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Mon, Oct 09, 2006

Agreed: Northwest Airlines Reaches Tentative Contract With AMFA

Northwest Airlines tells ANN that it has reached a tentative agreement with the Aircraft Mechanics Fraternal Association (AMFA) to end an ongoing labor dispute with the airline's technicians. A membership ratification vote will be conducted during the next 30 days.

The agreement, in part, provides striking employees with the option of accepting layoff status and receiving one week of layoff pay per year of service, up to a maximum of five weeks, or employees may leave Northwest and receive one week of separation pay per year of service, up to a maximum of ten weeks.

Employees accepting layoff will be entitled to remain on furlough status for two years from the signing date of the agreement.

The positions of current Northwest technicians will not be affected by the proposed agreement. Striking employees who accept layoff status may bid on open technician positions. The agreement maintains the necessary $203 million in annual labor costs savings from AMFA-represented employees.

Northwest said that if the agreement was ratified by AMFA members, the airline would withdraw appeals of state unemployment compensation determinations, thereby ensuring that members now receiving benefits would not be subject to having those benefits recouped should Northwest's appeal be successful.

Northwest has reached agreements on permanent wage and benefit reduction agreements with the Air Line Pilots Association (ALPA), the International Association of Machinists and Aerospace Workers (IAM), Aircraft Technical Support Association (ATSA), the Transport Workers Union of America (TWU), and the Northwest Airlines Meteorologists Association (NAMA). Two rounds of salaried and management employee pay and benefit cuts have also been instituted and the needed flight attendant labor cost savings have been implemented, allowing Northwest to meet its goal of achieving $1.4 billion in annual labor savings.

Since beginning its restructuring process in September of last year, Northwest has remained focused on its plan to realize $2.5 billion in annual business improvements in order to return the company to profitability on a sustained basis. The restructuring plan continues to be centered on three goals: resizing and optimization of the airline's fleet to better serve Northwest's markets; realizing competitive labor and non-labor costs; and restructuring and recapitalization of the airline's balance sheet.

FMI: www.nwa.com

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