Big Business As Usual at Northwest Airlines

Moving Mountains

Business reporters are all flutter as Northwest Airlines (NWA) emerges from bankruptcy today, with stock prices going up and predicted 2007 profits of $794M. There’s little or no mention of the VIP winners and little fish losers– or what this means as one more way Corporations enrich themselves by robbing working Americans.

NWA pilots and flight attendants, with national union leaders and two elected officials, rallied with a Macy’s Thanksgiving parade-style giant inflated rat at the Minnesota State Capitol yesterday to expose what’s become the latest trend in what should be seen as legalized corporate theft.

As Pat Friend, president of the Association of Flight Attendants told the couple of hundred workers, ‘Airline executives used the shelter of bankruptcy to extract further concessions from airline employees in an unparalleled show of unscrupulousness and greed. our airlines were led into the no-man’s land of bankruptcy where they were able to cast aside the laws that protect our contracts and further decimate good jobs in our industry. Complicit federal regulators and the U.S. bankruptcy courts closed their eyes to the injustices wrought by the wealthy and powerful corporate executives.”

Flight attendants and pilots will lose 40% to 50% of their pay. imagine what losing half your pay would do to your budget.

For the flight attendants, this means making a salary of $15,000 to $30,000. Salaries for pilots vary considerably, depending on years of experience, what size plane they fly and other factors, but, Internet research shows pay from $60,000 for small-plane pilots to $240,000 for the most experienced large plane pilots. While that might sound like some pilots can absorb the cuts, Air Line Pilots Association (ALPA) president John Prader told the rally that there are pilots who’ve sold their homes and yanked their kids out of college. They will be flying longer hours, with fewer sick days and higher health care costs. ditto for flight attendants. their pensions will also be cut.

The $400 million cuts to that those who do the actual work of flying and services of NWA will be given to top executives in ‘bonuses”, stock and pensions. Minnesota State Senator, Jim Carlson ran down the mind-boggling numbers:

CEO Doug Steenland gets annual pay of $1.8M, a bonus of $26.5M, stock worth $5.8m and after 15 ½ years with NWA is guaranteed $947,417 in an annual pension. Outgoing chair Gary Wilson got $2M as he left the company, along selling millions in his stock options. Other executives made out well with their pensions; EVP Information,Phillip Haan gets $555,258 (13.8years of service); EVP Marketing, Tim Griffin gets $559-457 (11.6 years of service); EVP Operations, Andrew Roberts gets $413,968 (7.4 years of service).

Other airlines have declaring bankruptcy since 2002 have pulled off similar scams, citing the post-9/11 downturn. Remember the roughly $5 billion in taxpayers money the airlines got within weeks of the attacks? I wonder how much of that went into executive pockets.

NWA mechanics got hit with multiple pay cuts and lay-offs first, as their jobs were shipped off to China. (see the May 31, 2004 Washington Post article on outsourcing mechanics’ jobs)

There were plenty of workers who had little sympathy for the airline mechanics, in effect, saying,’They make $25 or 435 an hour — a lot more than I do! Why should I stand with them?” Probably many of those same folks won’t feel much empathy for the pilots and flight attendants either. This is just the latest example of corporate divide and conquer. Besides relocating plants or services to Third World countries with sweatshop wages, no benefits and unions made illegal, hiring undocumented workers or importing H1 visa workers, now, corporations can use bankruptcy as a way to discard labor contracts. Every union representative I asked agreed that airlines ‘declaring bankruptcy’ was just a way to rip-off the workers. The Executives’ bonuses confirms that.

It’s overdue for the 75% of American workers making $50,000 or less (often a hell of a lot less!), to stop identifying with folks like Donald Trump, who makes $1M per show for The Apprentice with a net worth of $1.9 billion — especially since ‘You’re fired!’ are the words workers most fear.

Walking the mechanics’ picket line a couple of years ago, I remember thinking that the flight attendants and pilots would certainly be next on the chopping block. Airline industry unions’ failure to to unify their struggles and go out on strike together means they got picked off by the executives. This should be a sobering lesson for all workers who want a fighting chance against these corporate rats. An injury to one really is an injury to all.

More information on airline industry unions.

Latest statistics on Americans’ wages.

Lydia Howell is a Minneapolis, Minnesota journalist, writing for several newspapers and online journals and winner of the 2007 Premack Award for Public Interest Journalism. She also produces/hosts CATALYST;politics and culture on KFAI Radio, shows archived for 2 weeks after broadcast at http;// this piece is part of her daily column MOVING MOUNTAINS, updated Monday through friday at http;// Read other articles by Lydia, or visit Lydia's website.

5 comments on this article so far ...

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  1. R D Roberts said on June 2nd, 2007 at 9:06am #

    You’re too right! We’ve been hijacked by corporate carpet baggers. There is an unholy alliance between business and government that is not only Orwellian, it smacks of rising facism. Lee Iaccoca has similar views. Please see an excerpt from his new book, “Where Have All the Leaders Gone?”

    Here’s the link:

  2. R D Roberts said on June 2nd, 2007 at 9:13am #

    The link I gave for the Iacocca excerpt seems to have problems. Just look for it on the May 3, 2007 entry at

  3. Harry Shaw said on June 2nd, 2007 at 9:37am #

    Lydia I read your article on ‘Business As Usual At Northwest’ , while your facts are fairly accurate you failed to clarify a few points.
    You stated that pilots and flight attendants were losing 50% of their pay the mechanics were losing over 50% of their jobs. That fact alone should show NWA wanted a strike. Also the rank and file were not as upset at the mechanics as you led readers to believe. The mechanics union AMFA does not belong to the AFL/CIO so the mechanics received no support from ALPA , IAM or the flight attendants union. So for these groups yo be seeking support is much like closing the gate after the cows have gotten out.

    Harry Shaw
    NWA Mechanic (ret)

  4. E. Skone said on June 2nd, 2007 at 10:53am #

    Could the army meet its enlistment quotas if young men and women were aware of how this country really operates?

  5. Mike C. said on June 3rd, 2007 at 8:24am #

    You are absolutely right! I feel that the stragety NWA used to make the Unions impotent has been in the works for years. I have to hand it to NWA management…the tactics are brilliant (evil and underhanded, yes) but brilliant. It continues even today, Unions are fighting each other and there is infighting within each union.

    Realizing there are plenty of hurt feelings and destroyed lives in the wake of the AMFA strike which got no support from any other union on the property, (which I feel was a result of events orchestrated years ago by NWA mgmt) it is high time for all unions on NWA property to try and put the past behind and come together as one to protect what little we have left.

    As a side note…All managers that took pay cuts during the bankruptcy have had their pay reinstated to pre-bankruptcy levels. Further, any bonuses or raises they recieved while the company was in bankruptcy they are permitted to keep!

    And all I got upon exiting bankruptcy was a coffee mug and a catered dinner. It’s a new day at NWA!!