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Union Room : Deal part reached/other not
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From: MSN NicknameLiesReality  (Original Message)Sent: 1/18/2006 12:07 AM

NEW YORK - Northwest Airlines Corp. told a New York bankruptcy court on Tuesday it has reached a tentative agreement with the union representing ground workers, but talks with pilot and flight attendants unions appeared to be deadlocked.

The nation's fourth-largest carrier, which filed for bankruptcy protection in September, also asked the judge overseeing the case for permission to reject labor contracts for pilots and flight attendants.

Northwest has said it needs to make cost cuts to match low-cost carriers. It also said the reductions are a step toward getting financing it needs to emerge from bankruptcy.

In announcing the agreement with the International Association of Machinists and Aerospace Workers, the attorney for Northwest said the airline was hopeful the tentative deal will be approved by the union's membership in three weeks. The union represents the airline's baggage handlers.

"I am very pleased you have reached one agreement," said Judge Allan Gropper.

Gropper said he hopes to see similar consensual agreements with other unions at Northwest, noting that litigation should not replace negotiations in a bankruptcy case.

Richard Seltzer, an attorney for the pilots union, warned that the airline could face a strike. Northwest attorneys countered that they would ask the court to force the workers back, adding that such a strike would be violation of the Railway Labor Act. Seltzer said that the union continues to work on a consensual deal and hinted that it may ask for a third party to mediate between Northwest and the pilots.

"If there's not some movement in some areas we consider vitally important, the company can expect a strike," Seltzer said.

"We do not believe that unions have the right to strike if the judge imposes terms," said Kurt Ebenhoch, spokesman for Northwest Airlines. He added: "We don't believe a work stoppage would be in the best interests of the airline, its employees, our customers or the communities we serve."

Northwest Airline is asking for $358 million in wage and benefit cuts from its 5,500 member pilots union, on top of $265 million of wage and benefit cuts agreed by the pilots in 2004, according Hal Myers, spokesman for the pilots union.

"Our goal is a consensual agreement, but we're not willing to give management things it wants but does not really need," Myers told the Associated Press. "If management demands remain excessive we may be forced into a situation where we have no choice (but strike). There are limits to what employees will do."

Lee Seham, attorney for the flight attendants union, said he was concerned about how Northwest is looking to outsource jobs for its routes to and from Asia.

Karen Schultz, a spokeswoman for the flight attendants union, said the outsourcing issue is a primary sticking point in its negotiations with Northwest. She said that the flight attendants union has agreed to $195 million in wage and benefit cuts and so-called productivity changes that extend hours worked by the flight attendants.

Schultz said that the hiring of non-U.S. workers for Asia flights could affect 1,800 to 2,600 jobs of its 9,000 member union.

Northwest pilots said they face a similar outsourcing issue. According to Myers, the airline is looking outsource work for pilots in aircraft with 70 seats or less to a subsidiary it plans to create, which Northwest has dubbed NewCo for now

Northwest management has conceived of NewCo as a new regional carrier which will be the cornerstone to its "domestic renewal," according to a recent company newsletter.

Northwest said in the newsletter that it hopes to launch the carrier next year with a fleet of new 70- to 100-seat jets. NewCo could have as many as 105 aircraft by 2010, and would fly under its own

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Federal Aviation Administration operating certificate.

Northwest management said the jets are the perfect size for 20 percent of Northwest markets, which include more small cities than any other carrier.

Meanwhile, Daniel Kasper, who runs the transportation practice for the consulting firm LECG in Cambridge, Mass., testified on behalf of Northwest that competition from low-cost carriers has eroded the airline's profits amid an industrywide downturn.

"The U.S. airline industry has just ... gone through the worst period in its history," said Kasper, who served at the United States Civil Aeronautics Board as Director of International Aviation. Without cost cuts, he said, the "prospects for emerging from bankruptcy are quite dim" for Northwest.



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