Cites High Debt Load Of Combined Airline, "Minimal" Savings

The union calls itself The International Association of Machinists, but it also represents baggage handlers, ticket and reservations agents, clerical employees and other workers at Northwest Airlines.

The Atlanta Journal-Constitution reports IAM has sent letters to significant shareholders of Northwest and Delta Air Lines, urging them to oppose Delta's buyout of Northwest.

Dissenting voices about that merger are, for the moment anyway, few-and-far-between... but the union points out the combined airline would face $15 billion in long-term debt and "provide minimal cost savings compared with the magnitude of the transaction." The letters also point to a drop in Delta and Northwest's stock prices since the merger was announced.

Union spokesman Joseph Tiberi says management needs to stay focused on running the companies and dealing with high fuel prices.

"The combined company will have a tremendous amount of debt and will be too busy trying to integrate two completely separate companies and two different cultures," Tiberi says. "...A merger will take management's eye off the ball and investors will lose."

Delta spokeman Kent Landers replied the merger will not generate any new debt, and will result an airline with,  "one of the lowest cost structures... and strongest balance sheets in the industry."

FMI: www.goiam.org, www.newglobalairline.com