davelikestofly

Can anyone give a nice simple gist of what this "possible" strike is about? Who is striking, why, and what are the ramifications? I am wondering because I have two flights this month on NW and want to be prepared....


thanks,

dave.

DJMeatBall

...response snipped...

josejsoe50

but I found the combination of the two hilarious..

Oh well, thats what I get for staying up late

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Radiocycle
NWA Moderator

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P.S. Why wont the employees of ePrize go on strike and make our world a better place?

midwestflyer

This potential strike is looking more and more likely as the dispute rages on. NW mechanics (AMFA) are fighting NW over wage concessions and job cuts. The strike deadline is August 19th. NW claims it can run a full operation with AMFA on strike, as it has replacement workers (scabs if you wish) to take their place. There is a chance that President Bush could intervene, however, that would be more likely in the case of a flight attendant strike. (Mainly because that would cause more of an operational disaster.)

Speaking of the FA's, they could strike as well, but that would be a few months from now. I guess we will have to deal with that story later. They haven't started the 30 day cooling off period.

If NW strikes, chances are you'll get to your destination, maybe behind schedule. It will be very interesting to see how this plays out. Your guess would be as good as anybody else's.

I like NW. They are, and have always been my airline of choice. It is a really sad situation. The management has cut everything on the operational side of things, and the sad truth is that the wages and benefits are the only thing left to cut. I personally think that NW management may be asking for too much from it's employees in givebacks (especially the FA's). However, on the flip side of the coin, NW's wages are much higher than the industry. Good arguments can be made for both sides, and neither side wants to give one way or the other.

With oil hitting $64 dollars a barrel today, it just makes the situation more dire in Eagan to get some pay cuts. Oil seems to be the biggest problem.

rwill11

I agree that the mechs pay and benefits are going down: however, the lack of fuel hedges is not a (pay) problem, its a management buffoonfest, and its not going to get any better. So if it doesnt get better what are you going to do Doug? any plan? anything?

fastair

Wow...lack of a hedge is a "buffoonfest"? Seems to me, a hedge is just an option. There needs to be a buyer, and a seller. Those that have the ability to sell large scale aviation fuel options are not didots overall. If they are, they would not have the assets to be able to sell a quantitny of options that a major carrier would want.

If not having a hedge is stupid, then the person who would sell a hedge is equally as stupid (why sell tomorrow for 30 dollars when tomorrow the going price will be 60 dollars?)

MOST (not all) experts did not predict this increase so great or for so long. Now people are saying oil could hit $100/bbl in the next year or two. Should NW use what little equity it has to purchase hedges at $85/bbl for next year? If the price hits $100 a bbl and they don't you could once again call them baffoons. If the price stays at 60 or drops to 50, then to purchase options for $85 would also be a "buffoonfest".

It is nice to look in the rearview mirror and see what path NW SHOULD have taken. It isn't as easy to look ahead and guess what path will provide the best outcome for the road ahead.

As a 2nd point, talk of chap 11 has been large for NW for over a year now. Their credit is not what I would call stellar. It takes credit or lots of free unrestricted $$ to play with options. NW just didn't have the assets in much the same way that US/UA/AA...didn't have them.

Lack of finanical liquidity and leverage does not make one a buffoon. It just makes one poor.

rwill11

yeah they should just keep losing a million dollars a day

trader475

Actually it's well over $2 million a day.

rwill11

lmao I have just spent the last 24 hrs on a nw trip. my last seg was mem-mia. 1 hr before flight it was cancelled. Yahoo since they really dont have to give up anything for a flight cancellation. basically Nw is screwing its passengers for all these (chaos) mechanicals. The strike has already begun, I will no longer fly NW until it gets its act together. I had to sit in MEM for 4 hrs only to be cancelled with no options. Thanks mechs and thanks NW

1Banker

NW is going to use the strike to file Chapter 11. And they have to if they are going to compete. Sure they need to get some of what are the highest wage costs in line with lower cost competitors, but unless they (sadly) dump the pension plan as others have done through bankrupty, or in the case of start-up airlines that never offered pensions, they can not compete. Bankruptry rules change October 17, 2005. Look for a filing before then. NW will still fly while in Chapter 11, but with the wage/job concessions they want & without a pension. It is just going to happen.

bstreeter

As reported in an August 6th article posted on the Northwest Newstand forum, NW is spending $107 million to prepare for this strike. In light of the fact that NW and the Mechanics union were only $33 million apart when negotiations broke off (NW demanding $176 million in concessions while the union countered with $143 million), one might think it a bit irrational to spend $107 million to ostensibly get an additional $33 million in cost savings.

It seems to me that the strike is merely a pretext for a Chapter 11 filing to cancel the union contracts and the pension funds. Hopefully a Minneapolis-based bankruptcy court won't duplicate Judge Wedoff's shameful cancellation of the United pension plans. He thought that doing so was the only way to save jobs. It is more accurate to say that he was saving only downsized, low-paying jobs. United employees ended up with the worst of all worlds, losing half their pensions (since the Pension Benefit Guarantee Corp. cannot pay the fully promised pension benefits) and their higher unionized salaries.

Although I am a dedicated NW customer I would rather see the company liquidated and its remaining assets used to pay the promised pensions. Current employees would lose their jobs and face the dismal prospects of obtaining new jobs in an industry with massively reduced salaries, but this is a prospect that they face anyway. At least they'd preserve a shot at a decent retirement while working for a new or expanded low cost carrier or a downsizing legacy carrier.

At the very least, if the new bankruptcy court cancels all unionized pension plans, it should also cancel all retirement plans given to NW executives in the last ten years and make them take their chances with the PBGC

acf573

That's sorta true. The difference is $33M per year. So that $107M will get eaten up in 3 years. Not only that, the mechanics' offer is for $143M per year for the next two years, then everything reverts back to how things are now. NW wants permanent cuts. So there's actually a much bigger gulf between the two sides.

Regarding all these conspiracy theories, why does NW need to force a strike to declare BK? US Airways didn't. Neither did United. Why cripple your airline right before heading into BK? The simple fact of the matter is that NW wants to break the union. They seem to feel that they can do it if the mechanics strike. If they can't, then I think BK is a backup option for them. But to suggest it's their first option is ridiculous. If that's true, they could just file for BK at the end of the year w/o all this strife.

seoulmanjr

I thought it was Oct 22nd.. No?

Also, in response to another poster, I thought most carriers offer compensation in the event of a mechanical cancellation (hotel / food vouchers) and are required to do so. I thought that their only out on this was if it was a weather related delay beyond their control. Couldn't squeeze anything out of them? Or a bump voucher on the next, now overbooked, flight?

peace,
~Ben~

yogimax

Are you also a dedicated NW flyer with accumulated miles which would become worthless in a liquidation? If so, how many?

fastair

Airlines are not "required" to compensate or pick up expences, at least not in the US for anything. Airlines voluntarily do it, as it is a good business decision and a competitive action to do so. Read the contract of carriage (available on any airline website) of your carrier of choice as to what theri actual obligations are. Their only obligation is to get you (either on time or not) to the ticketed destination, and are not responsible for connections, or for failure to operate on time.