Northwest to close Md. reservation center

Airline notes lack of workers in area

April 04, 2007|By Stacey Hirsh | Stacey Hirsh,Sun reporter

Northwest Airlines announced yesterday that it will shutter its Hanover reservation center, which employs 183, because of a shortage of qualified workers in the area.

The center is slated to close March 31, 2008.

"The challenges the airline industry is currently facing require Northwest to continually review its operations," Perry Cantarutti, Northwest's vice president of reservations sales and services, said in a statement. "While this was a very difficult decision to make, it was necessary given the inability to retain and attract sufficient numbers of qualified staff at the ... facility."

Northwest has been operating under bankruptcy protection since September 2005.

Northwest also announced yesterday plans to open a reservation center employing 300 in Sioux City, Iowa, during the fourth quarter, though a company spokeswoman declined to comment on whether the Iowa call center was replacing the one in Maryland. The Sioux City center will handle some of the Hanover facility's call volume, the spokeswoman, Kristin Heinmets, said.

The Maryland workers will have the option of transferring to the Sioux City reservation center or another center in Chisholm, Minn.; Minneapolis; Seattle; or Tampa, Fla., the company said.

"It is very difficult for Northwest to announce the closing of its [Hanover] facility, and ask our employees to relocate. However, it is another necessary step to ensure that we can meet the needs of our customers and that the future of Northwest Airlines is secure," Heinmets said in an e-mail. "We thank Baltimore for its support and ask for its understanding during this difficult time for the airline industry."

Employees that choose not to relocate will be offered severance packages, as well as career fairs and job-search workshops, according to Northwest.

The closing comes after Northwest negotiated a wage cut at the facility as part of its bankruptcy proceedings.

Under a new contract negotiated in bankruptcy court last year, the starting hourly wage dropped from $10.54 to $9, and top pay from $20.14 to $17.82, said Joseph Tiberi, a spokesman for the International Association of Machinists and Aerospace Workers, which represents workers at the Hanover center.

That makes it even tougher for Northwest to compete in the booming Baltimore-Washington corridor, where the demand for qualified workers is great, said Richard Clinch, director of economic research at the University of Baltimore's Jacob France Institute.

Government and defense contractors, for instance, are hiring skilled workers who might otherwise be employed in a call center, Clinch said. These businesses have much deeper pockets than airlines, Clinch said.

"This benefit we're having in terms of a very tight job market, very stable economy, very growing economy, actually hurts, in some perverse ways, some of our existing businesses," Clinch said.

In comparing Anne Arundel County to Sioux City, there's no question that "the wages associated with that work force [in Iowa] would be less than you could find in the Baltimore corridor," said Anirban Basu, chief executive of Baltimore-based Sage Policy Group Inc.

"The labor market is so deep in Maryland right now, there are simply so many job opportunities that employers paying only moderate wages and only providing mediocre benefits can not hope to recruit or retain qualified staff," Basu said.

Anne Arundel County's unemployment rate was 3.5 percent in February, according to the Maryland Department of Labor, Licensing and Regulation.

Andy Moser, president and chief executive officer of the Anne Arundel Workforce Development Corporation, said that because the closing of the Hanover facility is so far off, it is likely to be a non-issue for employees.

"With that much of a lead time, by the time it does happen more than likely anyone who's not going to [relocate] and wouldn't have a job will have found one by then," Moser said.

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