Keep talking on Air NZ jobs, pleads Clark

EPMU chief Andrew Little with the ballot box. Picture / Richard Robinson

Prime Minister Helen Clark is urging Air New Zealand management and unions to keep talking about ways to save hundreds of engineering jobs at the company.

Air New Zealand engineers yesterday rejected a union plan to make concessions on pay and conditions in order to save 300 jobs.

The vote was lost by the narrowest of margins as Christchurch engineers, not immediately in danger of redundancy but asked to accept a change in working conditions, voted the plan down.

Helen Clark said the unions would be disappointed that a small majority at one workplace meant the proposal was rejected.

"I am told that these percentages may actually amount to as much as six people being the difference between something carrying and not carrying on," she said.

"That is why I say it would be best if this wasn't the last word on this matter.

"You have a very marginal voting down, very marginal in one of the four sets of votes that were taken and that seems to me to be the basis for people to keep talking, if that is possible."

Details of the concessions have been kept secret but were believed to involve a base annual salary and restructured working patterns and shifts to slash overtime.

The Christchurch workers do maintenance on smaller aircraft and that business is staying in New Zealand in the immediate future.

But Air New Zealand wants to hire an overseas operator to do the heavy maintenance work at present done by engineers in Auckland, meaning about 500 redundancies.

The Aviation and Marine Engineers Association and the Engineering, Manufacturing and Printing Union (EPMU) came up with a plan to agree to some cost-cutting when Air New Zealand announced its intentions last October.

The airline said an overseas operator would save it $100 million over five years.

The union counter-plan, drawn up after the unions hired a top business consultant, was just $2 million a year more expensive.

Air New Zealand chief executive Rob Fyfe said the counter-proposal appeared to be a "step too far" for staff, even though a majority of engineers supported it.

He warned that changes to working conditions for all Air New Zealand engineering jobs were inevitable.

"Working conditions in Christchurch are not sustainable either," he said. "Unless we can get competitive working conditions there we will struggle to maintain that business as well."

Although the airline was happy to continue talking and would welcome a change of heart by staff, long-haul aircraft could be flying to an overseas destination for maintenance within two months.

Mr Fyfe said passengers would not notice any difference.

"What this does do is make us more competitive.

"The more competitive we are the better the prices we can offer the travelling public."

EPMU national secretary Andrew Little said the union would meet today with staff who voted against the plan.

"We will see if we can get alongside them and work out if another vote could be taken," he said.

"We have made it clear that it will only be so long before the company comes after them for restructuring."

At the time of the airline's announcement to take the work overseas, Mr Fyfe said the engineering operation did not have enough work in New Zealand and relied heavily on servicing overseas airlines.

That was becoming more difficult, because large-scale operators in Europe and Asia could offer very high-quality work at a lower cost than New Zealand could.

About $48 million in savings would be needed over five years to keep the wide-body, or bigger jet, maintenance in-house, Mr Fyfe said.

He would not say which operator the airline was considering hiring but said it "preferred" to use a company based in Europe.

There had been suggestions the work could be done in China.

The Government has had a majority shareholding in Air New Zealand since saving it from financial ruin in 2001.

Air New Zealand slimmed down to a no-frills domestic service in 2002, cut costs on its transtasman services, and is upgrading its long-haul fleet as part of its recovery from near-collapse.

What's at stake
* 300 Air New Zealand jobs.

Why
* Airline profits have been been hit by sharply rising fuel costs. In response, the Government-owned carrier has laid off staff, imposed ticket surcharges and looked overseas for its aircraft maintenance, putting more jobs at risk.

What's next
* More talks, possibly another vote.

- NZPA, STAFF REPORTERS