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Posted on Tue, Apr. 27, 2004
Outsourcing could hurt airbase
DULUTH:Northwest Airlines' desire to outsource more mechanical work raises concerns about additional job losses at its Duluth maintenance base.
BY PETER PASSI
NEWS TRIBUNE STAFF WRITER
As part of a cost-cutting initiative, Northwest Airlines is looking to outsource more of its airplane maintenance work.
The company has asked the Aircraft Mechanics Fraternal Association, the union that represents its maintenance workers, for contract alterations enabling it to lift the cap on how much work it can send to external companies. The union estimates that if Northwest has its way and is able to boost the amount of work it outsources from 38 percent to 48 percent, another 1,000 workers would lose their jobs.
Those cuts would come on top of others that have enabled Northwest to trim about 2,700 mechanics from its payroll during the past three years.
"Obviously, we don't like the idea," said Randy Reents, a Northwest mechanic at Northwest's Duluth airbase and vice president of AMFA Local 35. "As far as us willingly making concessions that give more jobs away, it's not going to happen."
Employment at Northwest's Duluth maintenance base has declined about 40 percent, from more than 350 people at the start of 2003 to 217 employees as of the airline's last report Nov. 30.
"People in Duluth should be teed off about outsourcing at Northwest," Reents said, pointing to the company's pledge to create and maintain 350 jobs at its Duluth airbase. "We've already lost a lot of jobs."
AMFA's contract with Northwest could be open for amendment in May 2005, and negotiations are expected to begin this fall.
Northwest wants to remain profitable this year. During 2003, it eked out $248 million of net income on sales of $9.5 billion.
It will need to make up some ground, however. During the first quarter of this year, it posted a $230 million loss.
Duluth Mayor Herb Bergson said that during a meeting with Gov. Tim Pawlenty earlier this month, the two discussed Northwest's failure to maintain promised employment levels at the maintenance base.
In return for $270 million in bond financing from the Metropolitan Airports Commission, plus additional assistance from Duluth, St. Louis County and the Iron Range Resources and Rehabilitation Board, the airline pledged to hire at least 350 people to work at its Duluth airbase by the end of 2000 and to maintain the work force at that minimum level for the next 30 years.
Pawlenty "reiterated that while the state was monitoring the situation, it was not going to take action until May of 2005 in terms of holding Northwest's feet to the fire regarding the numbers," Bergson said of his conversation with the governor. "Naturally, we're disappointed."
Bergson said he has no intention to let Northwest off the hook.
"Northwest received lots of money -- both the state's and ours," he said, noting the aid the airline received through agreements in 1992 and 1994. "They made a promise, and we want to hold them to it."
Peter Sausen, an assistant commissioner for the Minnesota Department of Finance, said he believes the state could technically recall Northwest's financing in light of cuts it made in Duluth, but doing so might jeopardize the airline's continued health.
However, Mary Stanik, a Northwest spokeswoman, contends her company has acted within its rights.
"Northwest Airlines is in full compliance with the financing agreement which provides relief from meeting target employment levels during times of national economic stress," she said. "Reductions in Minnesota employment levels cannot exceed national company employment reductions."
For now, Sausen said the state doesn't intend to play hardball.
"We're not enforcing the remedies that are available to us at this time, but we are watching the situation," he said.
But when economic conditions improve and Northwest finds itself on firmer footing, the airline will be expected to make good on its word.
"They have an agreement with the state, Duluth and St. Louis County to maintain a certain number of jobs, and we intend to get those jobs back," Sausen said.
In a Feb. 27 letter to Northwest, the Minnesota Department of Finance asked the airline to begin providing monthly employment level reports at the Duluth maintenance base and any pending changes in operations. Sausen said his office has received no response from the company.
Robert Benner, Northwest's director of government affairs, could not be reached for comment Tuesday, but acknowledged in a March 10 letter to Bergson that Northwest has fallen below target employment levels in Duluth. Yet he held out little hope that jobs would be returned any time soon.
"While employment is expected to be flat in 2004, we plan to restore employment levels in Duluth when we recall substantial numbers of mechanics as economic conditions improve," he wrote.
Benner said there may be opportunities to transfer additional work to Duluth.
"We recognize our obligation to restore employment to a level consistent with the policy covenants," Benner said.
St. Paul Pioneer Press staff writer Martin J. Moylan contributed to this report.
