Northwest Says It Also Will Not Pay Severance in Layoffs
As Democratic congressional leaders and President Bush discussed a relief package for laid-off airline workers Tuesday, Northwest Airlines Corp. said it will not honor the standard severance provisions of its labor contracts as it lays off 10,000 workers.
A day earlier, AMR Corp.’s American Airlines, which plans to cut 20,000 jobs, said it had invoked an emergency clause in labor contracts that allows employers to avoid paying severance and other benefits.
“It’s for very much the same reasons that American described,” said Northwest spokesman Kurt Ebenhoch. The severance-package cuts are part of an effort to make Northwest “a viable company so we can protect the 43,000 employees we still have and have a company that is able to recall all of these employees when things recover.”
The nation’s airlines have announced they will cut about 80,000 jobs as a result of business lost after the Sept. 11 terrorist attacks.
The carriers’ plans to cut severance payments--coming to light days after Bush signed a $15-billion airline bailout package of cash and loan guarantees--have prompted an outcry from employee unions.
The International Brotherhood of Teamsters, which represents Northwest flight attendants, said it will challenge the action through a contract grievance procedure that calls for federal arbitration.
“They’re going to end up paying the workers anyway, so they might as well do right by them,” said spokesman Bret Caldwell.
But the severance cuts are not universal. US Airways, one of the nation’s most financially troubled airlines, announced it would pay full severance packages to furloughed employees, after earlier warning unions that it was considering curbing layoff benefits.
“They were leaning toward not paying it, but [Monday night] the company called me at home and said it wasn’t the employees’ fault, they’d been doing a good job and they shouldn’t be punished,” said Bill Freiberger, a negotiator with the International Assn. of Machinists. His union represents mechanics, baggage handlers and ramp workers at the airline, a unit of US Airways Group Inc.
“It shocked a lot of people, including me,” Freiberger said. “They’re in trouble and looking at everything they can to save cash.”
Boeing Co., which has announced plans to lay off up to 30,000 workers because of an anticipated drop in orders for planes, said Tuesday that it will honor its agreements to pay severance even though corporate lawyers believe the company could have claimed an exception.
Under Boeing’s contracts, workers typically are eligible for a week of pay for each year of service up to 26 weeks, spokesman Peter Conte said. Nonunion workers are eligible for the same.
“Boeing recognizes and is sensitive to the fact that this is a difficult period for everyone,” Conte said. “In light of that, Boeing intends to be as generous as possible.”
Continental Airlines Inc. also said it would honor contracts and make standard severance payments.
UAL Corp.’s United Airlines, which has announced plans to cut 20,000 jobs, may invoke emergency exceptions to some of its severance obligations, spokesman Andy Plews said. He said the company is discussing its layoff plans with employee groups and declined to detail what benefits were on the table.
Laid-off airline workers may get federal aid. Democratic members of Congress hope to pass as early as next week a $3.8-billion package of extended unemployment benefits, job training and other help.
Senate Majority Leader Tom Daschle (D-S.D.) and House Minority Leader Richard A. Gephardt (D-Mo.) met with Bush at the White House and urged him to support aid for displaced workers as part of an aviation security measure expected to go before Congress next week.
Union leaders, who were furious that the airline-aid package approved last week contained no provisions for workers, were optimistic that such legislation would be enacted soon.
“Momentum is building,” said Edward Wytkind, executive director of the AFL-CIO Transportation Trades Department, which is coordinating organized labor’s response to the crisis. “We have Republicans co-sponsoring bills [in the House and Senate]. Our case is being heard; now it’s a question of timing.”
Some Republican leaders are resisting the idea of including aid for workers in an aviation security bill.
Employees of Southwest Airlines Co., which has not announced job cuts, are offering to work up to eight hours per pay period for free to help the largest low-fare carrier save money until more people resume flying.
To encourage travel, Southwest on Tuesday started the first nationwide air-fare sale since the attacks. Until Oct. 11, customers can buy three-day advance purchase, round-trip tickets for as low as $34 each way. Other major carriers quickly matched the fares on routes where they compete with Southwest.
Times staff writer Richard Simon in Washington contributed to this report. Bloomberg News was used in compiling it.
