MAC staff negotiated best possible agreement with the airline.
Last month, representatives of the Metropolitan Airports Commission (MAC) used the limited bargaining power they had to negotiate a relatively promising agreement with Delta Air Lines. That work should not be squandered.
In return for renegotiated bond-repayment terms, Delta tentatively agreed to establish "Delta North'' as a center of regional operations, with at least 10,000 employees and 400 daily flights. Some management jobs would be moved here from Delta's Atlanta headquarters, and the airline would retain flight-training and technology centers in the Twin Cities for at least three years.
By moving the Northwest Airlines headquarters to Atlanta, Delta is violating terms of its existing bond agreement with the MAC. Some MAC commissioners and DFL legislators apparently think that gives the commission significant leverage. Afraid not. Without a new agreement with the MAC, Delta could repay $245 million in bond debt that was tied to Northwest's headquarters and move on. Because the MAC would have to use the money to pay off the bondholders, there would be no real benefit to the agency or the state.
Delta CEO Richard Anderson could have chosen that route -- Delta has plenty of cash -- but he's too smart. Minneapolis-St. Paul is a key strategic hub for Delta, with a strong base of corporate travel. Anderson studied the Wells Fargo-Norwest merger in the 1990s. The headquarters moved to California, but Wells Fargo eventually employed more people here than Norwest did before the merger. It also preserved a good corporate image.
Many factors will determine whether the Delta-Northwest merger is successful, most critically the state of the world economy. But with Delta North, the Twin Cities would be positioned to benefit if Anderson and his team are successful. That fact was not lost on the MAC staff members who negotiated the deal now on the table.
At some point, Anderson will lose patience with the MAC and the Legislature. Minnesotans should hope that doesn't happen. The 15 MAC commissioners, most of whom were appointed by Gov. Tim Pawlenty, are likely to eventually follow his lead and support the deal. Legislators, who've scheduled hearings on the agreement for later this month, should do the same.
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