November 2, 2005 - Northwest Airlines has filed a motion in bankruptcy court announcing its intention to seek modification of retiree medical benefits for existing and future retirees and asking for the United States Trustee to form a committee to represent retirees.
The committee is known as a Section 1114 Committee after the portion of the bankruptcy code that allows retiree benefit modifications. Northwest’s motion is limited to the formation of a Retiree Committee.
“The company has not yet filed a Section 1114 motion to change retiree medical benefits, but it is clearly their intention to negotiate modifications or seek court imposed changes,” said District 143 President Bobby DePace “What changes they may seek are not yet known.”
Labor unions are not required to represent their retirees in Section 1114 proceedings, but the Machinists Union has elected to use its considerable resources to defend the interests of IAM retirees. The United States Trustee will appoint retirees to represent non-union retirees and members of unions that choose not to participate in Section 1114 proceedings.
“Retirees depend on their earned pension and benefits to survive,” said DePace. “They are the single most vulnerable employee group, and the least able to absorb increased costs.”
A hearing on Northwest’s motion is scheduled for November 16, 2005. Information about the Section 1114 process is available on the District 143 website, www.iam143.org.
