Northwest Airlines Strike - Where is U.S. Labor Going?

NWA's labor relations strategy has deep roots in the tangled, bloody financial history of the airlines industry. Like most U.S. airlines, it has teetered on the edge of economic collapse since the dawn of deregulation, the Staggers Act of 1978 (passed by the same Democratic-led Congress and Democratic president, Jimmy Carter, who could not pass pro-labor legislation). Since then airlines have come and gone, with lots of "low-cost" carriers entering the industry, only to exit almost as quickly, and several long-operating carriers declaring bankruptcy, some to reorganize and some, like Pan American and Eastern, to go out of business altogether.

 

Most major carriers have restructured their operations along lines that our brothers and sisters in the construction industry would recognize as "double-breasting." That is, they have set up their own regional carriers, largely owned and certainly controlled by the big airlines, and supplied them with smaller planes for which they hired lower-paid workers - some union, some not - while guaranteeing them the business of ferrying passengers from smaller cities to their major hubs. These airlines have contracted out the spokes in their "hub-and-spoke" systems - to themselves, in disguise, serving as their own sub-contractors. Then the carriers use the lower wages and benefits paid by the regionals to pressure their own workers in the name of "competition."

The tangled webs of the industry don't end here. The major carriers, beneficiaries of regional monopoly status (NWA controls 80 percent of business in the Twin Cities, its major hub), slug it out with each other like those old plastic knock-your-block-off robots that kids played with before the invention of video games, in an environment in which  prices have been kept down despite rising costs. They groan under the weight of pension obligations, union wage scales and work rules, and rising fuel costs. But the owners of their airplanes (GE Credit is the major owner, regardless of the carrier monogram painted on the tail fin) and the owners of their debt (banks, financial institutions, mutual funds, and the like) have made healthy profits.

Airline executives, preferred stock holders, and financial players have not done too shabbily either. Through inflated salaries (keeping up with their counterparts in the rest of the business world), bonuses and stock options, they have emptied airline coffers of billions of dollars. At NWA alone, in just the past two years, a handful of executives dumped $400 million in stock they had purchased through options before the stock tanked from $50 a share to $4 a share to $1.50 a share. Their ability to avoid prosecution suggests how clumsy their buddies at Tyco, Enron and the like must have been.

The point is not the executives' greed and misdeeds, although there has been plenty of that. It is the creation, through economics, politics and power, of a system in which workers create profits that cannot be ploughed back into that industry for the lack of profitable investment outlets. That wealth is siphoned off to other outlets, the financial industry itself, for one, but also including the skyrocketing consumption patterns of the top owners (including, in NWA's Al Checci's case, a quixotic, self-funded campaign for the Democratic gubernatorial nomination in California). At some point - in the airlines, clearly now - a crisis is reached.

Then the workers are targeted as the "solution" to the crisis. They must work more and earn less. They must adapt their human needs (families, leisure, the pursuit of personal growth, hobbies, interests, community participation) to the demands of their employer for a workforce that is on call, available, "flexible." If not, if they balk, they can be replaced with other workers more desperate than they, from their own communities, from elsewhere in the U.S., from elsewhere in the world. And if they are organized into unions and try to use those unions to defend what they and their predecessors have built, then those unions must be broken.

NWA made extensive preparations for AMFA's strike. They hired and trained 1,200 replacement mechanics, lodged them in hotels near their hubs in Minneapolis and Detroit, and reassigned management personnel with the appropriate licenses to take off their white shirts and ties, put on overalls, and go back into the hangars. They expanded their global outsourcing of repair and service work, with contractors in Singapore, Hong Kong, El Salvador and Mexico, as well as non-union facilities in the U.S. South, performing routine maintenance work. (AMFA inherited a contract negotiated by the IAM which had included no language limiting "farming out." In their first contract, they reached a "compromise" of 38 percent, which NWA wanted to raise to 53 percent in their current proposal. These percentages are calculated not in jobs, human bodies or hours, but by monetary value. Hence, if a mechanic in Singapore makes half or less of what his U.S. counterpart makes, the amount of work that can contractually be outsourced is much higher than we might imagine.)

NWA's preparations went far beyond getting their repair work done. Four months before the strike began, they secretly contracted with ABM, the country's largest corporate cleaner, for all of the custodians' jobs. They contracted with a local temp agency, Globe Services, for the cleaners' jobs. They hired Vance Security International, an infamous anti-union private security firm, and their reviled Asset Protection Team, to intimidate strikers and any workers who might consider honoring picket lines. And they relied on their well-established relationships with the government and the mass media to get their agenda implemented, sanctioned, and represented as "necessary" and a "done deal."

NWA had relied as much and as long on government assistance, even in the ostensibly deregulated environment, as they did on concessions from their workers. In 1993 NWA management threatened bankruptcy and put out their hands. They pressured workers to make major concessions and asked the state of Minnesota to provide an $823 million loan at below-market interest rates. In return they promised to build a maintenance hub in economically depressed northern Minnesota which would employ some 900 mechanics. They got the loan but never built the facility. They have not repaid the loan and state officials refuse to even discuss its status.

