business

Doug Steenland led Northwest Airlines through wrenching changes including a strike and bankruptcy, some of the toughest years in the airline's 82-year history. That may be one reason his role in a joined Delta and Northwest has been reported as a hang-up in talks between the two airlines.

To understand why, go back to Oct. 1, 2004.

Northwest CEO Richard Anderson had been pressuring workers for pay cuts during the airline downturn that began after Sept. 11, 2001.

But on Oct. 1, Anderson left Northwest to take an executive job at UnitedHealth Group, bailing out of a struggling airline for a health insurance giant and Wall Street darling. He later got the CEO's job at Delta Air Lines Inc.

Steenland, meanwhile, had taken Anderson's old job as Northwest CEO.

While Anderson was moving up at UnitedHealth, 2005 was getting uglier for Northwest. With fuel prices continuing to rise, Steenland ratcheted up the labor concessions he said were needed to avoid bankruptcy. Instead, mechanics struck in August.

Northwest went into Chapter 11 in September 2005 when fuel prices spiked after Hurricane Katrina. Its three other unions took it to the brink of strikes in 2006 before agreeing to pay cuts that Northwest could demand in bankruptcy court.

Thousands of the striking mechanics lost their jobs when Northwest hired permanent replacements. Pilots started holding rallies with an inflatable rat clutching two bags of money to protest corporate greed.

"Our concern with Doug is we haven't had the best of labor relations since he's been around," said Kevin Griffin, president of the Northwest branch of the Association of Flight Attendants-CWA. "There's a little bit of a trust factor there."

Delta and Northwest are inching closer to a combination that would create the nation's largest carrier, and if a deal is reached, it could be announced next week, a person briefed on the discussions told The Associated Press on Wednesday.

Griffin declined to say whether he would rather have Anderson or Steenland running the combined airline.

"Anderson was here for a while. He wasn't here for the rough parts. He was here for the beginning of it."

Steenland, and many on Wall Street, said it was all necessary to save Northwest.

"When Doug took over the reins as CEO the airline was headed for liquidation. He inherited a very challenging situation," Northwest spokeswoman Tammy Lee said.

She pointed out that Steenland, alone among CEOs of bankrupt airlines, saved its company pensions. As for the striking mechanics, "Steenland put a very fair deal on the table that would have protected 2,500 jobs and secured their future with the airline. I think that would have been his preference."

Northwest Airlines Corp. emerged from bankruptcy in May and made a 2007 profit of $764 million, not counting bankruptcy items. It has begun distributing profit-sharing checks. Steenland has repeatedly credited workers for the turnaround.

"He said the right things in terms of building better bridges with employees over the last couple of years," said John W. Budd, a professor of labor relations at the University of Minnesota.

Still, he said, many workers associate Steenland with the bankruptcy, and question whether it was really necessary or just a way forcing the cuts it wanted on workers.