New Strategy and Tactics for Labor in the Airlines: Beyond Bankruptcy

Against the Current, No. 121, March/April 2006

Malik Miah

THE AIRLINES HAVE been leading the way in the transformation of labor-management relations.  The goal of the owners is the radical restructuring of labor costs and working conditions, to provide the maximum payout to executives and value to major shareholders.

Organized labor has been suffering big setbacks under restructuring: major wage cuts, lost of pensions and job reductions due to domestic and international outsourcing.  The unions are on the defensive.  It doesn’t matter their history of militancy or their size, as the mighty auto workers’ union is learning in the parts industry.

The weakness of labor is seen in its declining influence and representation of the workers in the private sector.  According to the Bureau of Labor Statistics, the percentage of U.S. workers who are union members is only 7.8% (2005)—less than one-third the 24.2% rate of the early 1970s.

Two examples in the airline industry show the complexities facing labor and the need to develop new strategies to fight back.  The bankruptcy at UAL, owner of the world second largest air carrier United Airlines, is a case in point.  And the ongoing strike at Northwest Airlines (NWA) that began on August 20, 2005, is a second example.

UAL Exits Bankruptcy

Since the 1970s, the bankruptcy tool has been a frequently used anti-labor tactic of the employers.  It happened at United Airlines on December 9, 2002, which became the longest bankruptcy in the history of aviation—some 38 months.

On February 1, 2006, UAL exited Chapter 11 and once again became a “normal” corporation traded on the NASDAQ stock exchange.  There were, however, few cheers by United employees—except the top 400 executives who are receiving a payoff of 8% of the new stock.  The CEO alone expects a $15 million bonanza, while hourly workers are receiving pennies on the dollars for massive concessions imposed by the bankruptcy process.

United employees suffered greatly over that three-year period.  Employee headcount was reduced during that period from 83,000 to 58,000.  UAL reduced the number of aircraft it operates from 570 to 460.  United’s debt fell from approximately $31 billion to $17 billion.  The union employees lost their pensions, pay more for health care and saw their wages reduced to levels, in real dollars, to that of the mid-1990s.

UAL’s exit from Chapter 11 marks a new stage for United Airlines and its maintenance division, United Services.  The big question for all union labor, and the mechanics’ union in particular, is “How do workers respond to the reality of the new United Airlines?”

On the one side, the company survived and has put itself in a possible position to compete.  Many of its traditional competitors are worse off with two falling into bankruptcy in September 2005—Delta Airlines and NWA. The so-called low cost carriers—Southwest Airlines and Jet Blue among others—however, continue to be tough competitors driving down operating income as fuel prices rise.

On the other side, union labor, especially the mechanics, are in a position to begin planning to regain some of their losses.  The next contract opener begins in 2009, and the contract becomes amendable in 2010.  The fear on the property is whether management will seek the “Northwest solution”—hiring replacement/scab workers to break a possible strike and the union itself.

Engage, Yet Stand Firm

As a mechanic and union officer (UAL Local 9 Airline Representative in San Francisco, the largest AMFA local), I can only speak for the mechanics’ union, AMFA.  Our post-bankruptcy strategy is to engage yet stand firm.  To “engage management” is not subordination or capitulation.  It means that the union must interact, integrate and advance its interests by talking to, meeting with and challenging the managers and top executives at United Services and the corporation as a whole.

In the new world of aviation, with cutthroat competition, mechanics can no longer limit their job description to maintaining, overhauling and repairing aircraft.  The competitive reality requires learning the business in a way that unions traditionally have opposed.  The aim is to seek to control mechanics’ work in order to help ensure the survival of union-represented maintenance.

The goal in short is “workers’ control”—fewer management at the point of maintenance.  Mechanics in particular must do this as most airlines, both legacy and new low-cost rivals, move away from significant in-house maintenance.  Union-busting at Northwest Airlines is the most extreme action.  But Delta and others are doing the same.

Southwest Airline is the only exception to the herd mentality.  Its business model at all levels of running the business is unique.  SWA, unlike the legacy carriers, for 35 years has followed a strict business plan that limited expansion to a new route only if it would be profitable in a finite period of time.  SWA management did not seek market share for the sake of market share.

Today Southwest is the number one carrier in flying domestic passengers—and the only airline to make a profit every single year of its existence.  Moreover, SWA is the most unionized airline (a fact not widely known) with licensed mechanics at the highest scale in the industry.

Organize Vendors

Long term, labor must organize all maintenance workers to be effective.  This includes making international alliances with workers doing work once done in the United States.  This challenge is becoming more and more common in the airline maintenance field—from Singapore to Hong Kong to China and El Salvador among many countries—where this work is being done.  Since our strike at NWA began, leaders of AMFA have begun to reach out to workers in other countries, taking trips to England and Japan to express and gain solidarity.

The days of the vertical airline, where all maintenance is done in-house, are over.  To shut down a carrier means more than a solid strike by a single union in an industry with multiple unions.  It requires unity of all the employees, and support by other workers employed by outside vendors who now do a great deal of maintenance.

