Northwest, Delta Merger Could Hurt Unions, Cost Jobs

Jan. 17--A merger between Northwest Airlines and Delta Air Lines could threaten the union status of Northwest employees because Delta's workforce is largely nonunion, industry observers told the Free Press on Wednesday.

U.S. Rep. Jim Oberstar of Minnesota, chairman of the House Transportation and Infrastructure Committee, said Northwest confirmed to him that the airline has begun formal discussions with Delta and will look elsewhere if Delta tries to merge with United Airlines. Delta, based in Atlanta, is said to be in discussions with both carriers.

Oberstar said he will fight a merger because it will limit options for passengers.

Some say much more is at stake.

A marriage involving Delta and Northwest -- the largest passenger carrier at Metro Airport -- stands to jeopardize the union status of thousands of Northwest employees, said Terry Trippler, a Minneapolis-based airline expert.

"I don't think any merger is going to give anyone a pay raise," he said.

Only Delta's pilots are unionized. By contrast, most of Northwest's nonmanagement workforce is unionized. Delta has roughly 51,000 employees while Northwest has 31,000.

Unions representing Northwest employees are skeptical that a merger would hurt the unions.

"It doesn't matter who buys who. What matters is the percentage of union people," said Kevin Griffin, spokesperson for the Association of Flight Attendants.

Steve MacFarlane, national director of the Aircraft Mechanics Fraternal Association, said a merger could cause more workers to seek union membership.

"These workers are angry and they have good reason to be," MacFarlane said. "Nonunion carriers have a lot to worry about."

But whoever ends up being the acquirer wouldn't determine the fate of unions, said Michael H. LeRoy, professor at the Institute of Labor and Industrial Relations and College of Law at the University of Illinois at Urbana-Champaign.

Getting rid of a union would require a decertification vote and unionizing Delta's nonunion employees would require a vote, as well.

"It can go either way," LeRoy said. "The acquirer is irrelevant. What matters is the percentage of nonunion to union employees."

Trippler said Northwest might end up being the acquirer because it has more money than Delta, its larger rival.

After winning hard-fought concessions from its pilots and flight attendants, Northwest emerged from bankruptcy on May 31 with $3.2 billion in cash, a record at the time for the airline. Delta had $2.6 billion in unrestricted cash, cash equivalents and short-term investments as of Jan. 30, 2007.

Delta's presence at Detroit Metro Airport is relatively small. Delta has 16 to 18 departures a day depending on the season. Northwest has more than 500 departures per day.

Northwest Airlines spokesman Dean Breest declined comment about possible talks.

Delta spokeswoman Susan Elliott said Wednesday that Delta had formed a committee and is exploring options "that will allow Delta to retain its position in the industry."

But Oberstar, who has opposed airline mergers in the past, said a merger between the two companies would reduce competition and limit options for passengers.

"Further consolidation of the aviation market is not in the best overall public interest," Oberstar said.

A merger among United, Delta or Northwest would vault the combined company past American Airlines as the world's largest airline.

The aviation industry has been rife with merger speculation since late last year when there was talk of a merger between United and Delta.

Delta, which has hired legal and financial advisers, said as far back as October that it was considering merger options and asset sales, and planned to be an acquirer.

Soaring oil prices and high labor costs are the key drivers behind the latest call for industry consolidation.

Northwest customer Mark Levine said he would welcome a merger between Delta and Northwest.

"It would mean something if the service got better," said Levine of Birmingham. "But not if we're still tied to one airline and they happen to go on strike and treat everybody like garbage."

Levine said he has boycotted Northwest as much as possible since the airline bumped him off flights this summer and gave little in the way of compensation.

He is keen on a Delta merger, based on his experiences.

"Delta seems to have it together," he said.

Analysts have long speculated which airlines are most likely to merge.

Delta buying Northwest topped a list of merger possibilities assembled by Calyon Securities in New York in November. The two systems have little route overlap domestically or internationally.

Delta has two dominant Atlantic seaboard hub operations at John F. Kennedy Airport in New York and the Atlanta airport, which complement Northwest's two operations at Detroit and Minneapolis-St. Paul airports.

Northwest is a powerhouse internationally and within Asia, where Delta is weak. Delta is strong in the Atlantic and has a solid position in Latin America, areas where Northwest isn't prominent, according to the report.

A Northwest merger with Delta Air Lines wouldn't have an obvious impact on Detroit, one observer said.

"Detroit is a protected hub," said longtime Virginia-based airline consultant Darryl Jenkins. "There are good international routes; you have less low-cost competition.

"Fares are going to go up, but that's whether we have a merger or not," Jenkins said, adding that higher fuel prices are driving up fares.

The Associated Press contributed to this report.