relief expeditiously, it faces a grave risk of irreparable harm.”
A hearing on the motion is set for Nov. 16. Northwest said that if the court does not impose the temporary cost savings on the ground workers, represented by the International Association of Machinists, then it will again ask the court to void the labor contracts.
Northwest, which is restructuring in bankruptcy, has said it needs a total of $1.4 billion in annual labor savings to survive.
The carrier said last week that if it can get its labor groups to agree to concessions worth 60 percent of the $1.4 billion goal by mid-November, then it will give them until early next year to negotiate contracts that would grant the full amount.
The Air Line Pilots Association reached a temporary deal last week that needs the approval of its members. The Professional Flight Attendants Association also has agreed to a temporary concessions package. Both union deals are contingent on the IAM agreeing to comparable concessions.
The IAM is the only union that has yet to reach an interim deal. A union spokesman was not immediately available for comment. But a message on the IAM Web site last week said the union had requested information from the airline to verify its financial needs.
“We will do our best to get a fair agreement, but we will not be pressured into negotiating an agreement without having all necessary financial data and a cost structure that both parties can agree to,” IAM President Bobby De Pace said in a Nov. 4 bulletin to members.
In addition to the 19 percent wage cut, Northwest proposed sick pay of 75 percent of prevailing wages for IAM workers. Northwest has said it needs $190.4 million annually from the workers.
The carrier, which filed for bankruptcy protection in September, has said it must reduce its labor costs to achieve $2.5 billion in overall yearly savings.
Northwest, along with other major U.S. airlines, has been battered by soaring fuel costs, weak revenue and low-fare competition.