iMail for Tuesday, June 3, 2008

Shareholders Urged to Scuttle NWA-Delta Merger

The IAM sent letters this week to the largest shareholders of Northwest Airlines and Delta Air Lines to express serious concerns over the proposed Northwest-Delta merger.

“I urge shareholders of Delta and Northwest to protect their interests and speak out to oppose this proposed merger,” said IAM President Tom Buffenbarger. “In addition to my concern with the treatment of employees in the proposed merger, I also believe that this transaction destroys shareholder value by combining two vastly different entities with few expected synergies.”

Among the financial hurdles that the combined airline would face is a crushing long-term debt burden of $15 billion. Additionally, the proposed merged company would have a serious lack of liquidity with a working capital deficiency of $1.03 billion. Moreover, pension deficits would amount to an unfunded pension liability of over $7 billion. Since the merger was announced, Northwest stock has lost 41 percent of its value and Delta stock has lost 44 percent of its value.

“To date, Delta and Northwest have failed to provide shareholders with a convincing argument that consolidation would increase shareholder value,” said Buffenbarger. “The checkered history of airline mergers since deregulation has shown us that they inevitably result in disgruntled customers, turmoil within the workforce, and diminished returns.”

Local 2003 Test Pilot Wins Reinstatement

Brian Buchanan, a member of Local 2003 in Daleville, AL, is being reinstated as a helicopter test pilot for Army Fleet Support (AFS) at nearby Fort Rucker, AL, after an arbitrator ruled he was wrongfully terminated for misreporting safety violations.

Despite a spotless record since joining AFS in 1998, Buchanan, who also serves as a Local 2003 Shop Steward, was fired in November 2007 for allegedly misreporting safety violations. According to District 75 Business Representative Tony Blevins, the company targeted him because he was a union steward and wanted to make an example of him during a transition from Army regulations to FAA regulations.

“We were dealing with Army regulations, FAA regulations and contract language,” said Blevins, who handled the complicated grievance. “We had very good witnesses that did an excellent job of explaining our case. We had a great deal of expertise in the matter, and it paid off.”

The grievance went all the way to the final step where an impartial arbitrator ruled Buchanan was using his best judgment as an experienced test pilot and ordered the company to return him to work with full back pay, an amount with overtime that could be as high as $85,000.

New Law Would End Passport Outsourcing

The IAM/National Federation of Federal Employees (IAM/NFFE) is endorsing H.R. 5752, legislation that would end the foreign manufacture of U.S. passports and require the travel and identity documents be manufactured in the United States. 
H.R. 5752 was introduced in the House of Representatives after it was revealed that the Government Printing Office (GPO) had outsourced the manufacturing and assembly of the U.S. passport book cover and security components to a company operating in Europe and Thailand.

The news that passport book covers had been outsourced to foreign companies was met with widespread outrage in editorial pages and blogs. A March 28, 2008, Washington Times Editorial stated that the “annals of incompetent federal empire-building have a new entry: the Government Printing Office’s e-Passport program.”  The Times called this a “disastrous, almost incomprehensible failure” in passport security, noting that “[t]he assembler and patent-holder, Netherlands-based Smartrac Technology Ltd., ‘divulged in … October 2007 … that China had stolen its patented chip technology for e-passport chips’.”  The Times argued that “[b]lank passports are a free ticket to entry into the United States.” 

“The off-shoring of this critical government function is absolutely shocking,” said Colin Walle, president of IAM/NFFE Local 1998, a nationwide passport local.  “We go to great lengths to ensure the integrity of the U.S. Passport.  It makes no sense to open a Pandora’s Box of safety concerns by manufacturing passport books and security features in foreign countries.”

Passage of H.R. 5752 would address these concerns by requiring that U.S. passports be manufactured domestically. For more information, visit

Arizona Local 933 Scores $72K Wage Settlement

Fifty members of Local 933 in Tucson, AZ, will divide a settlement of more than $70,000 after DBR Jim Watson resolved a contract dispute over pay rates at Raytheon Missile Systems.

Members of the local lodge challenged the company’s method of calculating General Wage Increase amounts and base rate minimums following the ratification of a new agreement in early 2007. The grievance settlement is retroactive to July, 2007.

“The union disagreed with the way Raytheon implemented the contract language, so we used the grievance procedure to make our case,” said DBR Watson. “I look forward to working with Raytheon to resolve our other outstanding issues, as well as pursuing common goals like our safety initiatives while continuing to build the best products in the defense industry.”

“I’m very appreciative of the efforts the IAM made on our behalf,” said Local 933 member Roger Kirby, a Production Test Technician who benefited from the grievance settlement.  I didn’t realize the work they were doing behind-the-scenes and I’m really pleased about it.”

“This is a prime example of the value of a collective bargaining agreement with a strong grievance procedure,” said Western Territory GVP Lee Pearson. “Congratulations to DBR Watson for his first-rate efforts.”

Raytheon Missile Systems in Tucson, AZ, produces the Tomahawk missile and other weapons systems.

Mike Rose Joins Organizing Department

Woodworkers District Lodge 1 Organizer Mike Rose has joined the IAM Organizing Department staff as a Special Representative. The appointment is effective June 1, 2008. “We’re pleased to welcome Mike to the Organizing Department. He has been doing a great job at District 1 and he is a great addition to our organizing efforts,” said IAM President Tom Buffenbarger.

Rose joined the International Woodworkers (IWA) of America in 1980 after being hired at International Paper Company in Reedsport, OR, where he served as shop steward and chief steward. After the IWA merged with the IAM in 1994, Rose became a Business Representative for Local Lodge W-261 in North Bend, OR, until 1998 when he became an Organizer for Woodworkers District Lodge W1 in Gladstone, OR.

Senate Votes to Extend Unemployment Benefits

Ignoring a veto threat from the Bush administration, the Senate last week voted overwhelmingly to extend unemployment benefits for the long-term jobless. More than 200,000 workers a month exhaust their unemployment benefits and roughly 3.5 million workers will lose their unemployment insurance this year.

With many workers struggling to find jobs, the extension offers much needed support. A report released by the National Employment Law Project found the Unemployment Insurance funds of several states are not solvent enough to weather a recession. The report, Unemployment Insurance Financing: Examining State Trust Funds Facing Recession, found current state UI reserves are only about half the levels recommended prior to a recession. In fact, the report says Michigan, Missouri, New York and Ohio, which have been hit hard by the decline in manufacturing jobs, could have trouble meeting the need for UI benefits as early as this year.

Share and Follow: