Keeping Northwest in the Air

The business continuity behind the drama at Northwest Airlines

By Paul Kerstein

August 29, 2005 — CSO — There’s an important security issue buried in the labor relations drama at Northwest Airlines: the contingency planning that Northwest’s executives did to prepare for a work stoppage by an essential employee group and keep the airline flying. It’s a case study in business continuity preparations and a situation worth watching as it plays out in the coming weeks.  

More than 4,000 members of the Aircraft Mechanics Fraternal Association who work for the airline went on strike Aug. 20 after contract negotiations with the airline broke down. Minneapolis-based Northwest is seeking job cuts and other concessions from the unions in an effort by the struggling airline to stay aloft. Media reports estimate  the concessions Northwest seeks are worth $176 million and the loss of about 2,000 jobs.

The day before the strike, Northwest issued a statement saying that it would continue to operate a normal schedule and had spent the last 18 months developing "a comprehensive contingency plan" to maintain normal flight schedules with experienced, licensed and trained mechanics in place, in compliance with federal regulations. The plans included expanding use of existing contractors, making sure temporary replacement workers have the required training and federal licenses to repair aircraft, and making sure the aircraft meet federal requirements for maintenance and repairs.

Not surprisingly, assessments of how this arrangement played out last week varied based on who was talking. Northwest said that on Tuesday, Aug. 23, 99.5 percent of its passengers had completed their travel without disruption. A New York Times report cited statistics compiled by consulting firm FlightStats, which showed Northwest canceled 3 percent of its flights during the first five days of the strike, and one-third of the flights were late by 15 minutes or more. Union representatives told The Times the airline’s performance "was much worse."

By week’s end, Northwest executives seemed pleased enough with their contingency plans that they openly discussed hiring replacement workers permanently, which may not be as extreme an outcome as it sounds. The Wall Street Journal followed one replacement mechanic who’s actually a long-time contract worker for Northwest in Minneapolis. "There are more than a few people here who have been basically working for Northwest already," says Jim Jones, a 50-year-old mechanic.

The labor strife at Northwest is part of a bigger economic picture. Northwest was seeking to reduce its roster of on-staff mechanics through its collective bargaining, so the increased use of contractors is clearly part of a longer-term strategy. The airline is not alone; the use of outsourcing for aircraft maintenance work, to contractors both in the United States and abroad in countries like Germany, China and Brazil, is at 53 percent this year, up from 47 percent two years ago, according to a National Public Radio report.

What this means is that security executives thinking about business continuity need to keep their eyes open to global economic realities and bigger-picture business trends, and figure out how their companies fit into the mix. Whether Northwest and its mechanics settle their conflict isn’t clear; what is clear is that a strike didn’t come as a surprise to the airline’s contingency planners.

Michael Goldberg, CSO’s Managing Editor, looks at current events, issues and topics that relate to CSOs  and their work managing risks, securing operations and employees around the world. Do you have an issue you’d like to see covered here? Did you read something about the work of CSOs?  Send an e-mail to mgoldberg@cxo.com.

Read more about data protection in CSOonline's Data Protection section.

• Print