Outsourcing could hurt airbase
DULUTH:Northwest Airlines' desire to outsource more mechanical work raises concerns about additional job losses at its Duluth maintenance base.
BY PETER PASSI
NEWS TRIBUNE STAFF WRITER
As part of a cost-cutting initiative, Northwest Airlines is looking to outsource more of its airplane maintenance work.
The company has asked the Aircraft Mechanics Fraternal Association, the union that represents its maintenance workers, for contract alterations enabling it to lift the cap on how much work it can send to external companies. The union estimates that if Northwest has its way and is able to boost the amount of work it outsources from 38 percent to 48 percent, another 1,000 workers would lose their jobs.
Those cuts would come on top of others that have enabled Northwest to trim about 2,700 mechanics from its payroll during the past three years.
"Obviously, we don't like the idea," said Randy Reents, a Northwest mechanic at Northwest's Duluth airbase and vice president of AMFA Local 35. "As far as us willingly making concessions that give more jobs away, it's not going to happen."
Employment at Northwest's Duluth maintenance base has declined about 40 percent, from more than 350 people at the start of 2003 to 217 employees as of the airline's last report Nov. 30.
"People in Duluth should be teed off about outsourcing at Northwest," Reents said, pointing to the company's pledge to create and maintain 350 jobs at its Duluth airbase. "We've already lost a lot of jobs."
AMFA's contract with Northwest could be open for amendment in May 2005, and negotiations are expected to begin this fall.
Northwest wants to remain profitable this year. During 2003, it eked out $248 million of net income on sales of $9.5 billion.
It will need to make up some ground, however. During the first quarter of this year, it posted a $230 million loss.
Duluth Mayor Herb Bergson said that during a meeting with Gov. Tim Pawlenty earlier this month, the two discussed Northwest's failure to maintain promised employment levels at the maintenance base.
In return for $270 million in bond financing from the Metropolitan Airports Commission, plus additional assistance from Duluth, St. Louis County and the Iron Range Resources and Rehabilitation Board, the airline pledged to hire at least 350 people to work at its Duluth airbase by the end of 2000 and to maintain the work force at that minimum level for the next 30 years.
Pawlenty "reiterated that while the state was monitoring the situation, it was not going to take action until May of 2005 in terms of holding Northwest's feet to the fire regarding the numbers," Bergson said of his conversation with the governor. "Naturally, we're disappointed."
Bergson said he has no intention to let Northwest off the hook.
"Northwest received lots of money -- both the state's and ours," he said, noting the aid the airline received through agreements in 1992 and 1994. "They made a promise, and we want to hold them to it."
Peter Sausen, an assistant commissioner for the Minnesota Department of Finance, said he believes the state could technically recall Northwest's financing in light of cuts it made in Duluth, but doing so might jeopardize the airline's continued health.
However, Mary Stanik, a Northwest spokeswoman, contends her company has acted within its rights.
"Northwest Airlines is in full compliance with the financing agreement which provides relief from meeting target employment levels during times of national economic stress," she said. "Reductions in Minnesota employment levels cannot exceed national company employment reductions."
For now, Sausen said the state doesn't intend to play hardball.
"We're not enforcing the remedies that are available to us at this time, but we are watching the situation," he said.
But when economic conditions improve and Northwest finds itself on firmer footing, the airline will be expected to make good on its word.
"They have an agreement with the state, Duluth and St. Louis County to maintain a certain number of jobs, and we intend to get those jobs back," Sausen said.
In a Feb. 27 letter to Northwest, the Minnesota Department of Finance asked the airline to begin providing monthly employment level reports at the Duluth maintenance base and any pending changes in operations. Sausen said his office has received no response from the company.
Robert Benner, Northwest's director of government affairs, could not be reached for comment Tuesday, but acknowledged in a March 10 letter to Bergson that Northwest has fallen below target employment levels in Duluth. Yet he held out little hope that jobs would be returned any time soon.
"While employment is expected to be flat in 2004, we plan to restore employment levels in Duluth when we recall substantial numbers of mechanics as economic conditions improve," he wrote.
Benner said there may be opportunities to transfer additional work to Duluth.
"We recognize our obligation to restore employment to a level consistent with the policy covenants," Benner said.
St. Paul Pioneer Press staff writer Martin J. Moylan contributed to this report.
the worst management team(Northwest's) in the airline industry, while the TWU SURRENDERED to the runnerup(AA) :down:
