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Witnesses warn of turbulence ahead if Delta buys Northwest
3 August 2008
| WASHINGTON - Union leaders and a labor economist whose university has spent eight years studying the airline industry are warning of turbulence ahead if Atlanta-based Delta Airlines swallows Minnesota-based Northwest. |
In the third hearing on the proposed deal before various congressional committees, Machinists Vice President Robert Roach warned the deal could lead to $15 billion in combined pension liabilities being dumped on the federal government.
Association of Flight Attendants-CWA President Pat Friend said Delta's management has already told AFA that it wants the "new Delta" to be totally non-union.
That's because the merged airline would become the nation's largest and would set the standard for others in a race that would eliminate the remaining well-paying jobs in the airline industry, she added.
Roach and Friend were two witnesses at the July 31 House Education and Labor Subcommittee hearing on the deal, which Delta wants to push through by the end of the year, before the Bush administration leaves office. The deal needs Bush Justice Department approval on anti-trust grounds. Unless Congress specifically enacts a ban on using federal funds in deciding the case, there is little lawmakers can do.
But that didn't stop the two union leaders, nor MIT labor economist Thomas Kochan, from warning of potential dire consequences to the workers, the airlines, and the communities they serve.
Kochan's one caveat was that if the merger is done right – with the two carriers working in cooperation with their unions – the disaster of slumping wages, disappearing pensions and declining service quality could be avoided. He recommended the airlines reach out to the other unions about the merger's impact, just as they have with the Air Line Pilots at both carriers, where the two sides reached pre-merger agreements.
The Machinists and Flight Attendants are the two largest unions at Northwest, which is virtually wall-to-wall union. IAM represents ramp agents, ground workers and other personnel, while another union, the Aircraft Mechanics Fraternal Association, represents the mechanics. Northwest pilots belong to ALPA, which also represents Delta pilots – the only unionized group at Delta.
AFA represents Northwest's flight attendants and recently lost a second election at Delta after a vicious anti-union campaign there which persuaded a majority of its flight attendants not to cast ballots.
Under the separate federal law that governs labor-management relations at airlines and railroads, the union must win a majority among all workers in the potential bargaining unit – not just a majority among those who vote. That means an unreturned ballot is counted as a "no." In the May 28 tally at Delta, AFA-CWA got 39.2%, other unions got 0.8% – but 60% of Delta flight attendants, influenced by the airline's campaign, didn't vote, so the union lost.
If a merger occurs, the unions at Northwest would face the daunting task of winning representation votes among the employee groups at the newly combined carrier.
If AFA-CWA is ousted after Delta takes over, the flight attendants there could see their pay cut, their benefits slashed, and their pensions gone, Friend said.
The peril to pensions was Roach's main theme. He traced the history of prior airline mergers, saying that in only one case, Continental, did management reverse course and talk with the unions to smooth things over. At other carriers, including United and US Air – and when they were bankrupt, Northwest and Delta – the carriers dumped pension liabilities on the federal Pension Benefits Guaranty Corp., he noted.
Management witnesses told lawmakers that wouldn't happen with this merger, because it would leave the combined airline financially healthy, they claimed. They also reiterated that "no front-line employees" would be laid off due to the merger.
This article was written by Press Associates, Inc., news service. Used by permission.
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