The turning point in Air Canada's four-month struggle to squeeze $1.1-billion of life-saving labour cuts came on the afternoon of May 13 when the airline's top two executives, Robert Milton and Calin Rovinescu, received a call in their Montreal offices.
On the other end of the line was Mr. Justice Warren Winkler of Ontario Superior Court, the respected legal umpire who had been appointed four days earlier to broker an unprecedented new set of labour deals between the airline's deeply divided management and unions.
"He told us to drop everything we were doing and get to Toronto," recalled Mr. Rovinescu, Air Canada's chief restructuring officer. When the executives explained they were in the middle of an all-day board meeting and had other commitments that evening, Judge Winkler retorted "cancel your plans."
By 10 p.m., Mr. Milton and Mr. Rovinescu joined the parade of hundreds of Air Canada and union representatives that were shuttled through Judge Winkler's command centre atop a Toronto hotel at all hours for more than two weeks. The 4½-hour meeting was pivotal, union and company officials agree, because Judge Winkler convinced the executives that the labour talks would only succeed if they pared their demands down to a short list of core cuts needed to save the company.
The strategy worked.
In the astonishingly short space of 19 days, Judge Winkler convinced Air Canada's management team and nine bargaining units to tentatively approve new contracts that will cut more than 5,000 jobs, reduce wages by as much as 16.5 per cent and introduce more-flexible work rules to the troubled airline. The agreements mark the largest set of labour concessions ever granted to a Canadian company and a vital first step in Air Canada's quest to pull itself out of bankruptcy-protection proceedings by slashing costs.
Air Canada's executives and union leaders say the new contracts would not have been possible without Judge Winkler.
A former labour lawyer, the judge has been described as a tireless, no-nonsense magistrate who is affectionately called Wink by his friends.
"He was the anesthetic," said Pam Sachs, who represents Air Canada's flight attendants.
"I can't speak highly enough about Winkler; what he did is an amazing achievement," said Marvin Yonteff, a lawyer with Stikeman Elliot who is heading Air Canada's legal restructuring team.
Judge Winkler put union officials at ease with his folksy negotiating style and penchant for frumpy sweaters and vivid green Edmonton Eskimos windbreaker. More importantly, he treated union representatives and Air Canada executives equally, yanking everyone including Mr. Milton at all hours into what became known as his "chambers" on the 32nd floor of the Hilton Hotel.
Sometimes Judge Winkler would surprise airline executives by suddenly calling a union official into the room to rebut the airline's stand on a contract dispute. Other times, union and company officials cooled their heels together in a lounge, complete with a pool table, outside Judge Winkler's hotel office.
"This was the most dynamic operation I have ever seen. You never knew exactly when you would see him, and we would all be waiting outside until he called some of us in," said Air Canada's Mr. Rovinescu. "He kept everyone's feet to the fire."
To help take the edge off labour talks that had become poisoned with bad feelings between the unions and Air Canada's management, Judge Winkler sprinkled the negotiations with lengthy anecdotes about his rural upbringing in Pincher Creek, Alta., and tales about his dogs Maggie and Gretzky.
On May 21, eight days after the late-night meeting with Judge Winkler, Robert Milton stood before more than 60 union representatives in a meeting room at Toronto's Fairmont Royal York hotel to outline what he said Air Canada needed to survive.
For the first time since Feb. 6, when the company asked its unions to slash labour costs, Mr. Milton laid out in detail what the airline believed it needed from the unions to survive. His formula for survival was still too painful for union leaders, but it was a start. What he asked for was 7,800 job cuts, pay cuts of 10 to 15 per cent and a 10-per-cent reduction in pension benefits for all active workers.
Two days later, the unions told Judge Winkler at a meeting in the Hilton Hotel that they were united in their opposition to pension cuts. There would be no new contracts unless Air Canada backed off.
"I told the company that they had to preserve the pensions, and they agreed," Judge Winkler said.
"You have to be sensitive to people, and I thought that was important."
Mr. Winkler's stand on the pensions, negotiators said, was instrumental in winning union support for concessions. With the pensions protected, union officials said they were prepared to seriously discuss wage and job cuts and flexible new work rules.
By last Wednesday, all but one of the unions had reached tentative agreements allowing the airline to chop $766-million from its annual $3-billion labour bill. But without the pilots, the whole process was in jeopardy.
With no progress in sight with the pilots, on Friday, an Ontario judge set an "absolute" deadline of midnight Saturday for the unions to agree to a deal. If the two sides failed to meet the deadline, he warned, he would consider liquidating the troubled carrier.
While the deadline increased pressure on the pilots, they remained far apart in contract discussions because of their opposition to a contract Air Canada had signed the previous week with pilots from the airline's Jazz carrier, represented by the Air Line Pilots Association.
Under the contract, Jazz pilots were allowed to fly any aircraft with up to 75 seats. They were also granted the right to bid against the mainline pilots for aircraft with up to 110 seats, traditionally the territory of mainline pilots.
The new rights were significant for Jazz pilots because Air Canada is planning to order a new fleet of smaller jets in this range to replace its larger, aging aircraft. The mainline pilots feared the new Jazz contract would eventually result in hundreds of layoffs as Jazz grew larger than Air Canada's core airline.
Union leaders for the mainline pilots told Judge Winkler that they would never agree to a deal that gave so much of their work to the Jazz unions.
With the court's midnight deadline looming, late Saturday afternoon Judge Winkler left his hotel suite and visited representatives of the mainline pilots in one of their meeting rooms.
He had a compromise to propose. Reminding the pilots that they were fighting over the right to fly a new aircraft that would not be acquired for years, he proposed giving the mainline pilots the rights to fly the same planes that were earlier promised to the Jazz pilots.
Judge Winkler proposed that when the new planes begin arriving in 2005, the unions agree to a process by which an arbitrator would resolve which group of pilots could fly the planes.
"Guys," Judge Winkler told the pilots, "this is your deal."
It didn't take long for the pilots to agree. At 11 p.m. the Jazz pilots gave their blessing to Judge Winkler's endgame. Half an hour after the midnight deadline the mainline pilots signed on to Judge Winkler's plan.
"There's always going to be moments where you think it's going to come apart, but you have to just work through them," Judge Winkler said.
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