Machinist Union Weathers the Storm

Having survived airline setbacks, the International Association of Machinists thrives.
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It is said that in the event of a nuclear holocaust, only Cher and cockroaches will have enough resilience to survive.

Perhaps the International Association of Machinists should be added to the list.

Over the past five years, in a wave of downsizing triggered by a slowing economy, the rapid growth of low-fare carriers and the 2001 terrorist attacks, the airline industry has shed 155,000 jobs. The IAM lost 40,000 of those, and also signed a series of concessionary contracts in bankruptcy court, where a company can revise labor contracts that hinder its reorganization.

But the union also recorded its share of victories. In an age of defined-contribution 401K retirement plans, it preserved defined-benefit pension plans at

Northwest Airlines



United Airlines



US Airways


. It staged a successful strike at


(BA) - Get Report

. And last month, it added 3,400 new members at US Airways.

The IAM also benefited from comparison with a rival union, the Aircraft Mechanics Fraternal Association. AMFA replaced the IAM as representative of Northwest's mechanics after a bitter 1998 election. Last year, AMFA staged a disastrous strike that caused nearly all of its members to lose their jobs.

Now, as the industry's post-bankruptcy era gets under way, the IAM seems poised to negotiate from relative strength. It has about 730,000 active members including about 100,000 in the airline industry, the most of any union.

In bankruptcy, the IAM "managed to have a sensible defense in a bad situation, in contrast to the suicidal offensive effort that AMFA carried out," says Thomas Kochan, professor of work and employment relations at MIT Sloan School of Management. "The AMFA situation illustrated the cost of a union coming along and arguing that it can do better than any other union."

The IAM is now "in a good position to insist that there be a fair sharing of whatever gains come forward in the industry," Kochan says. "It can now reach out and say to companies: 'You can't get there without us, we need to work together to look for productivity and service quality enhancement and to bring about a

sustained recovery.'"

Aviation consultant Robert Mann said the IAM has shown resilience, but may have difficulty improving post-bankruptcy contracts. "It's going to be a tough slog through management's

insistence that it doesn't want anything to change," he says.

The union's advantages became clear over the past 15 months.

Success at United

In July 2005, about 16,000 United agents, ramp workers and stock clerks, represented by the IAM, approved a new contract with $700 million in wage and benefit reductions. But the contract, which runs through 2009, includes a defined-benefit pension plan, which no other United workers have.

In negotiations, the IAM insisted the airline contribute to its fully funded $8 billion pension plan, which covers 75,000 workers at 1,700 companies, plus 69,000 retirees. Though it won't contribute any more than would have gone to the 401K plan it favored, United resisted.

"United was getting ready to abrogate the

old contract," says Robert Roach, IAM general vice president. "They were afraid of what the other unions would say if we had a pension plan and the others did not. But we told them we must have the pension plan or we would shut the airline down."

Another Chance at Northwest?

In August 2005, about 4,000 AMFA mechanics, cleaners and custodians struck Northwest. The airline's final offer was to cut back to 2,750 mechanics, to cut those mechanics' salaries by 25%, and to provide up to 26 weeks of severance and benefits for workers who lost jobs.

Today, Northwest employs 880 mechanics. The workers who are gone did not collect severance or benefits.

Northwest mechanics had ousted the IAM in a bitter 1998 union election, after the IAM negotiated a concessionary contract. In 2001, AMFA negotiated its first contract. Salaries rose, but AMFA traded off the ability to outsource up to 38% of its work. Over the next four years, about 5,000 of Northwest's 9,795 AMFA members lost their jobs, partially as a result of industry downsizing.

AMFA made three critical mistakes, IAM's Roach says. It isolated itself from other unions on the property, saying it didn't need them. In 2005, those unions didn't honor picket lines. AMFA allowed work to be outsourced, paving the way for more outsourcing. And after members voted to authorize a strike, AMFA leaders decided to strike without a second vote on the final proposal, which is a routine procedure at the IAM. "They should have seen the handwriting on the wall and negotiated a contract," Roach says.

The IAM still represents about 12,000 Northwest agents and ramp workers. Some of the mechanics who remain at the airline have talked to the IAM about a union election, Roach says, as have United mechanics who joined AMFA in 2003.

More Wins at Boeing, USAir

In September 2005, the 18,300 IAM mechanics and production workers at Boeing staged a monthlong strike and got what they wanted: a guaranteed pension and continued health benefits. "Boeing was forced to shut down because of solidarity and the numbers that we had," says union spokesman Joe Tiberi.

"When we struck Boeing, the company wasn't hemorrhaging money," Tiberi says. "It was profitable, which gave us a chance to use all the resources that a strong union has."

This month, the IAM gained 3,400 members at US Airways, a result of the merger between the former US Airways and America West Airlines. America West fleet service workers were members of the Transport Workers Union, but joined the IAM rather than risk decertification in a union vote. The Teamsters represented America West mechanics, but did not get enough support to hold an election.

Now the IAM is negotiating transition agreements. Under the Teamster contract, heavy maintenance was farmed out to third-party contractors. Under the IAM contract, most heavy maintenance is done in-house.

"We are looking to get some work back," Roach says. "Once these transition agreements are completed, it will require several hundred mechanics to be recalled. Salary is also part of it, of course, but salary is meaningless if you don't have job security to go with it."