Audio An 'outside' job: External aircraft repairs raise concerns (story audio) Photos Barnett: "Costs'll kill you" in the aircraft maintenance business Local 33 President Jim Atkinson Pulling back from the gate Resources USDOT Office of the Inspector General: Review of Air Carriers' Use of Aircraft Repair Stations AMFA Local 33 Northwest Airlines Your Voice Join the conversation with other MPR listeners in the News Forum.

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An 'outside' job: External aircraft repairs raise concerns
by Jeff Horwich, Minnesota Public Radio
August 4, 2003

Northwest management and union mechanics disagree about the quality, safety, and job impact of Northwest's increased use of outside repair stations for aircraft maintenance. According to the federal government, Northwest now outsources 44 percent of repair work. (MPR Photo/Jeff Horwich)

In tough financial times, the country's major airlines are saving money by hiring outside companies to repair their airplanes. Eagan-based Northwest Airlines now hires companies both in the U.S. and overseas to do a larger portion of its maintenance than ever before. A recent government report has raised new questions about this trend. Northwest union mechanics say it could mean lower-quality repairs, and put flights at greater risk of terrorist attack. Northwest says outsourcing is not only safe, but critical to the airline's survival.

Bloomington, Minn. — Across the tarmac at Minneapolis-St. Paul International Airport, Jack Barnett can see the red tails of Northwest planes moving through the haze. Barnett has worked on airplanes for more than 30 years and now runs General Dynamics, an independent repair base. They work mostly on corporate jets and the occasional 737 for Continental Airlines.

Barnett says major airlines like Northwest will naturally come to such outside repair stations to get the best deal for their money. Aircraft maintenance is expensive and, as he puts it, "cost'll kill you."

	Barnett: "Costs'll kill you" in the aircraft maintenance business

"It's no different than our business," Barnett says. "If an operator brings his aircraft in here, and we're more expensive than our competition, he's going to take it to the competition."

U.S. airlines have increasingly been using the competition instead of their own mechanics. A report released last month by the U.S. Department of Transportation Inspector General says airlines can save up to 40 percent by leaving planes with domestic or overseas repair stations.

But the report found repair stations that used wrong parts, left problems unfixed, and filed incomprehensible paperwork. It also criticized the Federal Aviation Administration for lax inspection of these third-party facilities. The FAA concurred with most of the report's findings, but says the situation does not jeopardize passengers' safety.

Including both equipment and labor, Northwest now spends 44 percent of its repair money on outside vendors. On a recent conference call, CEO Richard Anderson said the airline is constantly trying for the perfect mix of in-house and outsourced repairs. And he denied that outside work is in any way inferior.

"The vendors that we use outside are absolutely safe, because we have our own quality assurance and oversight," Anderson said. "The firms that we use are among the leading firms in the world in providing this kind of maintenance."

Anderson gave the example of SASCO, also known as ST Aerospace. The company works on Northwest DC-10 aircraft at its home base in Singapore and owns a number of repair stations in the U.S. SASCO is part of a multi-billion dollar conglomerate, whose other maintenance customers include the U.S. Navy.

The vendors that we use outside are absolutely safe. - Northwest CEO Richard Anderson

But SASCO was part of a terrorism scare in 2001, when Singapore authorities rounded up 13 suspects they said were connected to Al Qaeda. One of them was a SASCO aircraft technician, who allegedly took more than 50 pictures of military planes and facilities at a U.S. airbase next door. The company did not provide anyone for an interview in time for this story, despite repeated requests.

Shortly after the incident Northwest issued a statement saying the suspect did not work on Northwest planes. The airline said it was working with SASCO to implement enhanced security measures. And Northwest says today it is satisfied with the security at SASCO and other overseas facilities.

The recent Department of Transportation report did not look specifically at security issues. But the possibility of terrorist infiltration worries Congressman Jim Oberstar, a Minnesota Democrat who is a leading aviation authority in Congress.

"Foreign maintenance personnel are not subjected to the same standards of background security checks, criminal background checks, identification for access to top maintenance facilities," Oberstar says. "And the concern is that it's very easy in [the] maintenance of a complex piece of equipment like an aircraft engine to place a bomb that can be triggered by global positioning satellite or barometric pressure device."

