January 15, 2006
Bankrupt Northwest Airlines has dodged a potential strike by members of the International Association of Machinists and Aerospace Workers after the two sides reached tentative agreement on a new contract covering the airlines ground workers.
The new contract, containing $190 million in cost savings, faces a ratification vote in the next few weeks.
Northwest had thrown down an ultimatum to the union, insisting it agree to the concessions or it would ask a bankruptcy court to terminate the current agreement. Such a move would have allowed Northwest to impose a new labor agreement and likely would have resulted in a walkout.
Northwest, the latest of the legacy airlines to try to fly out of financial turbulence, is still involved in negotiation with its other employee unions. Northwest pilots and flight attendants have balked at proposed concessions, which the company says it must have to become emerge from bankruptcy and become profitable again.
The machinists said negotiations produced some concessions on the companys part, and that the compromise would save hundreds of jobs while giving the airline the cost savings it needs.
The airline has lost $4 billion since 2001 and filed for Chapter 11 bankruptcy last September. Northwest pilots and flight attendants are working under temporary pay cuts the unions agreed to in November.
