Delta and Northwest CEOs told senators they'd safeguard thousands of Minnesota jobs in a merger, but warned of unforeseen developments such as significantly higher fuel costs.
Delta Airlines CEO Richard Anderson, left, and his Northwest counterpart Doug Steenland prepare to testify at a Senate Aviation Operations, Safety and Security subcommittee hearing on the effect of the proposed merger of the two airlines.
WASHINGTON - Delta Air Lines' top executive pledged Wednesday to preserve thousands of Northwest Airlines jobs in Minnesota as part of the two companies' proposed merger, including more than 450 jobs at a reservation center in Chisholm.
In his most detailed public pledge about jobs, Delta Chief Executive Richard Anderson told members of Congress that he foresees no cuts among Northwest's pilots, trainers, flight attendants, cargo workers and other ground workers. Among the jobs involved: 2,200 Twin Cities-based flight attendants, 1,000 aviation mechanics, and the company's 400 workers in another reservation center in Bloomington.
But, as he has said before, Anderson repeated that the merger likely would lead to job losses among the 1,100 employees in Northwest's Eagan headquarters. The combined airline's headquarters would be in Atlanta, where Delta is based.
"There will be reductions [in Eagan], we've been clear about that," said Anderson, adding that as many as possible will be achieved through early retirement programs and other voluntary incentives.
In their third merger hearing before Congress, Anderson and Northwest Chief Executive Doug Steenland tried to allay lawmakers' concerns about lost competition, jobs, service reductions and fare increases.
They were met by skeptics among consumer groups and unions, who warned that the government could do little to enforce the airlines' promises once the merger is approved.
"The commitments that are made today will mean nothing tomorrow," said Robert Roach, testifying on behalf of the International Association of Machinists and Aerospace Workers.
The hearing before a Senate Commerce subcommittee on aviation provided lawmakers a chance to extract specific commitments from the two corporate chiefs, who are trying to win approval for what would become the nation's largest airline.
Among senators pressing Anderson and Steenland was Minnesota Democrat Amy Klobuchar, who has expressed strong concern about the merger proposal and its effect on Northwest jobs and the airline's reservation centers.
"Those reservation centers will stay open," Anderson said. Pressed further by Klobuchar on how many jobs would be maintained there, Anderson said, "It may go higher, but if it has to go lower, it won't be because of involuntary [layoffs]. We're pretty comfortable in saying that the current levels we have there will remain the same."
Asked how long the jobs would last, Anderson said, "I would use the term 'indefinite.'"
The commitment to keep the Chisholm reservation center in operation is particularly significant, because it lies in the district of merger foe Jim Oberstar, the Democrat who chairs the House Transportation Committee, which is holding a hearing next week.
But Anderson's jobs pledge was followed by a warning from Steenland about unforeseen market pressures, particularly skyrocketing fuel prices.
"The only thing we know is the world that we see today," Steenland said, noting recent predictions of $200-a-barrel oil. "If that happens, clearly air fares are going to have to go up in a very significant way. If air fares go up in a very significant way, by the definition of the laws of supply and demand, we're going to have fewer passengers. If we have fewer passengers, we probably need fewer reservation agents ... and fewer flights."
Klobuchar said she understood that the jobs pledges in Minnesota do not account for factors outside the airlines' control, saying she would seek further pledges on what specific circumstances might "trigger" job reductions.
The airline executives also reiterated the assurances they made earlier, including in congressional hearings last month, that they would keep Northwest's Twin Cities hub operations and service to a dozen airports in and around the state.
"They're not ironclad, that's for sure," Klobuchar said. "But it was important to get this on the record, at a congressional hearing, in public, that they do not have plans to cut the front-line employees, and also to maintain the hub and to maintain the rural service."
Klobuchar noted that one piece of unfinished business remains a joint seniority agreement that includes Northwest pilots, who have been unable to come to terms with their counterparts at Delta.
"We made good progress, we didn't get it done," Anderson said. "But we're still hopeful that we'll be able to get it done."
Kevin Diaz • 202-408-2753