Northwest Airlines Facing Turbulent Times

Effective public oversight or overzealous meddling: These are two views of a standoff that intensified this past week between members of a state Senate committee and Northwest Airlines.

A subpoena is the latest escalation in tensions between the Senate Transportation Committee and the Eagan-based airline. Lawmakers ordered it up late Thursday to compel testimony from Douglas Steenland, Northwest chief executive, about the airline's future plans.

Without it, committee members decided, a plan to expand Minneapolis-St. Paul International Airport should be blocked. The plan, being pushed by Northwest, is tied to fears that it will cost union mechanics jobs at the airline. Northwest denies that.

Critics, including committee member Dick Day, an Owatonna Republican, see a troublesome precedent taking shape.

"We are sitting here in a transportation committee in the middle of a labor dispute," Day said at the hearing, referring to Northwest's rift with its mechanics union. "Do we go to 3M next if we have some problems with them?"

And Brian McClung, a spokesman for Gov. Tim Pawlenty, said Friday: "We are disappointed that a legislative committee would be so heavy handed with one of our state's major employers."

Leaders of the Aircraft Mechanics Fraternal Association have led the criticism of airport expansion plans. "You should hold Northwest accountable," Ted Ludwig, president of Northwest's mechanics union told committee members Thursday.

For Northwest, it's not as easy as it is for some companies to tell the state to stay out of its business.

Slightly more than a decade ago, state lawmakers approved a plan to provide some $800 million in financing in exchange for job guarantees and other provisions as the airline struggled to pay its bills amid a deep industry slump. The state remains a major creditor.

"When the company is taking public subsidies, then they shouldn't be surprised when the public, represented by the Legislature, says 'we want to know what you are doing,' " said John Remington, a professor of industrial relations at the University of Minnesota's Carlson School of Management. "That is the price you pay when you get public support."

Now, Northwest is seeking $1.1 billion in annual cost savings from its workers in what it says it a necessary adjustment for an industry that can't raise fares enough to cover the cost of providing its product.

Northwest declined to appear at Thursday's hearing, and it's accusing legislators who support a moratorium on airport expansion of putting the brakes on the state's economic growth.

"The committee has sent a signal that it does not believe Minnesota needs to move forward," the airline said in a statement.

But any effort to tie airport expansion to getting answers about Northwest's future appears to have little chance of success. In fact, it will be lucky even to get heard in the House. The bill's House author, Michael Beard, R-Shakopee, readily admits its chances are "remote" there.

The chairman of the House Transportation Committee went further than that: Rep. Ron Erhardt, R-Edina, said since Northwest is a major employer in Minnesota, "I think there is a hesitancy to get too close to doing something adverse to them."

Beard, however, contends lawmakers deserve to know if Northwest is living up to promises it made when it received help in the early '90s. "Now if we even have a question for them that they are unhappy with, they bring all kinds of wrath and mischief on legislators through their reach," he said.

Northwest employed about 38,000 people at the end of 2004, down from 53,000 just four years ago. It employs about 16,000 workers in Minnesota. That would appear to be slightly below a commitment it made when receiving public help to keep employment in the state at about 17,000.

That may be, but the jobs question and Northwest's wrangling with its unions shouldn't overshadow airport expansion issues, say those who believe lawmakers are meddling.

At Thursday's Senate transportation committee meeting, chamber of commerce representatives from around the state lined up to testify on the merits of a nearly $1 billion expansion proposed for the Minneapolis-St. Paul airport.

The state's economic future depends on a world-class airport, they said.

Sen. Steve Murphy, committee chairman, shot back with a pointed question: "Would you still support this if you knew that Northwest Airlines would cease to operate in the near future? Bring that back to your board."