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NWA mechanics in Twin Cities could see ranks cut 30 percent by year-end
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Northwest Airlines says it is parking about 30 aging planes, putting 130 Twin Cities mechanics out of work in May. The airline projects another 800 mechanics will no longer be needed by the end of 2005. (MPR File Photo/Jeff Horwich)
The latest casualties of the faltering U.S. airline industry are 130 Northwest Airlines mechanics in the Twin Cities. By year's end, Northwest says 800 more mechanics jobs at the airport may be gone as well. The airline is parking planes it says it won't need. The mechanics union says that's a convenient cover for a broader strategy to shift work from its own employees to outside vendors.

St. Paul, Minn. — When Northwest officials informed Twin Cities mechanics earlier this week their ranks would likely be trimmed 30 percent during 2005, Aircraft Mechanics Fraternal Association Local 33 President Ted Ludwig says it caught them off-guard. Union negotiators had met with Northwest just days before and got no indication a major announcement was coming. But Ludwig says he had been waiting for the shoe to drop.

"We do think there were going to be layoffs at some point in time, we just didn't know when," Ludwig says. "We thought that would be negotiated in our contract."

Instead, Northwest is taking action for which no negotiation is required. By May, the airline will park 30 planes, mostly aging DC-9s. At that point, 130 mechanics who overhauled the planes at Twin Cities International Airport will no longer be needed.

Northwest spokesman Thomas Becher says newer planes in the fleet and some schedule cutbacks eliminate the need for the planes taken out of service. The planes "are just approaching the end of their natural life-cycles, and they are about to come up for some heavy maintenance work," Becher says. "So it made sense to look at that fleet."

The loss of jobs and planes follows Northwest's announcement Monday that the airline expects no growth in capacity in 2005. That is, the number of seats it puts in the air should be essentially flat, after growing three percent in 2004. Becher says this modest outlook, along with rising fuel prices that cost the carrier an additional $662 million last year, demand deeper cuts.

He says 800 more Twin Cities mechanics' jobs could be gone by year-end. "Like other carriers, Northwest Airlines faces record high fuel prices, fare restructuring initiatives by competitors, and domestic overcapacity,"Becher says. "These challenging market forces have required Northwest and other airlines to respond."

Becher says 800 additional job cuts is just an estimate, and he could not say where those cuts might come from. Union officials say at most, the parked DC-9s account for the jobs of only 240 mechanics.

Challenging market forces have required Northwest and other airlines to respond.
- Northwest spokesman Thomas Becher

Local 33 President Ted Ludwig believes Northwest's much larger target reveals the airline's broader intention to cut mechanics' jobs and move the work to outside shops. For its part, Northwest says in the latest moves it's also cutting some work sent to outside repair facilities.

Ludwig says the union plans in its current negotiations to fight any increase in the amount of repairs Northwest is allowed to outsource to outside companies here or overseas. The union also wants to preserve members' jobs by limiting how much flying Northwest can delegate to its regional partners, Pinnacle and Mesaba.

Airline analyst Joel Denney with Piper Jaffray in Minneapolis says it's hard for anyone locally to welcome major layoffs. That said, "it's good that they're taking corrective action," Denney says. "It's bad that it's an indication of just how difficult the environment remains. The economy is coming back but profitability for the airlines still is not back. So they have to find a way to cut their costs."

Denney says the most significant aspect of these latest developments is Northwest's effort to hold capacity flat. He says by restricting the number of seats, the airline should be able to raise prices on the many hub routes where it faces little competition. This would come on top of two fare hikes Northwest helped lead that have taken hold in the industry in recent weeks.

Northwest mechanics would also like to see higher ticket prices -- for the sake of preserving jobs. Union president Ted Ludwig says his members, and all airline employees, are caught in a race-to-the-bottom within the industry.

"Any company that produces a product for more than what it costs to sell the product is in a losing business," Ludwig says. "And this industry has done that, they've cut each others' throats. Even the low-cost carriers now are having trouble. It doesn't make sense for us, for them, to keep going down this path."

Ticket prices need to go up: That's one point where mechanics and Northwest executives can agree. Whether any extra money would preserve mechanics jobs, though, is another matter.