Northwest, Mechanics Hold Ground

The airline has been released from mediated talks with its mechanics union.
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Northwest Airlines

(NWAC)

confirmed Wednesday that federal mediators have released it from mediated talks with its mechanics.

The decision by the National Mediation Board means that a 30-day "cooling-off" period has begun. If Northwest and the Airline Mechanics Fraternal Association don't agree on a new contract by 12:01 a.m. EDT on Aug. 20, then the union can strike and the airline can put replacement mechanics to work.

Northwest shares rose 21 cents, or 4.5%, to $4.84.

On Tuesday, AMFA said its Northwest members

overwhelmingly voted in favor of allowing their national leader to call a strike at the end of the cooling-off period.

"Northwest Airlines wants to continue to work with AMFA negotiators to reach a consensual agreement that provides wage and benefit levels that are fair to our employees while allowing Northwest to stem its record operating losses," said Andrew C. Roberts, the airline's executive vice president of operations, in a news release.

The airline says it needs $176 million in annual savings from its mechanics in order to remain competitive with rivals. If talks fail, the airline says it's prepared to fly through a strike.

AMFA says the airline has refused to bargain in good faith by refusing to budge from its original offer to the union.

"Northwest executives gambled recklessly from the start, by dismissing the whole negotiating process and wasting the NMB's and our time," said O.V. Delle-Femine, the union's national director, in a news release. "By refusing to budge from their unreasonable initial offer, they made a consensual agreement impossible and forced the process toward a strike."

The union statement continued, saying that "Northwest compounded this arrogance by rejecting the NMB's offer of binding arbitration in a letter last week on the disingenuous grounds that 'the company is committed to reaching consensual agreement with AMFA.' How can you reach consensual agreement while refusing to negotiate?"