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Nov 13, 2008 5:49 pm US/Central
Legislative Hearing On Fate Of NWA And MSP Hub
(WCCO)
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In the next 12 to 18 months, Northwest will breach the terms of the 1991 contract, when it moves most of it 1,800 jobs at the Eagan headquarters to Delta's headquarters in Atlanta, Ga.
CBS
In 1991, Northwest Airlines was flying through financial turbulence. It was in desperate need of cash and credit.
That's when Minnesota taxpayers came to the rescue, backing a $372 million financing package from the state. In exchange, the carrier promised to maintain a base level of jobs, its Twin Cities hub and world headquarters in Eagan, Minn.
"These are good paying jobs for us," said State Representative Debra Hilstrom Thursday at a legislative hearing concerning the Delta-Northwest merger.
Lawmakers are beginning to demand answers from the airline and the Metropolitan Airports Commission, to see if it's in the state's interest to seek an immediate repayment of the loan.
"If we are not going to be getting the benefit then we, as a legislature,
need to be deciding what it is that we are going to do about it, in addition to the MAC and the
Department of Finances ability to call those bonds
early," said Hilstrom after the hearing of the Local Government and Metropolitan Affairs Committee.
In the next 12 to 18 months, Northwest will breach the terms of the 1991 contract, when it moves most of it 1,800 jobs at the Eagan headquarters to Delta's headquarters in Atlanta, Ga.
Among those testifying at the hearing was Delta's General Counsel, Ben Hirst. He told lawmakers, "In our opinion the right answer is for the underlying agreement to be modified to strengthen the hub covenant from the standpoint of the state and to strengthen the employment covenant ... while leaving the bonds in place from the standpoint of the airline."
Hirst continued to say that renegotiating the loan's terms will best protect Twin Cities air service and airline jobs. In fact, there's a good chance the revised loan could end up bringing more Delta services and jobs into Minnesota.
The Metropolitan Airports Commission will enter into those talks in the coming months.
"I don't think it means they're (Northwest) going to leave the state if they pay off the bonds early, but I think it makes it less certain what they're going to do," said MAC's General Counsel, Tom Anderson.
Northwest's union workforce is wary. A handful of pilots and flight attendants appeared at Thursday's hearing to express their concerns.
Flight Attendant Rene Foss, a representative of the Association of Flight Attendants -CWA, hopes MAC will extract more promises for the one that's about to be broken.
"Primarily, the main fear we have is if we were to lose those collective bargaining rights, aside from losing a voice in our future, there is a potential for job outsourcing," said Foss.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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