Northwest has presented labor cost-cutting plans to all seven unions, including salaried employees receiving a pay and benefits cut of 5% to 15%. “We will absolutely share in the significant cost reductions that we have to take,” CEO Richard Anderson said in a recorded message to employees, according to an Associated Press report.
In a reassuring move, Anderson was also quick to point out there were no unexpected measures: “There aren’t any compensation surprises in store for anyone. We do not have funded trusts for management pension plans or any cash retention plans for the executive officers of the company.”
Executive compensation for the nation’s airlines has been making headlines recently. Workers at Forth Worth, Texas-based American Airlines nearly refused to accept $1.8 billion in annual cuts after finding out that the company had approved bankruptcy-proof pensions and huge bonuses to executives. This ill-timed disclosure at American created an air of animosity between workers and management and eventually led to the resignation of chief executive Donald Carty and a rescinding of the proposed plan (See Executive Comp Issue Could Ground AMR Labor Deal ).
American’s plan was very similar to one at its Atlanta-based competitor Delta Air Lines. However, Delta’s CEO Leo Mullin said at a shareholder meeting the company would not rescind its plan, claiming it is necessary to retain its management team at a crucial time for the industry, despite coming under fire from other airline executives for the size of his compensation package (See US Airways President Says Peers Make Too Much ).
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