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Northwest Airlines tentatively agreed to a new contract with a holdout group of ground workers early on Friday, paving the way for the airline to hit its cost cutting target as it looks to restructure and exit bankruptcy.
A federal New York bankruptcy court judge, who was set to rule on Northwest's efforts to void the workers' contracts on Friday, postponed the hearing until June 14, allowing the affected equipment service and clerical workers time to vote on the new contract.
If ratified, the new contract would help Northwest save $190.4 million annually by cutting wages and benefits from ground workers represented by the International Association of Machinists. Overall, Northwest is looking to cut $1.4 billion from its labor costs each year.
The agreement reached on Friday affects Northwest's 5,632 equipment service workers and stock clerks, who voted to reject a new contract on March 7. At that time, two other IAM work groups ratified the new contract.
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