Carrier Wants To Transfer Pilots To New Regional Operation

The head of the Northwest pilots union is standing firm on his declaration the union will not accept any contract with the airline that would shift as many as 1,500 pilot jobs to a new regional subsidiary.

"It's a corporate shell game of transferring assets and franchise value to a new company," Mark McClain, chairman of the Northwest pilots union, said last week to the Minneapolis Star-Tribune.

Northwest management is hoping to create a new regional subsidiary (referred to as NewCo) flying 76- to 100-seat RJs. Both new pilots and previously furloughed Northwest employees would be called upon to fly the aircraft, according to the carrier.

According to McClain, however, the deal isn't as altruistic as Northwest would have everyone believe -- stating the carrier instead wishes to use the subsidiary to drop as many as 30 percent of the 5,100 pilots now on the Northwest payroll.

"We see this as another mechanism for the Gary Wilsons of the world to make a trainload of money on our backs," McClain said. Wilson is Northwest's board chairman.

Northwest asserts the move is merely another way to make the airline, currently involved in Chapter 11 bankruptcy proceedings, more competitive.

"Northwest cannot simply bring 70-seat regional aircraft into its mainline system because that does not make economic sense -- a fact borne out by the fact that no legacy airline operates 70-seat regional jets within their mainline fleets," the airline said, adding a new airline could potentially "provide jobs for hundreds of furloughed NWA pilots."

The carrier hopes to add the new subsidiary to facilitate replacement of the carrier's aging DC-9s with advanced RJs, such as Embraers, that are better suited to Northwest's route structure -- and are more economical than the fuel-guzzling, 30-year-old planes.

Northwest has stated it will take three things for the carrier to emerge from bankruptcy -- a "competitive cost structure," eliminating excess debt and "resizing the fleet." The carrier noted the bankruptcy court has already approved the carrier's plan to buy more Airbus A330s (above) to strengthen its international fleet.

That puts the Northwest pilot's union -- part of the Air Line Pilots Association, the same organization that recently agreed to an interim contract with similarly-troubled Delta -- in a powerful position.

"It's make-or-break time at Northwest Airlines," McClain said, adding that for Northwest to survive, management must be willing to negotiate contracts that recognize "the value of the employees doing the work."

If the carrier doesn't agree, McClain said pilots may once again be forced to strike -- a move that cost the airline $1 billion in 1998.

"The management team, led by John Dasburg, didn't listen to what we were telling them. We told them all along what our demands were and what would happen if they were not met," McClain said. "They paid the price."

In a memo to Northwest's pilots, McClain stated "NWA pilots will not accept the NewCo [subsidiary] proposal. There will be no deal on management's current terms."

If Northwest's executives don't back off, McClain added, Northwest's Chapter 11 bankruptcy reorganization could become a Chapter 7 liquidation.

FMI: www.nwa.com, www.nwaalpa.org