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Northwest Maintains Advantage in Strike

The airline implemented a contingency plan and isolated the mechanics union.

August 29, 2005
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Northwest Airlines has kept its planes in the air and pretty much on schedule during a mechanics strike by hiring replacement workers. The carrier’s tactics, although used in a unique situation against an isolated union, demonstrate why HR professionals might want to consider domestic labor markets instead of offshoring to meet their workforce needs.

During the 18 months preceding to the August 20 strike declaration by the Aircraft Mechanics Fraternal Association, the airline executed a comprehensive contingency plan involving the recruiting and training of 1,200 unemployed mechanics to step in when 4,500 AMFA technicians walked off the job. AMFA is striking to protest the $176 million in savings Northwest is seeking from mechanics in an effort to slash costs and stay in business.

So far, the airline has avoided television pictures of stranded passengers. Northwest, which is operating about 1,400 flights a day, stated that 99.5 percent of its passengers reached their final destinations on August 23. But an analysis by Joe Brancatelli posted at JoeSentMe.com asserted that Northwest completed an average of 52.7 percent of its flights on time from August 20 to 24. AMFA warned that delays and cancellations will spike as the understaffed mechanics group tries to maintain the company’s aircraft fleet.

Northwest is dodging the strike bullet in part because it is battling a union whose independence has undermined sympathy from its labor brethren, says Richard Hurd, professor of industrial and labor relations at Cornell University.

The airline’s approach might be effective with mechanics but might not work with pilots and flight attendants.

“I don’t see it as any type of dramatic breakthrough,” Hurd says. “It’s a specific situation with a particular union at a particular point in the company’s history.”

Another expert argues that Northwest has achieved something significant.

“This marks a new chapter in business response to unions,” says Peter Morici, a professor in the Robert H. Smith School of Business at the University of Maryland. When a company goes bankrupt, it wipes out both investors and unions. “What Northwest is trying to do is save the shareholders,” he says.

It's doing so by tapping a labor market close to home‑‑mechanics who have lost their jobs as airlines struggle to survive.

In the Northwest case, “there’s a readily available pool of workers here who have the skills, can be trained and are happy to have a job even though it pays less than union wages,” says Scott Golas, an outsourcing consultant with NelsonHall in Chicago. “There might be a lesson for both unions and human resources professionals overseeing workforces.”

Northwest’s approach has some parallels to a company finding inexpensive domestic personnel through rural sourcing, Golas says. Establishing call centers in small U.S. communities with highly skilled workers--like college towns--can reduce costs while avoiding the management burdens and customer alienation associated with offshoring.

The Northwest strike also demonstrates that small, isolated unions need to develop new alliances. “If I were a union leader, I would be placing phone calls and trying to repair fences right now,” Golas says.

Morici goes further in his warning to unions. “This week organized labor ceased to be a major force in American life,” he says. “Workers no longer rely on union halls to find jobs and no longer need employers and union programs to acquire skills.”

--Mark Schoeff Jr.

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