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Northwest Ground Workers Asked for More

The bankrupt airline is looking for $190 million in annual wage and benefit cuts from the group.
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Updated from Sept. 27

Northwest Airlines

(NWACQ)

, which hopes to use Chapter 11 to cut costs and streamline its fleet, is now asking ground workers for $190 million in annual wage and benefit cuts.

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The target is higher than the $107 million the airline had been seeking from the International Association of Machinists and Aerospace Workers before it filed for bankruptcy protection on Sept. 14.

Northwest was expected to ask its workers for even larger sacrifices, having recently increased its overall annual labor savings goal to $1.4 billion from $1.1 billion to help offset surging jet fuel costs.

The carrier says a post-Hurricane Katrina spike in the cost of jet fuel forced it to seek bankruptcy protection. The carrier for some time has tried to reduce its labor costs, which are among the industry's highest, and get relief from looming payments to its traditional pension plans.

Northwest and

Delta Air Lines

(DAL) - Get Report

, which filed for Chapter 11 on the same day, have been pressing lawmakers for more time to fund their pensions, but the airlines could seek to use bankruptcy to pass their obligations to the government, a tactic employed by

United Airlines

, a unit of

UAL

, and the old

US Airways

.

Documents from Northwest dated Sept. 26 outlining its latest offer to the union were posted on the Web site of IAM District 143, which represents some 14,200 Northwest equipment service, clerical, passenger service and flight simulator workers.

The documents included a letter from Northwest's head of labor relations, Julie Hagen-Showers, stating that if the airline can't reach an agreement with the IAM in the "short run" it will be forced to ask the bankruptcy court to cancel the union's existing contract.

Northwest's offer includes pay cuts of 12.5% from many IAM members, along with a reduction in the number of paid holidays and changes to medical plans. A Northwest representative confirmed the accuracy of the documents posted on the IAM site.

Joe Tiberi, an IAM spokesman, said the union was still reviewing the airline's proposal and had yet to formulate a response.

Northwest shares, which tanked in the run-up to the airline's bankruptcy filing, were trading 3 cents higher at 66 cents Wednesday.

Although the shares will continue to trade while Northwest operates under bankruptcy protection, they will likely end up worthless. In most airline bankruptcies, carriers cancel their existing shares when they exit Chapter 11 and issue new stock to pay creditors.