 

Meanwhile, other branches of government, such as the Metropolitan Airport Commission, continue to function as NWA's junior partner, from fighting neighbors who complain about noise pollution to limiting free speech and picketing at the airport to marginalizing other carriers who would like more convenient gates for their service. In some crazy paroxysm of popular democracy back in the glory days of the early 1970s, an earlier incarnation of the MAC actually passed an "anti-scab" regulation which the current administration refuses to enforce.

And, then, of course, there is the federal government. Not only did Congress enact deregulation at the airlines' bidding in 1978, but ensuing presidents have carefully used their power to intervene or not in labor conflicts to enhance corporate management's exercise of its power.

In the current strike, AMFA's insistence that NWA's new maintenance system is unsafe seems borne out by hundreds of complaints filed by Federal Aviation Administration inspectors. Two days into the strike, a veteran inspector in the Twin Cities was reassigned to a desk after NWA complained that he was "too aggressive" in enforcing rules and regulations. Two weeks later, he brought more than 470 complaints, of his own and from many of his peers, to U.S. Senator Mark Dayton, who called on the Office of the Inspector General to investigate. The FAA inspectors' own union called for a public investigation. There have been no results other than a statement by the head of the FAA that all is well.

There is also the matter of NWA's - and the other major airlines - pension obligations. After years of ignoring, with apparent impunity their commitments to make payments into workers' pension accounts (where were the auditors and the regulators who should have been checking their books?), NWA and other airlines (and other employers throughout the economy) are revealing that they failed to do so and, now, cannot afford to make up the difference. Threatening to dump their pension obligations onto the government's Pension Benefit Guarantee Corporation (which United Airlines has done), NWA and other airlines have asked Congress to pass legislation allowing them to delay and spread out their legal pension obligations. Surprisingly, they have not asked for a parallel bill that would require their workers to delay, defer and spread out their aging and dying. Minnesota Republican Senator Norm Coleman, an utter corporate hack, has introduced legislation to allow this, claiming that he is acting to protect workers' interests.

While it can be difficult to sort tragedy from farce, it is clear that NWA's lobbying dollars have been well-spent.

Let us not forget the media. NWA has spent millions of dollars advertising in Twin Cities media outlets, which are, of course, controlled by corporations with similar goals and needs. Neither of the Twin Cities' daily newspapers have labor reporters. Their airline industry reporters were assigned to the story, with support from new reporters who knew none of the history of labor relations in the industry or the region. Editors sought to confine the story to the nether regions of the papers. For instance, when NWA hired Vance Security the week before the strike began, I informed the St. Paul Pioneer Press' lead reporter, who had no idea who they were, that her own employer, Knight Ridder, had hired Vance in the Detroit newspaper strike of the mid-1990s and that she had an obligation to disclose this when she wrote about their introduction into the NWA scene. Instead, her editor took her off the story, placed a story by another reporter mentioning "union complaints" about an unnamed "private security company" on the obituary page (really!) and held back from mentioning Vance by name for another month!

The Minneapolis Star Tribune has gone so far as to publish a human interest profile of a scab on the front page (above the fold!) of their business section. Despite pressure from the union, they held back on a story about the FAA investigations until Oct. 2.

The electronic media has not been much better. While Minnesota Public Radio has offered some analysis of the strike, they have typically sought out "objective" commentators, most of whom hail from the University of Minnesota's Carlson School of Business, while the commercial networks have been limited to 15 second visuals and sound bites. All have continued to feed the flying public's addiction to low prices at any cost. None have been willing to ask probing questions about the industry, its history and its workers. All of this has been fed by NWA's public relations machine and it has, in turn, fed an environment in which management's position has seemed "reasonable" and "the only choice."

This has especially been the case with NWA's decision to declare bankruptcy in September, a month into the strike. Encouraged by the example of United Airlines, which has spent three years in bankruptcy, shedding workers, lowering wages and dumping pension obligations, NWA sought to enter bankruptcy under the same rules. They claimed that the AMFA strike played no role in their decision and that AMFA will have no voice as the bankruptcy process unfolds. That may well be management's intent, but it is also true that by bringing its day-to-day business decisions and outcomes into a public courtroom, NWA management will become more vulnerable to union investigations and more susceptible to appeals to the public. For instance, in the last week of September, NWA came before the judge to request that they be allowed to pay top management their annual bonuses! The judge may allow this, but not before the union and its allies are able to bring this to the attention of the public. Interestingly, this motion was made just as AMFA was announcing that it had hired Ray Rogers and his Corporate Campaign, Inc. to conduct strategic research and develop public relations for their struggle. While bankruptcy will strengthen the airline's hand in its continued collective bargaining with other NWA unions, it could well also leave it more vulnerable to unconventional union strategies.

