Talks set to resume

Friday, Aug. 19, 2005 | 9:40 a.m.

Northwest Airlines Corp.'s mechanics union said it would resume contract negotiations today after the airline made a "last, best offer" that provided "little hope" for avoiding a strike before tonight's midnight deadline.

"Negotiations are scheduled to resume at 9 a.m. this morning in Washington, D.C.," according to a voice-mail message from Steve MacFarlane, assistant national director for the Aircraft Mechanics Fraternal Association. Northwest's latest offer Thursday reflects the airline's "consistent, extreme position and leaves us with little hope of reaching a deal before tomorrow," MacFarlane said Thursday night.

Northwest, the fourth-largest U.S. airline, has said it must cut annual labor expense by $1.1 billion, including the $176 million from the mechanics union, to avoid a bankruptcy filing. The St. Paul, Minnesota-based carrier has contracted for replacement mechanics so it can operate during a strike.

The airline needs to take a strike now to avoid a bankruptcy filing, said Ray Neidl, senior analyst at Calyon Securities (USA) Inc. in New York. "They need $1.1 billion in labor cuts this fall. If they don't get it now, they face the real prospect of bankruptcy."

Kurt Ebenhoch, a Northwest spokesman, said last night his company's goal "continues to be to reach a consensual agreement with AMFA; however, if we are unable to do that and the union elects to strike we have a comprehensive contingency plan in place."