Oberstar is confident Congress will adopt a provision he's pushing to require security audits within one year for all foreign repair stations. Oberstar says U.S. airlines now outsource almost half of their maintenance, but regulations for both security and repair quality have failed to keep up.

"The very first paragraph in the FAA act says, 'Safety shall be conducted at the highest possible level.' Not only the safety that an airline can afford, not only the safety that the FAA chooses to do, but safety at the very highest level," Oberstar says.

New rules going into effect in October are supposed to bring FAA scrutiny of foreign repair stations up to the same level as domestic ones. Total FAA inspections are already up dramatically in 2003. The agency is on track to do twice as many as last year, though an FAA spokesman could not say how many of these would be inspections at outsourced shops.

	Local 33 President Jim Atkinson

Mechanics at Northwest say more frequent domestic and overseas inspections are important, but the problems with outsourced maintenance run far deeper. Jim Atkinson, president of the Aircraft Mechanics Fraternal Association Local 33, says workers at outsourced stations have substantially lower levels of training and experience.

Atkinson says his mechanics regularly see problems left behind by outsourced shops. He says they have missed or ignored needed repairs in major flight systems and in the airframe.

"If you're not working for that specific airline and your job is to make your company money, that means you're going to turn it out as fast as you can," Atkinson says. "That means that if you see a crack five feet away from the area you're supposed to working in, you'll maybe not take a look at it or write it up. Whereas here [in-house at Northwest], we'll do that."

Atkinson says his union mechanics are obligated by their license to attend to every problem they see. Northwest requires every in-house mechanic to have a license. But at outsourced bases, Atkinson says as few as 1 in 20 mechanics may actually have a license. Under federal law, aircraft repairs can be done by unlicensed mechanics, as long as a licensed mechanic signs off on it.

Atkinson says outsourced shops have a habit of relying on the multiple back-up systems built into modern aircraft, which leaves passengers with fewer layers of safety. He says as aircraft travel from repair station to repair station, problems tend to mount.

"There're not aircraft falling out of the air right now, but what we've seen is when aircraft have been at a vendor for a number of years, and then they come in-house, a one-week check turned into 45 days because there was so much wrong with the aircraft," Atkinson says.

At the moment, Northwest mechanics are raising concerns about repair work done in China. Until recently, mechanics in the Twin Cities still worked on 747s. But Northwest 747s are now mostly maintained and overhauled by a company called HAECO, based in Hong Kong. The company would not do an interview to respond to the concerns, but in an e-mail a spokeswoman detailed the rigorous training of HAECO mechanics. The company, she wrote, has been in business over 50 years and just last year received a major award for quality. On the question of terrorist infiltration, she says Hong Kong is one of the safest cities in the world.

The director of the Aeronautical Repair Station Association defends the quality of outsourced work, and the mechanics her members employ. Sarah MacLeod represents about 500 repair stations around the world.

"I don't think that there is any substantial difference between the ability of these mechanics to do work properly, whether I'm working in-house or for an independent," MacLeod says. "And I also really want to emphasize to the public that the [federal] requirements for housing facility, equipment, personnel, training and data are exactly the same."

In a statement, Northwest says it takes its responsibility for security and quality at its vendors "very seriously." CEO Richard Anderson says union objections to outsourcing are primarily about protecting jobs. According to the union, outsourcing has cost at least 15-hundred jobs just in the Twin Cities.

Northwest and the union disagree about whether the airline is using more outsourcing than permitted under the union contract. Anderson says the airline will not break labor agreements. But in the midst of a severe industry downturn, he says Northwest needs to seek the best values on aircraft repair -- wherever they may be.

"We really are in a global marketplace, and in a global marketplace competitive firms get the right mix of both in-source and outsource," Anderson says.

At this point both sides see outsourcing as a survival issue. Management has asked the mechanics union to agree to more outsourcing, to help the airline cut costs. Mechanics say the issue of where and how Northwest planes are repaired is not up for negotiation.

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