NWA management's implementation of its well-conceived, well-funded union busting strategy has caught the attention of corporate managers and their consultants not only in the airlines industry but throughout the economy. If they succeed, other unions can expect to face similar strategies. But it is also important to note that this struggle is far from over. Bankruptcy and the still unsettled relations with other unions, within a context of continuing questions about NWA's safety and its ability to fly its schedule with an over-worked cohort of reassigned managers and partially trained replacements providing maintenance, suggests that many twists and turns still lie ahead.

No factor is more important than the support - or lack of support - that the strikers receive from other unions. Throughout the airline industry, reminiscent of the railroads a century ago when Eugene V. Debs argued for the creation of one big railway union, multiple unions fragment workers. Different occupational groups - pilots, flight attendants, mechanics, baggage handlers, ticket agents, white collar workers, etc. - belong to different unions at the same airlines and to different unions across the airlines. Unity of action has been effectively blocked for decades, despite the right to sympathy strike (the Taft-Hartley Act does not apply to industries regulated by the Railway Labor Act). Unions have been pitted against each other at the bargaining table, especially in the concessionary environment of the past decade. The larger labor "movement" has not provided effective mechanisms to bring unions together.

 

The particular history of unions at NWA has played a key role in these dynamics, and  may hold the key to a very disturbing scenario that might play out in the weeks and months ahead. The IAM has excoriated AMFA as "raiders" and "elitists," and has so far convinced the AFL-CIO to withhold support and to encourage its affiliates to do the same. Interest in AMFA grew at NWA after the 1993 round of concessions. NWA threatened bankruptcy, but in exchange for 20 percent wage concessions they offered common stock which they promised to buy back (but never did) and promised that wages would "snap back" three to five years down the road, which they did.

When the mechanics, cleaners, custodians, baggage handlers, ticket agents and white collar office workers said "No," their union, International Association of Machinists District 143, insisted that they vote, revote and re-revote (what is "democracy" the third time over?) on the same package. As voter turnout plummeted, the concessionary contract was finally ratified. Union members soon voted IAM District 143 and IAM Local 1833 officers out, and when the new officers proved as inept as their predecessors a group of mechanics turned to AMFA, circulated election cards, and successfully promoted a change in affiliation. They argued that they needed a union that would be democratic and transparent, under its members' control, and they argued that skilled mechanics could do better for themselves without being tied to the mix of workers represented by the IAM. Their craft orientation certainly evinced some elitism towards other workers. The IAM also used its influence with the National Mediation Board (this was during the Clinton administration) to get the bargaining unit redrawn to include the custodians and cleaners now in AMFA's jurisdiction. They were hoping that these workers, who had not been courted by AMFA's advocates, would vote to stay with the IAM and thereby defeat the reaffiliation.

But AMFA won the 1999 representation election hands down and went on to negotiate a contract that brought substantial wage increases to workers whose wages had stagnated for more than a decade. They also instituted internal union practices which cemented the allegiance of their members. AMFA locals have no bureaucracy, no full-time officers. AMFA officers wear the same overalls and work the same jobs as the women and men they represent. Any member who wishes to watch a bargaining session is welcome to attend, despite fierce protests from management. Although AMFA did not seek to include the cleaners and custodians within its ranks, they have been integrated into the union's internal life at a local level.

Northwest flight attendants were long represented (this is generous use of this verb) by the Teamsters' sprawling Local 2000. In the mid-1990s, the same wave of rank-and-file protest and energy that brought Ron Carey to the national presidency of the Teamsters shook Local 2000. A slate of candidates led by partisans of Teamsters for a Democratic Union were elected to the leadership. They initiated an aggressive campaign of internal organizing and internal education. But when Carey was toppled by James Hoffa, the national Teamsters officialdom began to crack down on Local 2000. Hoffa appointed a "personal representative" to attend every meeting of the union's executive board as well as membership meetings. This "personal representative" began to disrupt the executive board, to gay-bait and red-bait its leaders, and to bring their activities to a grinding halt. Shortly after the NWA mechanics defected to AMFA, frustrated flight attendants launched their own campaign to withdraw from the Teamsters and start their own independent union, modeled after AMFA, called the Professional Flight Attendants Association. When Hoffa responded by placing Local 2000 under trusteeship, he pretty much guaranteed that the Teamsters would lose the election.

There's more. When NWA compelled unions to accept concessions in exchange for common stock in 1993, they offered a seat on the board of directors to a representative from each union. Once the ink was dry on the deal, they insisted that these directors had a fiduciary responsibility to the company and could not share information with the unions and workers whose interests they were supposed to represent. Bad enough? No, there's more. When 10,000 mechanics, cleaners and custodians elected AMFA to represent their interests and 14,000 flight attendants elected PFAA, NWA refused to give them seats on the board. They continued to treat the IAM and the Teamsters as if they still represented the workers who had voted them out, and they still sit there. Behind closed doors, AMFA and PFAA activists and their supporters discuss a nightmare scenario in which both unions would be broken by NWA, decertified, and then replaced, via sweetheart agreements, by the IAM and the Teamsters, allowing NWA to continue to represent itself as a "union" airline. Stranger things have happened.