Machinists Union on Edge About Airline Deals
The country's largest airline union is poised to oppose any mergers in the industry, starting with the possible combination of Delta Air Lines (DAL) and Northwest Airlines (NWA), which could potentially reduce the number of workers represented by organized labor.
"We think part of the thinking here is that they could de-unionize the transportation labor movement," says Robert Roach, general vice president of the International Association of Machinists, in an interview. "Additionally, we think that mergers adversely affect the flying public."
The IAM represents 110,000 employees at a variety of airlines, including about 11,000 agents and ground service workers at Northwest, where it is the largest union. By contrast, pilots are the only major labor group at Delta with union representation.
In general, "mergers mean a loss of air service in many areas, an increase in fares and multiple problems for workers," Roach says. "While the purpose of airline deregulation was to increase competition, they want to reduce competition."Workers, both represented and unrepresented, could face "layoffs at locations where there will be no opportunity to return to work, and representation elections in combination with groups of people who may or may not want a union, which could be very disruptive," he says. "These are the same employees who sacrificed hundreds of millions of dollars to keep these airlines flying," Roach adds. "Now the airlines are taking advantage to merge with others and enhance their executives' stock options." Roach says he plans a vigorous lobbying effort to prevent the Delta and Northwest merger, including meetings with U.S. Representatives Shelia Jackson Lee, D-Texas, and James Oberstar, D-Minn., and with staffers for Sen. Ted Kennedy, D-Mass. Additionally, he will meet Thursday with representatives of the Association of Flight Attendants, the Air Line Pilots Association and the Transit Workers Union to formulate a joint strategy to deal with consolidation. The unions have no formal right to approve or prevent a merger. The difficulties are clear from the most recent airline merger, which combined US Airways (LCC) and America West in 2005. To date, not a single combined contract has been signed by any of the airline's major unions, Roach notes. In fact, many US Airways pilots are threatening to leave ALPA and form a new union because of a questionable seniority ruling that would force hundreds of pilots with 15 years or more in the cockpit to become junior to pilots employed by the company for only a few years. "The US Airways situation has been very disruptive, but it is not atypical," Roach argues. "I'm not aware of any airline merger in my 30 years that went smooth and worked effectively." The IAM is the largest union at US Airways, with 10,300 members including fleet service workers and mechanics. Were Delta and Northwest to combine, it is conceivable that the IAM would continue to represent workers, but that would depend on an election involving employees from both airlines. Roach says he has been unable to ascertain Delta's views and Northwest has not kept the IAM informed of the progress of merger talks. "We are the certified bargaining agent," Roach says. "We should be kept informed."
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV