Northwest Flight Attendants Reject Contract

Elena
01 Aug, 2006
New York City

That move is likely to lead the bankrupt airline to unilaterally impose a new, cost-cutting contract on the union, but the airline''s 9,300 flight attendants warned that any attempt by the airline to enforce new work rules will lead to random mini-strikes aimed at hampering the carrier''s operations.

[R]8:00AM Northwest flight attendants rejected a second contract with the company.[/R]
Northwest Airlines Corp. flight attendants rejected Monday their second tentative labor contract with the company, a move that will likely lead the bankrupt airline to unilaterally impose a new, cost-cutting contract on the union. The airline''s 9,300 flight attendants warned that any attempt by the airline to enforce new work rules will lead to random mini-strikes aimed at hampering the carrier''s operations.

For the second time a bargaining group failed to broker a deal for the flight attendants, who dismissed the Professional Flight Attendants Association after it negotiated a tentative labor contract on their behalf in March that fell far short of what they would accept.

Before Monday, Northwest already had permission from a bankruptcy judge to impose the terms of an earlier tentative agreement that 80% of flight attendants rejected in June. On Monday night the union asked a bankruptcy judge to limit Northwest to imposing the terms rejected on Monday, rather than the terms rejected in June. Both would save Northwest $195 million a year, and both include pay cuts of roughly 21%. The union said the reduction amounted to 40% once health care costs and other givebacks were included. Northwest sought Chapter 11 bankruptcy protection in September, 2005, hit by soaring fuel prices, costly retirement and benefit plans for employees, and stiff competition.


[R]7:30AM Asian markets close lower on profit-taking pressure.[/R]
Asian markets ended lower on Tuesday. Japan''s Nikkei 225 Average after three consecutive sessions closing higher, shed 0.1% to 15,440.91. Blue-chip electronics shares such as Sony and Canon shed 0.97% and 1.11% respectively. Hitachi, the largest electronics conglomerate of Japan, dropped 2.2%. Electronics maker Pioneer bucked the trend and gained more than 8% after reporting an unexpected quarterly profit on plasma TV sales and cost reductions. Auto makers traded mixed, with Toyota shedding 1.16% while Honda advancing 0.26%. Toyota is to report strong results on Friday. Honda announced a record profit last week.

In Hong Kong, stocks ended slightly down on declines in China-related companies, as investors attention moved back to interest rates ahead of next week U.S. Federal Reserve meeting. The Hang Seng Index slipped 0.4% to 16911.37, ending six sessions of advances. HSBC Holdings finished flat despite its report Monday that first-half net profit soared by 15%.

South Korean shares ended lower as profit-taking in banks and shipbuilders erased gains in technology shares. The Korea Composite Stock Price Index, or Kospi, declined 0.8% to 1287.36. Bank shares, sharply declined as investors took profits. Kookmin Bank lost 5%, despite announcing a better-than-expected rise in second-quarter net profit Monday.

Elsewhere in the Asian region, Australia''s S&P/ASX 200 Index shed 0.09%, New Zealand''s NZSX-50 Index eased 0.06% and Taiwan''s Taipei Index dropped 0.20%.


[R]6:30AM European stock markets overcome early weakness to turn higher.[/R]
European markets traded higher by mid morning. The U.K. FTSE 100 index advanced 0.2% at 5,941 and the French CAC-40 index added 0.1% at 5,016, with only the German DAX Xetra 30 index dipping 0.1% at 5,676. In early trading Deutsche Bank reported a 30% increase in second-quarter net profit on stronger commission income. The bank, however, stated that income from trading financial assets was weaker-than-expected in the wake of recent market volatility and the shares shed 2%. Ryanair was also off 2.3% after its statement that it maintains a cautious outlook for the rest of the year.

Positive results from KPN and Man AG counterbalanced the news from Deutsche Bank and Ryanair. Dutch telecommunications operator KPN rose 5 per cent to €9.33 after reporting a stronger-than-expected 10 per cent rise in core earnings and an improving outlook. German truckmaker and printing machine manufacturer Man AG gained 2.6% after it revealed that its second-quarter net profit more than doubled to 198 million euros ($252 million), from 97 million euros a year earlier.

Crude oil bounced back after the U.S. National Hurricane Center said Tropical Storm Chris, the third named storm of the Atlantic hurricane season, had formed in the Caribbean southeast of Puerto Rico and was likely to strengthen. Crude oil for September delivery was up 14 cents to $74.54 a barrel on the New York Mercantile Exchange at 11:02 a.m. in London. Brent crude oil for September settlement gained 22 cents to $75.36 a barrel on the ICE Futures exchange in London.

Gold in London traded at US$632.00 per troy ounce, down from US$632.58 on Monday. The U.S. dollar was mixed against other major currencies in early European trading Tuesday. The euro was quoted at $1.2739, down from $1.2768 late Monday in New York. The British pound was traded at $1.8651, down from $1.8678 and the dollar bought 114.77 Japanese yen, up from 114.56.