Machinists at NWA to Vote on Bankruptcy Pact

January 24, 2006 – IAM members at Northwest Airlines are preparing to vote on a settlement proposal that rejects a two-tier wage schedule, preserves thousands of jobs and provides a defined benefit pension plan in place of the 401(k) replacement plan sought by the airline.

The proposed 4-year contract also preserves cargo jobs in 10 locations, protects sick leave and dramatically scales back company proposals to cut holidays, vacation time and health care coverage. The IAM represents 14,500 employees at Northwest Airlines.

Under the agreement, the 19 percent wage cut imposed by the bankruptcy court will be replaced by an 11.5 percent pay cut and allow for expanded use of part-time workers.

If approved, the agreement will also suspend the IAM’s involvement in the 1113c trial currently underway in a New York City bankruptcy court. Northwest filed a motion to dissolve any contract not replaced by ratified cost saving contracts.

In a letter to members at NWA, the District 143 Negotiating Committee acknowledged the dire financial condition of NWA and the high stakes for the ratification vote. “After a review of the company’s books by our financial advisors, it has been determined that Northwest Airlines is in an extremely desperate financial situation.”

The committee indicated it was a “near certainty” the judge would abrogate IAM contracts if the membership rejected the proposal. Voting is expected to take several weeks following informational meetings to explain contract terms and answer members’ questions.