Northwest Airlines Corp., which is seeking to emerge from bankruptcy, is going before a judge in New York on Monday to void a contract with the union representing the air carrierâ€™s baggers after the workers refused to accept pay cuts.
Mediated talks between the International Association of Machinist in previous weeks have been unsuccessful.
In a vote earlier this year, 60 percent of the unionâ€™s baggers rejected Northwest's calls for layoffs and pay cuts. IAM representatives at the time had threatened a strike of 5600 workers if Northwest were to seek relief from a judge to impose its terms.
In a statement, Northwest said that it preferred to pursue negotiations, but added that it would not hesitate to take 'whatever actions are required' to reduce its labor costs. Northwest also said that it attempted to appease the union with enhanced severance pay, reduced outsourcing, and smaller proposed cuts for IAM than other unions.
The time has come for the holdout IAM groups to reach agreement, as every other labor union has done, Northwest wrote in a pre-hearing filing. As each week passes, Northwest's losses put it in a deeper and deeper hole, and the 'degree of difficulty' to complete a successful reorganization continues to increase.
Northwest, which filed for bankruptcy in September, reported a first-quarter net loss of $1.1 billion on Wednesday, stating that it was hurt by reorganization costs and rising fuel prices.