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Northwest Has Union Deal

The airline reaches tentative terms with the Aircraft Mechanics Fraternal Association.
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Northwest Airlines

(NWACQ)

said Monday that it has reached a tentative agreement with the Aircraft Mechanics Fraternal Association, putting a formal end to a disastrous 14-month-old strike that resulted in the loss of hundreds of mechanics' jobs.

The tentative agreement provides strikers with the ability to collect severance pay. It also provides them with the option to accept layoff status and receive one week of layoff pay per year of service, up to a maximum of five weeks, or to leave Northwest and receive one week of severance pay per year of service, up to a maximum of 10 weeks.

Employees accepting layoffs will be entitled to remain on furlough status for two years. They may bid on open mechanics' jobs.

About 4,000 AMFA mechanics, cleaners and custodians struck the fifth-largest airline in August 2005. Northwest's final offer was to cut back to 2,750 mechanics, to slash salaries by 25% and to provide up to 26 weeks of severance and benefits for workers who lost their jobs.

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Northwest now employs about 880 mechanics, with much of its maintenance work farmed out to third-party contractors. The strike had a minimal impact on the airline's operations.

Of the four legacy airlines that have sought bankruptcy court protection since the September 2001 terrorist attacks, Northwest has had the most difficulty in reaching contract agreements with its workers. Although it has signed contracts with pilots, agents and ramp workers, it also endured the mechanics' strike and remains locked in battle with its flight attendants.

Nevertheless, the airline says it has met its goal of achieving $1.4 billion in annual labor savings.

Flight attendants are working under an imposed contract while fighting a court battle over whether they have the right to strike the carrier. Additionally, they are negotiating under the auspices of the National Mediation Board, with talks set to resume the week of Oct. 16.

In mediation sessions last month, the Association of Flight Attendants argued that the board should impose a 30-day cooling off period. "No proposals were exchanged during the conference, and the federal mediations determined that additional mediation sessions are warranted," the union said in a report to members.

The airline is expected to issue new stock when it emerges from bankruptcy protection next year. Northwest's existing stock, which will be worthless, would be delisted.