In the days of aviation regulation (before 1978) all carriers did their own heavy and light maintenance.  This gave labor unions increased clout.  As Ruth Milkman, director of the Institute of Industrial Relations at the University of California told The New York Times (January 29), “Regulation in many cases put a floor under companies.  In a way it made unionization possible by eliminating cutthroat competition.  In manufacturing [and I would add aviation] what’s changed is international competition.”

Third party vendors—domestic and international—are doing most of the heavy maintenance.  Many are seeking to do Line maintenance at the airports.  History has taught us from other industries that not only is this possible but inevitable, for much skilled as well as less-skilled work.  In aviation management refer to “high tech” and “low tech” jobs, with the latter more and more going to vendors locally and internationally.

Don’t Put Head in Sand

Moreover, the quality of outsourced workmanship gets better with time.  This shatters the myth that foreign workers are less skilled, qualified or capable than American workers.  The real problem for nonunion and third-party vendors is quality control and inspection—not whether labor is less qualified.  In aviation, the licensed mechanics abroad follow the same FAA and other regulations that U.S. mechanics are trained in, for example.

In the 1970s when the auto industry denounced Toyota and other Japanese companies for importing cars but refusing to build them on American shores.  The Japanese then “transplanted” their factories, proving GM, Ford, and the auto workers’ union leadership, wrong.

The brief history of transplants has shown that American workers build Toyotas as well as Japanese workers—proving that the fundamental problems at U.S. auto companies are managers and their bad decisions, not the workers themselves.

We’ve had the same experience at UAL and other airlines.  Vendors over time are doing work that aviation technicians once did. With identical training workers in other countries are just as capable as American mechanics.  American orkers can put their heads in the sand, and pretend that this isn’t happening.  But it is already occurring.  It is not a viable strategy to simply say, “No” without presenting an alternative.  Until governments and corporations are under direct control of working people, there is no other policy to follow that can effectively protect workers’ interests.

AMFA’s leadership at United Airlines, thus, sees post-bankruptcy as more problematic for workers than even the period of a record 38 months of bankruptcy.  We know the union must develop a strategy (and tactics) that recognizes the new world reality and learn how to effectively operate in it.

NWA Strike Remains Acid Test

In this broader context, when labor does fight back, it is important and urgent that other workers (union and nonunion) rally to their support.  The strike by mechanics, custodians and cleaners at Northwest Airlines organized by the Aircraft Mechanics’ Fraternal Association is a test for the declining labor movement.

AMFA members went on strike on August 20, 2005, continue to stand firm but lack the labor solidarity to shut the carrier down.  NWA is hurting and faces loss of its certification to do Base maintenance.  Safety, too, is a continuing concern for the flying public.

Although NWA management brought in scabs to break the strike, AMFA members have persevered.  Very few have crossed the picket line.  But without labor solidarity, gaining public support is more diffiicult.

The leaderships of the other unions still working at NWA (pilots, flight attendants and baggage handlers and customer service) refused to honor the picket line even though their contracts allow it. They are in the “save the company at all costs” mode even if it means the unions are being house broken (militant rhetoric aside) in the process.

In September, NWA filed for Chapter 11 bankruptcy, adding that weapon to its union-busting objective.  It is demanding massive cuts on those workers still working on the property, far beyond anything forced upon the unions at UAL.

These union leaderships’ refusal to honor a legal picket line is dishonorable, and in the end self-defeating.  Actions to appease management can’t work—and never have.  The NWA owners smell weakness, and are planning the complete rout of their contracts.  If they do manage to survive, the unions may exist primarily as dues-collecting machines.  Despite the lack of labor solidarity, the AMFA leadership understands that beating back the ruthless employer means uniting with other workers.  Since the other unions’ leaders aren’t interested, AMFA is reaching out to rank and filers.

Steve MacFarlane, AMFA Assistant National Director, and a Northwest Airlines striking mechanic, outlined this approach at a January meeting of AMFA Local 9 in San Francisco.

MacFarlane was asked: “What leverage, if any, does AMFA have at Northwest?” He responded that the willingness of people not to not fly on NWA due to the strike is important to continue to expand solidarity.  Such acts influence both consumers still booking on Northwest flights and employees who are still crossing the picket line.  He explained that “Every job we have within this industry is now at risk because of Northwest.”

Stand Firm

In the context of this difficult reality the union strategy (whether at United Airlines or Delphi) must be to stand firm to defend a legally negotiated contract.  To put us in the strongest position to fight back and protect our wages and jobs organized labor needs to come together and press for control over our work.  This is not an academic question as the strike at Northwest Airlines proves.

Labor’s goal cannot be simply to save union recognition and the flow of dues dollars at the expense of principles.  Trading decent-paying jobs for low-paying ones so long as the “new” workers are one’s own members is a policy of failure and betrayal.

But that’s exactly what the Machinists are seeking to do at Northwest Airlines.  When AMFA struck the company, the IAM arranged to take over the work of the striking mechanics, claiming that it “belongs” to them because years ago they represented the mechanics.  It is bad enough to cross the picket line.  It is outright class betrayal to take the work of striking mechanics!

Workers face critical times in this industry—as in all other private sector jobs.  The challenge for today’s union leaders, and members, is to both engage management at all levels and stand firm to defend our interests.

Malik Miah is an AMFA UAL Airline Representative in San Francisco, and an editor of Against the Current.

ATC 121, March-April 2006