Mesaba unions offer 15% cost cuts

With a court showdown a week away, three unions made a new offer in an attempt to settle their contract standoff.
Liz Fedor, Star Tribune
October 04, 2006

The three main labor unions at Mesaba Airlines jointly offered Tuesday to give management a 15 percent reduction in labor costs in an attempt to save the company from a possible liquidation.

"If the company imposes [concessions], we believe that that will be a death blow to this company," said Tom Wychor, chairman of the Mesaba branch of the Air Line Pilots Association (ALPA).

Mesaba, which entered bankruptcy one year ago, has been attempting to reach contract agreements with its three large unions since December. The unions have resisted management's demands for a 19.4 cut lasting six years.

Union leaders said Mesaba management recently scaled back its demand to 17.5 percent in concessions lasting four to 51⁄2 years, depending upon the size of the airline's fleet. The unions propose contracts of 31⁄2 years.

Pilots, mechanics and flight attendants, under the banner of the Mesaba Labor Coalition, chose Tuesday to make a coordinated proposal to management. Their offer came one week before the parties are scheduled to return to court, where Mesaba has asked U.S. Bankruptcy Judge Gregory Kishel for permission to void its existing labor pacts.

Nathan Winch, a negotiator for the Aircraft Mechanics Fraternal Association (AMFA), said all three unions believe it's time to "bridge the gap" at the bargaining table.

The union proposals presented Tuesday incorporate a profit margin of 6 percent for Mesaba, union leaders said, adding that the company has used a 7.1 percent margin in its recent offers.

"The issue is: Will the company accept a proposal that will guarantee the company a profit and be ratifiable by the [union] members?" Wychor said.

The unions recognize that Mesaba needs cost reductions, but Winch said any labor agreements must not be so one-sided that they have no chance for ratification by the rank and file.

"We want to get away from the court," AMFA attorney Nick Granath said. "We want to get back to flying airplanes on a profitable basis."

Mesaba spokeswoman Elizabeth Costello said management expects to meet with the pilots union today.

"We are optimistic that there are agreements to be had at the bargaining table. That is where our focus remains," Costello said. "We will not discuss any specifics of negotiations in the media."

Tim Evenson, president of the Mesaba branch of the Association of Flight Attendants (AFA), said that his members are looking for "a livable wage, affordable health care and the ability to regain some of our lost wages once the company emerges from bankruptcy and becomes profitable."

If Mesaba fails to reach agreements with its unions, the company plans to impose new pay rates and work rules Oct. 15, Costello said.

In July, Kishel granted authority to Mesaba to void its existing labor contracts, but the airline never moved to exercise that power. Kishel's ruling later was overturned by U.S. District Judge Michael Davis.

Mesaba is seeking to regain court permission to allow it to impose reductions on its employees. The carrier has said its cash balance is running dangerously low.

Union leaders have threatened to strike if cuts are imposed, while Mesaba is seeking an injunction to block work stoppages.

Because of Mesaba's warning that it would impose lower pay Oct. 15, the unions on Tuesday urged "the traveling public to take steps to avoid travel on Northwest Airlink on and after that date."

Mesaba operates Northwest Airlink flights for Northwest Airlines. Northwest declined to comment directly on the unions' advisory to avoid bookings after mid-October. Instead, Northwest said, "We trust that Mesaba will reach consensual agreements with all of its unions and as a result, expect that there will be no impact on Northwest's schedule."

Mesaba management has argued that the labor-cost reductions are essential for Mesaba to secure contracts for regional flying for Northwest.

Liz Fedor • 612-673-7709 • lfedor@startribune.com