Mesaba's big unions ratify new contracts

Pilots, flight attendants and mechanics approved concessionary contracts - but creditors raised an objection.

Liz Fedor, Star Tribune
November 28, 2006

Labor peace, which eluded Mesaba Airlines and its unions during the past year, finally was achieved Monday when pilots, flight attendants and mechanics ratified concessionary contracts.

"We were successful in negotiating agreements that met the actual needs of the company and did not yield to the overreaching demands made by management," Tom Wychor, chairman of the Mesaba pilots union, said at a Monday news conference.

In December, Mesaba told its unions that it needed to slash labor costs by 19.4 percent to survive, but airline negotiators ultimately agreed to cutbacks that will reduce labor costs by 15.8 percent. Mesaba is one of Northwest Airlines' regional carriers that connect passengers in smaller U.S. and Canadian markets to Northwest's route system.

"The pilots, flight attendants and mechanics -- along with every single Mesaba employee -- are making a considerable sacrifice to ensure the survival of this company and I am confident we will see brighter days ahead," John Spanjers, Mesaba president, said in a prepared statement.

In October, U.S. Bankruptcy Judge Gregory Kishel granted Mesaba's request to toss out its labor contracts, and he cleared the way for management to impose cuts of 17.5 percent and also barred the unions from striking the carrier.

Despite those legal clubs, Carla Rogat, vice president of the flight attendants union, said that Mesaba finally recognized the need to offer work terms that the unions could ratify.

Pilots approved their deal with 68 percent voting yes; almost nine out of 10 eligible pilots voted.

Almost two-thirds of the flight attendants cast ballots, and 80 percent of them ratified the deal. About 82 percent of mechanics voted, with 65 percent voting to approve.

The mechanics, with an 8.5 percent pay cut, will take the biggest wage reduction among the three unions. The flight attendants agreed to a pay cut of about 3 percent; pilot pay cuts range from 5 to 5.5 percent.

The labor unions took somewhat different approaches to achieving the total cost savings of 15 to 16 percent, which is why they don't have the same percentage wage cuts. Savings also are coming from changes in areas such as vacation accrual, sick leave pay and employee health care payments.

Labor leaders highlighted the fact that their new contracts allow them to recoup their lost wages as Mesaba grows. The contracts have a duration of four to 51⁄2 years, depending on Mesaba's fleet size.

Union leaders emphasized that Mesaba agreed to pay increases that automatically take effect when the contracts reach their amendable dates, which prevents the company from dragging out talks at lower wage rates.

All Mesaba employees, including top management, are set to take pay cuts effective on Friday.

The unions and Mesaba will be back in Kishel's bankruptcy courtroom today, because he needs to take formal action before the contracts can take effect.

Tim Robinson, an attorney for the Mesaba creditors committee, said his group has filed a "limited objection" over the $22.7 million in bankruptcy claims that the three unions negotiated.

"We are obviously worried about the dilution effect on our constituents," Robinson said. He also is troubled that the claims remain intact even if financial circumstances change. Before Mesaba reached deals with its unions, the creditors committee threatened to file a motion to seek liquidation of the carrier.

Nick Granath, an attorney for the mechanics union, said, "There is no deal if the creditors committee expects us to rewrite any of these contracts."

Kevin Wildermuth, lead negotiator for the mechanics, said that the $4.8 million claim that was negotiated by his union was a critical element to helping win approval of the deal.

Many employees have left the carrier for jobs elsewhere. "One-third of our members have quit," Wildermuth said. "Now the concessions will hit."

This week, Mesaba's fleet will shrink to 49 Saab turboprops and one Canadair Regional Jet as the last Avros are phased out of the fleet.

"We look forward to working together with all of Mesaba's employees to make certain Mesaba emerges from bankruptcy positioned for growth and success," Spanjers said.

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