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Impasse declared at Northwest

MINNEAPOLIS » The clock is counting down on a possible strike by mechanics at Northwest Airlines Corp.

Faced with little headway on pay cuts the airline says it needs, federal mediators released Northwest and its mechanics union yesterday from contract talks, starting a 30-day cooling-off period.

The mechanics could strike on Aug. 20 unless they make a deal. The two sides are expected to keep meeting until the deadline.

Northwest CEO Doug Steenland said earlier that he believes it will take a firm deadline to make a deal happen.

Northwest, the nation's fourth-largest airline, has pledged to keep flying if there's a strike, using managers and mechanics from contractors. But even if they make a deal, the uncertainty could hurt bookings at Northwest during the busy summer flying season and steer the carrier closer to a bankruptcy filing.

The last major U.S. airline strike was when Northwest pilots walked off the job for 15 days in 1998. Northwest mechanics came within days of a strike in 2001, but President Bush appointed an emergency board, pushing back the deadline, and the two sides made a deal.

Bush has the power to block a strike again, but the White House signaled yesterday that that won't happen this time.

Squeezed by rising fuel prices, competition from low-cost carriers, growing pension obligations and looming debt payments, Northwest is seeking $1.1 billion in annual labor cost savings. It lost $458 million during its most recently reported quarter.

Oil prices slip below $57 a barrel

Oil prices fell below $57 a barrel yesterday after new government data showed rising U.S. supplies of diesel and heating oil and only a smaller-than-expected decline in crude oil inventories.

The nation's inventory of crude oil slipped by 900,000 barrels to 320.1 million barrels, or 7 percent above year ago levels, the agency said. Analysts said traders were expecting a decline of at least twice that size.

Enron Internet case faces heavy setback

HOUSTON » Three months after the Enron Internet fraud trial began, prosecutors failed yesterday to win a single conviction against any of the five defendants.

After deliberating less than 24 hours over four days, a jury acquitted three of the men on some charges and deadlocked on most of the Enron Broadband Services case.

The five men faced various charges relating to their roles in allegedly misleading investors regarding the success of the Internet venture.

It's the second blow in less than two months for the Enron Task Force: The U.S. Supreme Court earlier overturned the obstruction of justice conviction against the Arthur Andersen accounting firm.

Yesterday, jurors declared themselves deadlocked on many charges and prosecutors asked the judge to order the jury to keep trying. U.S. District Judge Vanessa Gilmore refused to do so, and declared a mistrial on the dozens of counts on which the jury could not agree.