Looks like a demonstration of "the reserve army of the unemployed...."
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Using Temps Proves Potent At Northwest
29 August 2005The Wall Street Journal
B1
A LITTLE OVER a week into the first major strike at a U.S. airline in seven years, the battle between Northwest Airlines and its mechanics union is shaping up to be a case study on the potency of substitute workers in today's labor market.
On one side is the nation's No. 4 airline, financially hemorrhaging and so determined to wrest 25% wage cuts from its workers that it spent tens of millions of dollars and 18 months preparing for a strike that might never have materialized.
On the other side is a small union that grew over the past decade largely by fomenting dissent at rival unions and then nabbing the discontents. Even though it alienated its labor brethren, the mechanics union was convinced it could cripple the airline in short order, partly by undermining public confidence in Northwest's safety. Union officials have derided the substitute mechanics as "understaffed and undertrained" workers who "won't even know where the tools are."
But with people fretting about job security -- particularly American jobs being outsourced abroad -- this strike highlights the emergence of a new threat in labor disputes: the homegrown replacement worker more beholden to the pocketbook than to any lofty principles of organized labor.
Replacement workers have always been used to beat union strikes. In the early part of the 20th century, employers sometimes took advantage of the animosity between immigrant groups, hiring workers from one group to replace strikers from another. In the 1980s, President Ronald Reagan stepped in to keep the public flying, famously firing thousands of striking air-traffic controllers and dispatching replacements to the control towers.
The Northwest battle is being closely watched, though, as the labor movement finds itself at a crossroads, trying to stem several decades of declining membership across broad areas of the work force, as well as internal divisiveness.
After eight days, Northwest is clearly winning -- and may well break the strike if things keep going its way. Northwest said Friday that its flight-cancellation rates and the number of planes out of service have recovered to levels it considers acceptable. On Friday, the airline was able to complete about 98% of its schedule. A chart it provided yesterday showed normal operations.
"We're very comfortable with where we sit right now," says Andy Roberts, Northwest's executive vice president of operations. And in recent days, the company has been vocal about the fact it is considering taking on the temporary workers permanently, adding that striking mechanics are still welcome to come back to work if they accept Northwest's new terms.
The relative stability of Northwest's operations could change quickly, however, if any accident is caused by a maintenance error and travelers become reluctant to fly the carrier.
Many think a clear victory by the airline could result in more aggressive tactics by companies. "The success that Northwest is having will embolden companies to be more aggressive in using replacements in the future," says John Budd, professor of human resources at the University of Minnesota.
Some striking mechanics have been surprised by how seamlessly their jobs have been filled by an alternate work force. "I would have hoped there would be more airplanes grounded and not flying," says Terry Koons, a 50-year-old aircraft maintenance technician in Detroit who worked for Northwest for 18 years and is a member of the Aircraft Mechanics Fraternal Association, or AMFA.
As a result of the strike, Mr. Koons, who lives in Riverview, Mich., says he missed a $1,300 mortgage payment this month, and isn't sure how he will pay car insurance bills for his two daughters, ages 18 and 20. He has canceled the cable TV and shut off the air conditioning. He says he thought Northwest's use of replacement workers and uncompromising stance toward AMFA signaled a new level of hardball tactics toward unions. Companies "have never been this aggressive toward the labor movement, not for many, many years," he says.
Efforts to use replacement workers recently have been mostly in the manufacturing sector at companies such as Caterpillar Inc., the Bridgestone/Firestone subsidiary of Japan's Bridgestone Corp., and copper-mining company Phelps Dodge Corp. Most were defeats for labor, but took place out of the public eye. Experts say the Northwest case could have a far greater impact because the company is pulling it off in full view of the public and other unions.
Yet some observers say Northwest's ability to withstand the strike by AMFA occurred under unique circumstances that won't have broad application for future labor disputes in and out of the airline industry.
