Northwest Airlines Defaults on Pension Payments

Northwest Airlines last week defaulted on a required $65 million payment to pension plans covering more than 14,000 IAM members at the carrier. Northwest's pension plans are underfunded by $3.8 billion, and the bankrupt airline indicated it intends to freeze its current plans and replace them with a follow-on plan.

District 143 Representatives traveled to Washington, D.C. this week for meetings with Transportation GVP Robert Roach, Jr. and other Grand Lodge officials, our labor and bankruptcy attorneys, economists and representatives from the Pension Benefit Guaranty Corporation (PBGC) to discuss pensions and bankruptcy.

The PBGC officials provided an overview of the pension insurance program, detailing how the agency administers terminated pensions and processes claims. District 143 will provide the PBGC a series of questions specific to IAM members at Northwest Airlines and distribute their responses to the membership.

The IAM has developed a series of videos that discuss both the bankruptcy process and provide important information about pensions and the PBGC. Both are available on the Grand Lodge website at www.goiam.org/transportation. 

Unemployment Swells in Katrina's Wake

Hurricane Katrina's devastation continues to profoundly impact American workers as 398,000 workers filed initial claims for state unemployment benefits during the week ending September 10. The Labor Department reported a 71,000 increase from the previous week, making it the largest one-week increase in the number of unemployment insurance claims in more than nine years.

The number of workers filing for unemployment assistance is expected to increase even further in the coming weeks as Katrina evacuees begin to receive their last paycheck and are advised on filing for assistance by relief workers.

In response to the large number of evacuees who will need more substantial assistance due to the scope of Katrina's devastation, the National Employment Law Project has called on Congress and the Bush administration to make major improvements to federal Disaster Unemployment Assistance.

As it stands now, most families will not receive federally-funded Disaster Unemployment Assistance due to major federal restrictions adopted in the 1980's. Instead, they will be forced to rely on unemployment benefits from Louisiana, Alabama and Mississippi, which pay the lowest benefits in the country.

"Today's jobless claims are a poignant reminder of the crippling impact of Hurricane Katrina on jobs and the community," said Maurice Emsellem, Policy Director of the National Employment Law Project. "We urgently need a federal response to the disaster that includes major improvements to the Disaster Unemployment Assistance program."

A happy family, ATT Driver Alfred Johnson, center with white t-shirt, is reunited with his daughter Ronnette after they were separated during the evacuation of New Orleans. Joining Johnson are other family members and LL 641 President Phil Calloway, far right, LL 641 Vice President Steve Campbell, second from right, and GLR Paul Morris, third from right, who helped reunite the family.

Machinists Display Competence and Compassion

In the wake of Hurricane Katrina's devastation, many IAM members are dedicating their time and skills to relief efforts. Nearly 4,500 IAM/NFFE-represented employees from the Forest Service Council are providing management and support services in the battered Gulf Coast area.

IAM members are getting supplies into the disaster area, providing security for New Orleans and surrounding areas, managing evacuee centers, providing transportation services, conducting rescue and body recovery efforts and much more.

Meanwhile, the storm that struck on August 29 continues to generate remarkable stories. When Alfred Johnson, an IAM driver for Auto Truck Transport, was forced to evacuate his New Orleans home and then separated from his son and daughter, IAM members pitched in to help reunite the displaced family.

While Johnson made his way to a shelter in Atlanta, GA, his daughter was transported to a Raleigh, NC shelter after being plucked by helicopter from a New Orleans rooftop. When news of the family's plight reached Local 641 President Phil Calloway and Vice President Steve Campbell, they quickly volunteered to drive Johnson's daughter from Raleigh to Atlanta. With a donated van from their employer, Rolo Shuttle, father and daughter were reunited.

The generosity of IAM members did not end there. Grand Lodge Representative Paul Morris later accompanied Johnson to the monthly meeting of Local 709 in Marietta, GA, where IAM members made a generous donation to the family.

Oil Prices in Largest One-Day Spike

Crude oil prices saw their largest one-day spike earlier this week, jumping $4.39 to reach $67.39 per barrel. Fear that oil refineries in Houston may be shut down if Tropical Storm Rita makes landfall there later this week spurred the increase. Four major refineries near New Orleans are still shut down due to the devastation of Hurricane Katrina and additional closures could wreak havoc on consumers.

While gas prices have eased slightly since peaking at $3.057 over the Labor Day weekend, the $4 dollar surge in oil prices will likely cause another significant increase in prices. Meanwhile, if oil continues to hover at sky-high prices, Americans will be stuck with massive heating bills this winter.

The Organization of the Petroleum Exporting Countries, meanwhile, is expected to announce plans to allow its members to provide an extra two million barrels of oil a day "if the market needs it".