May 4, 2007
Pilots Union at Northwest Airlines Condemns NWA CEO's Outrageous $26.6 Million Bonus
BLOOMINGTON, Minn. - Leaders of the Northwest Airlines unit of the Air Line Pilots Association (ALPA) today condemned NWA CEO Doug Steenland's decision to reward himself with a $26.6 million bonus during a time when employees have taken 40 percent pay cuts for the next five years in an effort to help the company emerge from bankruptcy.
"Mr. Steenland grossly overreached and missed another opportunity to share the gain with the employees whose excessive concessions funded the airline's turn around," said Capt. Dave Stevens, chairman of the Northwest Airlines unit of the Air Line Pilots Association. "His compensation will be increased to $26.6 million while pilot payroll was slashed by more than 50 percent in bankruptcy causing morale to plummet. Employees expect a fair return, not 20 cents on the dollar while executives receive millions in pay and equity."
Steenland's ability to profit from Northwest's bankruptcy comes soon after Northwest pilots agreed to give $358 million annually (included a 23.9 percent pay cut) during the next five years to help the company avoid liquidation. This sacrifice was in addition to the $265 million (including a 15 percent pay cut) annual concession Northwest pilots gave in December 2004. Northwest pilots' total concession of $623 million a year totals over $4 billion through 2011.
"It is incredible that the CEO profits from Northwest's bankruptcy at the expense of pilots, other employees and stakeholders," said Bob Elflein, secretary treasurer of the Northwest Airlines unit of the Air Line Pilots Association. "Northwest management's mantra seems to be 'we will reap the gain while labor bears the pain.' "
In January 2006, Northwest management and its "experts" testified in Bankruptcy Court that severe labor cost reductions were necessary in order to save the company from liquidation. ALPA vehemently argued management's projections stating that management was overreaching in its demands. Today, Northwest Airlines is profitable once again and is far exceeding the grim business plan that management portrayed in Bankruptcy Court.
"Management must recognize and reward the employees with an equitable share in the company's success. To disregard our legitimate concerns is a recipe for continued labor unrest," said Capt. Ray Miller, vice chairman of the Northwest Airlines unit of the Air Line Pilots Association. "Pennies on the dollar from profit and success sharing programs are grossly inadequate compensation for our draconian 40 percent pay cuts and onerous work rules. Continued pilot concessions based on the Chapter 11 business plan that has already been far exceeded is absolutely unacceptable."
Founded in 1931, ALPA is the world’s largest pilot union, representing 60,000 pilots at 40 airlines in the United States and Canada. ALPA represents approximately 5,300 active and furloughed NWA pilots. Visit the ALPA website at http://www.alpa.org and the NWA ALPA website at http://www.nwaalpa.org.
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SOURCE: Air Line Pilots Association
CONTACT: Will Holman (612) 840-7749 or Wade Blaufuss (919) 673-0970