Northwest Airlines Corp. mechanic Steve Sutherland is getting ready for a strike. He’s refinancing his Prior Lake, Minn., home and asking his wife to work longer hours.
The steps by Sutherland and other members of the Aircraft Mechanics Fraternal Association are a measure of the likelihood of a walkout against the No. 4 U.S. airline this weekend. Northwest on Thursday said the union’s latest contract proposal falls “far short” of the $176 million in annual concessions the carrier wants.
Northwest, based in St. Paul, Minn., says it needs job and wage cuts from the union or it could land in bankruptcy. The airline has a $107 million contingency plan to keep flights operating with replacement workers if a strike occurs.
From Denver, Northwest has 18 flights daily – four to Detroit, two to Memphis, nine to Minneapolis, two to Milwaukee and one to Indianapolis. The airline has about 105 employees in Denver.
Amid continuing negotiations, union workers are making preparations, too, by boosting savings and looking into alternative jobs. Sutherland, 44, says he doesn’t see how to avoid a strike, which may come as early as Saturday, unless Northwest drops its plan to cut almost half the union’s 4,200 members.
“It certainly seems like Northwest is determined to prepare for the eventuality,” said Standard & Poor’s analyst Jim Corridore, who has a “strong sell” rating on the company’s shares. “It’s prudent, given how vehemently the mechanics have been arguing that they will walk out.”
Sutherland, who has spent 20 years maintaining Northwest planes and became the union’s Minneapolis vice president this month, is blunt. “I do know our membership is ready to walk,” he says. The union also represents plane cleaners and building custodians.
Northwest shares have risen about 37 percent this week as negotiators in Washington considered new proposals. They rose 50 cents Thursday, or 10 percent, to $5.50 on the Nasdaq Stock Market.
The union Wednesday night provided an offer that cuts costs by $176 million and still preserves jobs, says Jeff Mathews, a union negotiator. That equals the value of concessions the airline is seeking, though Northwest says it estimates the offer is worth only $100 million.
Northwest’s shares, which traded at about $30 at the end of 2000, are down 50 percent this year.
The six-member Bloomberg U.S. Airlines Index has fallen 15 percent this year.
Merrill Lynch analyst Michael Linenberg said in a note to clients Thursday that a strike is likely and that Northwest is better prepared than any airline has been for a walkout.
Denver Post staff writer Kelly Yamanouchi and Bloomberg News reporter Lynne Marek contributed to this report.