"Northwest has been able to exploit the perfect storm," says Henry Oechler, a partner at New York-based law firm Chadbourne & Parke, who has represented airlines during mergers and labor disputes. In this case, he says, the situation involved a large number of available and eager replacement workers, a critical financial situation that strengthened the company's bargaining hand, and other unions that understood the company's financial distress and had no loyalty to the striking union.
That means the situation at Northwest differs from the car industry's, for example. Unlike AMFA, which represented 16,000 mostly mechanics at eight airlines prior to the strike, the United Auto Workers, or UAW, represents 622,000 workers who handle a wide variety of jobs at auto makers such as General Motors Corp. and Ford Motor Co., complicating the hiring of replacement workers. In addition, the UAW has more funds available to weather a strike, compared with AMFA, which had no strike fund. Last week, the cash-strapped mechanics union was soliciting donations on its Web site.
Most importantly, however, most unions, including the UAW, have a strong history of solidarity and of marshalling political and public support, and the recent disaffiliations of three major unions from the AFL-CIO last month isn't likely to change that any time soon, say labor experts. "Those are not easy picket lines to cross," says Marick F. Masters, a professor of business administration at the University of Pittsburgh.
It is now clear that AMFA misjudged Northwest's ability to find and train substitutes who have the same skills as its members. Pilots at Northwest, on the other hand, almost certainly could have shut down the company on their own, and if they had joined AMFA, the mechanics would have probably prevailed quickly. The pilots had already concluded negotiations with the company and agreed to wage concessions.
O.V. Delle-Femine, AMFA's national director, says he believes the replacement mechanics will make mistakes that will affect Northwest's performance. "A strike takes some time," he says. "It's going to be a couple of weeks and I feel confident that sooner or later they will do something."
Mr. Delle-Femine says he doesn't believe the union could have used a different strategy against the company. "I think they wanted this strike to use it as an excuse to file bankruptcy before Oct. 17, so that they can get rid of the pension plan," he says, referring to the date when the new federal bankruptcy law takes effect. A strike fund would have been a waste of money because he's never seen one intimidate a company, he adds.
Northwest also shrewdly worked lingering wounds inflicted by AMFA to its advantage. Members of the International Association of Machinists, or IAM, union still bitterly remember AMFA's campaigns in the late 1990s to sign up mechanics at Northwest who belonged to the machinists, and the enmity is the main reason AMFA has received virtually no support during the strike.
Bobby De Pace, president of the Machinists district 143 in Minneapolis, says that baggage handlers and ramp workers in his union were derided as "knuckle draggers," "bag smashers," and worse, when AMFA courted its mechanics. "Our people haven't forgotten that," he says.
And Northwest wasted no time in courting the IAM. Just 45 minutes before the strike began, according to the IAM, the union's general chair received an email from Northwest's labor counsel, explaining that IAM members would be taking over some tasks, such as taxiing and towing planes, that had belonged to the mechanics union. When AMFA asked for support in its strike, leaders of the IAM, whose members are also in concessionary bargaining with the airline, decided it wasn't in their best interest to honor the picket line.
After losing about $4 million a day in the first half of the year because of high labor costs and record fuel expenses, Northwest says it needs at least $1.1 billion in total annual labor concessions.
The carrier said it could field about 1,900 mechanics, including 1,200 newly hired workers, more than 300 management employees trained to act as mechanics, and 400 workers at outside vendors. Replacement workers are paid $26.53 an hour, below Northwest's final offer of $27.28 an hour to AMFA. Before the strike, top mechanic pay was $36.39 an hour.
Now that the company is in a position to permanently hire replacement workers, many AMFA members are feeling increasingly desperate. Sandy Porter, a 41-year-old Northwest Airlines airplane cleaner who has worked for the company for 13 years and is walking the picket line with her 11-year-old daughter, Cassidy, expects her last paycheck Sept. 2. In its final offer to the union, Northwest said it wants to furlough all 875 aircraft cleaners and custodians. "It's wearing thin on all of us," Ms. Porter says of the strike. "I've started to look for a new job, to be honest."
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