Keeping Northwest in the Air

There’s an important security issue buried in the labor relations dramaat Northwest Airlines: the contingency planning that Northwest’sexecutives did to prepare for a work stoppage by an essential employeegroup and keep the airline flying. It’s a case study in businesscontinuity preparations and a situation worth watching as it plays outin the coming weeks.  

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

The day before the strike, Northwest issued a statementsaying that it would continue to operate a normal schedule and hadspent the last 18 months developing “a comprehensive contingency plan”to maintain normal flight schedules with experienced, licensed andtrained mechanics in place, in compliance with federal regulations. Theplans included expanding use of existing contractors, making suretemporary replacement workers have the required training and federallicenses to repair aircraft, and making sure the aircraft meet federalrequirements for maintenance and repairs.

Not surprisingly, assessments of how this arrangement played out lastweek varied based on who was talking. Northwest said that on Tuesday,Aug. 23, 99.5 percent of its passengers had completed their travelwithout disruption. A New York Times reportcited statistics compiled by consulting firm FlightStats, which showedNorthwest canceled 3 percent of its flights during the first five daysof the strike, and one-third of the flights were late by 15 minutes ormore. Union representatives told The Times the airline’s performance”was much worse.”

By week’s end, Northwest executives seemed pleased enough with theircontingency plans that they openly discussed hiring replacement workerspermanently, which may not be as extreme an outcome as it sounds. The Wall Street Journalfollowed one replacement mechanic who’s actually a long-time contractworker for Northwest in Minneapolis. “There are more than a few peoplehere who have been basically working for Northwest already,” says JimJones, 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 mechanicsthrough its collective bargaining, so the increased use of contractorsis clearly part of a longer-term strategy. The airline is not alone;the use of outsourcing for aircraft maintenance work, to contractorsboth in the United States and abroad in countries like Germany, Chinaand Brazil, is at 53 percent this year, up from 47 percent two yearsago, according to a National Public Radio report.

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

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