Flying High Northwest Airlines’ Workers Demand A Share Of Carrier’s Good Fortune

Three years after employee concessions helped stave off bankruptcy, Northwest Airlines is among the nation’s most profitable carriers.

As Northwest begins contract talks with its six unions, some think it’s payback time. Or is it?

Union members gave up $886 million in wages and benefits in 1993 in exchange for 24 percent of the company’s stock. They also gained three seats on the company’s 15-member board.

The concessions, plus a turnaround by the airline industry in general, helped Northwest post profits in the last three years. For the 12 quarters ending Sept. 30, Northwest made $1.2 billion.

With greater control by the employees and a brighter economic picture, the tone of negotiations has changed.

“It definitely puts us in a different bargaining position than we’ve ever been in,” said Paul Omodt, spokesman for the Air Line Pilots Association, which represents about 6,000 Northwest pilots.

“The barriers have broken down between labor and management,” he said.

Bob Brodin, Northwest vice president handling talks with pilots and the 9,700 flight attendants represented by the International Brotherhood of Teamsters, said management has shared financial and marketing information with union leaders since 1993.

“As a rule, they know much more about the company today than they did prior to 1993,” he said.

But union workers still expect Northwest’s profitability to be reflected in their paychecks.

“We’re looking for our fair share,” said Tom Trotter, spokesman for the International Association of Machinists, which represents more than 27,000 Northwest machinists, reservations agents, customer service and ramp workers. “But we all have an interest in the long-term viability of the carrier.”

Northwest’s president and chief executive officer, John Dasburg, acknowledges the employees’ contribution.

“They certainly helped the company out and in exchange we gave them a considerable amount of stock. They’ve had some good earnings,” he said.

Employees received shares of stock in line with their salary cuts.

A pilot making $124,000 a year, for example, took a salary cut of $19,220 each year. A machinist earning $41,000 lost $4,428. And a flight attendant making $31,000 took a hit of $2,914.

Pilots, who gave up the most in salary, ended up with more shares than others in the three big unions.

The stock, which went public at $13 a share in March 1994 and peaked at $55.88 last March, has recently been trading in the $32 range.

Salaries have since returned to 1993 levels.

Members of Northwest’s two largest unions, representing mechanics and flight attendants, received an additional 3 percent increase under a complex formula based on pay hikes at other major airlines.

Pilots, in arbitration with Northwest over their raises, say they also should get 3 percent. The company says pilots are due no extra money.

The three big unions began preliminary negotiations with management in late summer. Talks with the other three unions will start early next year. The old contracts remain in effect until new ones are approved.