Northwest Airlines Mechanics approve strike failing arbitration

Northwest Airlines Corp, the No. 4 U.S. airline, will face strike following the Airlines rejection on Monday of an offer from federal mediators to settle the airline’s stalled contract talks with its mechanics through binding arbitration.

The mechanics have voted overwhelmingly to approve a strike against the airline, the Aircraft Mechanics Fraternal Association said on Tuesday. In ballots tallied earlier, 92.4 percent of the AMFA members working at Northwest authorized their national leader to call a strike, the union said.

In response to the vote, Northwest released a statement that said it still hoped to reach a consensual agreement with the mechanics’ union, but was prepared to fly a full schedule if there was strike.

Stock in Eagan-based Northwest, the nation’s fourth-largest carrier, fell 2 cents to USD 4.65 in early afternoon noon trading on the Nasdaq.

Northwest Airlines, squeezed by rising fuel prices, competition from low-cost carriers, growing pension obligations and looming debt payments, is seeking USD 1.1 billion in annual labor cost savings from all of its workers, without which analysts have warned it could be forced to file for Chapter 11 bankruptcy protection from creditors…

It has gotten USD 300 million from pilots and managers, and is seeking USD 148 million from flight attendants, according to their union. The airline wants USD 176 million from its mechanics, or about a 25 percent pay cut.

Whether the mechanics will walk off the job depends on the next move by the National Mediation Board, which must first release the two sides from talks. Both the union and airline management have requested the move.

Aircraft Mechanics Fraternal Association National Director O.V. Delle-Femine said he expected the release soon. It would trigger a 30-day cooling off period. After that, the mechanics could strike.

“Our members have expressed their extreme frustration with Northwest’s unreasonable demands and refusal to take the negotiating process seriously,” Delle-Femine said in a news release.

The mechanics’ union has said it would accept 16% wage cuts and other concessions that, the union contends, would save Northwest about USD 140 million a year. But Northwest argues that the mechanics’ offer, at best, provides only about half of the USD 176 million in annual savings the airline wants from AMFA.

While the company negotiates with its unions, it is also lobbying Congress for changes that would allow it to spread out payments for its pension, which is now USD 3.8 billion underfunded.

Northwest claimed in a securities filing earlier this month that current pension law would require it to pay USD 800 million in 2006 and USD 1.7 billion in 2007.