NWAC Northwest Airlines (MM)

Company Ready to Meet Again with Union EAGAN, Minn., Aug. 4 /PRNewswire-FirstCall/ -- Northwest Airlines (NASDAQ:NWAC) expressed its disappointment over the Aircraft Mechanics Fraternal Association's (AMFA) decision to "walk away" from National Mediation Board (NMB)-hosted negotiations in Washington, D.C. "We are very disappointed that AMFA leaders decided to leave the bargaining table at this critical time. We believe that it is in the best interest of our employees for the two parties to continue to meet so that we can reach a consensual agreement prior to August 20," said Andy Roberts, executive vice president-operations. Addressing AMFA claims of lack of progress, Julie Showers, vice president- labor, said, "Northwest made a number of significant offers to AMFA this week." On Tuesday, the company shared a proposal with AMFA that included: -- Job Protection. The company offered specific job protection for more than 75% of technicians projected to be on the airline's payroll on August 20. The company had previously not offered any job protection. -- Profit-Sharing. The company offered a profit sharing proposal that would provide AMFA employees a pro-rated share of 10% of all company annual pre-tax earnings in excess of $1 million. -- Pension. Northwest proposed a freeze of the current defined benefit plan, allowing employees to collect all benefits accrued to date while earning future benefits in a replacement defined contribution plan. Under the replacement plan proposed, the company will contribute 5% of all eligible pay in each paycheck. "We remain ready to meet with AMFA representatives in order to reach a consensual agreement, in advance of the deadline, that provides wage and benefit levels that are fair to our employees while allowing Northwest to stem its record operating losses." As the result of labor agreements at its major competitors as well as lower labor cost structures at so-called "low cost carriers", Northwest Airlines now has the highest labor costs in the industry. "It is imperative that Northwest lower its labor costs to be competitive. Failure to achieve the needed $176 million in savings from AMFA will leave the airline at increased financial risk," Showers continued. Northwest has stated that it must realize at least $1.1 billion in annual labor cost savings in order to restructure successfully. To that end, Northwest remains in federal mediation with The International Association of Machinists and Aerospace Workers (IAM) and The Professional Flight Attendants Association (PFAA). In addition, it is continuing contract negotiations with representatives of its other unions. "Whatever the outcome of negotiations with AMFA, Northwest customers can continue to book their future travel with confidence. In preparation for a potential job action, the airline developed, during the past 18 months, a comprehensive contingency plan that includes expanded vendor relationships to ensure that Northwest continues to fly its full schedule," Roberts added. "AMFA's claims that Northwest's operations will be significantly disrupted due to a lack of expertise and familiarity with Northwest's aircraft are baseless. The vendors and contract mechanics Northwest will use, if necessary, to replace striking AMFA technicians have in fact many years of relevant experience on aircraft similar or identical to those in Northwest's fleet. Many of these licensed technicians are available to us due to layoffs at other legacy carriers," Roberts concluded. Northwest Airlines is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,600 daily departures. DATASOURCE: Northwest Airlines CONTACT: Northwest Media Relations, +1-612-726-2331 Web site: http://www.nwa.com/

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