2 airlines drop plans to deny severance benefits

American, Northwest alter course after labor protest

September 29, 2001|By NEW YORK TIMES NEWS SERVICE

American Airlines and Northwest Airlines have dropped plans to deny severance benefits to thousands of workers that they plan to lay off in their post-Sept. 11 slump.

The two carriers had invoked emergency clauses in their union contracts in refusing to pay severance benefits. But, after their labor unions protested that other airlines were making such payments -- and threatened to lobby Congress to deny bailout funds to any airline that failed to -- American and Northwest reversed course.

Northwest said it would provide one week to six weeks of pay to laid-off workers. American did not say how much severance it would offer.

"This is something we have wanted to do but weren't sure we would be able to provide, given our changing circumstances and the devastating impact of the terrorist attacks on our industry and our company," Donald J. Carty, American's chief executive, said in a written statement. American's change of heart was first reported yesterday in The Los Angeles Times.

The airline industry has sunk into crisis since the terrorist attacks in New York and Washington. Passenger loads have dropped by 50 percent, and airlines have maneuvered to cut costs, announcing plans to eliminate nearly 100,000 jobs.

But airline and union officials said yesterday that the number of layoffs would be considerably less than 100,000, largely because thousands of employees were taking voluntary furloughs.

In addition, encouraged by new incentives, more than 1,000 airline workers are expected to take early retirement, and hundreds of pilots plan to go temporarily into the air reserves, further reducing the need for layoffs.

Northwest Airlines originally announced that it would lay off 2,800 flight attendants, but thanks to a new furlough program negotiated with the union, 2,500 Northwest attendants chose to take voluntary furloughs. With such furloughs, most of them five months long, Northwest's flight attendants will receive unemployment insurance payments while retaining their health and travel benefits.

Union officials remained dissatisfied yesterday with the severance benefits being offered by American and Northwest.

"It's substantially less than what the contract offers," said Robert De Pace, the chairman of the machinists union at Northwest. "But every little bit helps."

Last week, Northwest announced that it would eliminate 10,000 positions, but in recent days Northwest management said that voluntary leaves and attrition would reduce the layoff total to no more than 6,500 workers.

"I have to acknowledge that the company has gone out of its way to work with this union to reduce the number of involuntary layoffs," said Danny Campbell, president of the Teamsters union local that represents Northwest's flight attendants.

Continental Airlines said that it would need to make 1,000 fewer layoffs than the 12,000 it initially announced, because 1,000 workers had agreed to take one-year leaves of absence.

Airline executives have sought to share some of the pain by taking pay cuts, and yesterday the top officials of United Airlines and US Airways said they would join top officials at American, Delta and Continental in forgoing pay for the rest of the year.

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