Editorial: Signs of trouble ahead for Northwest, Delta

Union difficulty gives a hint of how rocky mergers can be.

Last update: April 12, 2008 - 4:15 PM

It's too soon to weigh in on whether a merger of Northwest and Delta airlines is the best option for the companies, their employees and customers, and their home states. Without a detailed merger plan, that would be impossible guesswork.

However, the events of the past week have made clear that any marriage of the two companies is not likely to be seamless or without significant labor challenges.

Airline mergers are inherently difficult to pull off, which is why Delta CEO Richard Anderson wanted the pilot groups from the two airlines to work out an agreement on seniority before any merger announcement. When that process broke down, Delta, the larger of the two carriers, decided to negotiate a deal with its own pilots now and worry about Northwest pilots later. That's not a positive development.

According to Star Tribune staff writer Liz Fedor, Northwest pilots had urged their Delta counterparts to settle their differences through arbitration. Delta pilots, who have fewer years of service on average than the Northwest pilots, wouldn't agree.

In February, there was a four-year agreement on the table with the two pilot groups that would have included raises of more than 30 percent for Northwest pilots. Since then there's been little good news for the airline industry, which is battling a nationwide economic downturn and high fuel costs. In fact, many analysts see industry consolidation as the only solution to those problems.

We'd love to be optimistic that a merger of Delta and Northwest could create a stronger airline more able to compete globally, with benefits for employees, customers and Minnesota. But if the pilot negotiations are any indication of how this story will play out, there's more reason for pessimism.

Cancer in the news

There was some unintentional irony in the placement of two Page 1 stories in Friday's Star Tribune.

One story reported the news that the Minnesota Masonic Charities will give the University of Minnesota $65 million for cancer research over the next 15 years. The other piece detailed the Chapter 7 bankruptcy of the Parker Hughes Cancer Center after eight boom-and-bust years.

The Masons' donation is the largest private philanthropic gift ever given to the university, and school officials said it would have a major impact on the U's cancer center for years to come.

Although it wasn't surprising, the Parker Hughes liquidation came after a long struggle by the center to stay in business in the face of intense scrutiny by the state medical board, which found that the firm misused advertising and misled patients about the value of certain tests. The clinic also paid $150,000 to settle claims that it had overbilled Medicare and solicited kickbacks.

At the center of the controversy was founder Dr. Fatih Uckun, the brilliant former U scientist and cancer specialist, who told the Star Tribune that he hopes to continue treating patients and is interviewing for a new job.

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