Baggage handlers and ramp workers for Northwest Airlines approved concessions to their contracts on Friday, which allow the airline to pursue budget cuts as it attempts to emerge from bankruptcy.
The five-year deal, negotiated by the International Association of Machinists and Aerospace Workers, was ratified by 62 percent of employees and represents $190 million in savings per year for Northwest.
The airline, which is aiming for a $1.4 billion target in annual labor spending cuts, will be allowed to outsource jobs at some airports, although IAM workers will be allowed to stay at 40 of the largest airports.
The new contract calls for 11.5 percent in wage cuts and allows Northwest to lay off 700 workers. The airline will also be allowed to loosen rules for part-time workers.
You can look at it in context, said Frank Larkin, a spokesperson for IAM headquarters in Washington DC. What was proposed earlier was much more draconian in terms of job cuts. We were able to negotiate significantly better terms.
IAM said Northwest had attempted to let go of up to 3,100 of its memers.
Northwest has already reached agreements with various unions, including those that represent pilots, transport workers, maintenance employees, mechanics and meteorologists.
Today's deal with ground workers must still be approved by a bankruptcy court.