More Than 400 Southwest Mechanics Get Furlough Warnings as Cost-Cutting Talks Falter

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  • More than 400 Southwest mechanics were warned that their jobs are at risk.
  • Talks will continue with pilot and flight attendant groups.
  • Southwest is poised to have its first-ever furloughs unless work groups reach cost-cutting deals.

More than 400 Southwest Airlines mechanics and technicians, about 15% of the work group, have received notices warning them about potential furloughs, the carrier said Wednesday.

Southwest has asked employees to take 10% pay cuts to avoid furloughs, which would be the first in the Dallas airline's nearly 50 years of flying. Southwest warned 42 material specialists about possible furlough earlier this month.

The talks have raised tensions with labor unions at the airline. The mechanics' union, the Aircraft Mechanics Fraternal Association, said in a note to members Wednesday that it was surprised by the furlough warnings. It also slammed the company for turning down federal loans because the terms were too onerous.

"This attempt to pressure our members into accepting unfair wage decreases, while management turns down government loans because they refused to suspend shareholder dividends and stock repurchases — loans that all the other leading airlines accepted — makes this action unconscionable as well as illegal," Bret Oestreich, national director of AMFA said in a statement.

U.S. airlines have furloughed more than 30,000 workers as they struggle from weak demand in the coronavirus pandemic — a crisis executives say is the worst in their history. Including buyouts and other voluntary departures, the industry will shed the equivalent of some 90,000 employees by the end of 2020, according to Airlines for America, a trade group that represents most U.S. carriers.

Southwest said it has sent 403 mechanics and technicians federally mandated notices warning them that their jobs are at risk. The involuntary cuts could take effect as early as Jan. 25.

"We are not closing the door to further discussions, but we need agreements to be reached to help us save these employees' jobs and address the extremely challenging economic conditions we face," said Russell McCrady, vice president of labor relations at Southwest.

The company said it plans to continue talks with the union, according to a memo to employees, which was seen by CNBC.

Negotiations are ongoing with Southwest Airlines pilots and flight attendants, but unions for both groups have bristled over a force majeure clause the company proposed, which the labor groups say threatens job security.

Correction: An earlier version of this story incorrectly identified the sender of a memo to workers.

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