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Pawlenty open to talks on NWA bond pact
The governor's position on renegotiating NWA agreements depends on "how fairly'' a Delta merger treats Minnesota.
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If a merger between Delta Air Lines and Northwest Airlines results in preserving airline jobs and a major hub in Minnesota, Gov. Tim Pawlenty said Monday that he would be open to renegotiating airport agreements that otherwise could be used to financially penalize Northwest for closing its headquarters.
Agreements that Northwest signed with the Metropolitan Airports Commission (MAC) require Northwest to maintain its Minnesota headquarters and Twin Cities hub or face the immediate repayment of $245 million in bond debt. In addition, violating MAC agreements could mean the loss of concessions revenue and favorable airport lease terms worth about $200 million.
Speaking to reporters, Pawlenty said he wants to keep the headquarters and hub. "We have given significant accommodations and concessions to try to ensure that that happens to the tune of $445 million," Pawlenty said.
But he did not draw a line in the sand about what he will do if Delta and Northwest propose a merger in the coming days.
"The degree of our concern or the degree of our objection or the degree of our support will depend on how fairly they treat us," the governor said. He was joined by the leaders of the House and Senate DFL and Republican caucuses, who chose to show a unified front in their approach to saving jobs and air service for their Minnesota constituents.
Pawlenty said that Northwest, headquartered in Eagan, employs about 11,500 people in Minnesota.
In a statement Friday, Northwest executive Ben Hirst said that Northwest's objective is "to ensure the long-term survival of the Minneapolis-St. Paul hub and the Minnesota jobs we support."
As the acquiring airline, the governor said, Delta and its chief executive, Richard Anderson, are in the "driver's seat" regarding the "terms and conditions of this potential merger."
The governor anticipates that Atlanta would be the headquarters for the merged carrier, so he is focused on the possible loss of 1,000 or so jobs from Northwest's headquarters.
People familiar with Delta's thinking have said Delta recognizes the need to make a "substantive" commitment to the city losing its headquarters.
Pawlenty pointed to the possibility of using Minnesota for the merged carrier's cargo business and information technology offices. He described cargo as "an operational area that could stay here and grow."
If a Delta-Northwest merger offered significant benefits to Minnesota, Pawlenty said he would consider the revamping of terms on the contracts Northwest now holds with the MAC. While the airports commission would have the formal authority to alter agreements with Northwest, most of the members of the MAC are appointed by Pawlenty.
The governor did not take a position for or against the merger, saying he has not yet seen the details of a deal.
He also said that mergers do not always result in job losses for the state. When Wells Fargo and Norwest Corp. merged in 1998, "the headquarters moved to San Francisco, but the number of people employed in Minnesota actually increased after the merger," Pawlenty said.
Northwest pilot leaders would like a merger to produce long-term job security and better pay for their members.
On Monday, pilots from Northwest and Delta continued their negotiations. They have been meeting with each other about integrating their seniority lists and with management about forging a combined labor agreement.
Liz Fedor • 612-673-7709
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