Northwest Mechanics Call Airline's Decision Not to Repay $226 Million Debt to Employees Unfair

Aircraft Mechanics Fraternal Association (AMFA) Local 33, serving Northwest and Mesaba Airlines, called today's decision by Northwest's board of directors not to repay a $226 million debt to employees unfair.

Northwest earlier announced that its board would vote on August 1 on repurchasing shares distributed in 1993 to employees in exchange for wage and benefit concessions. "The 1993 agreement was tantamount to a 10-year, interest-free loan by employees to the company," according to AMFA Local 33 President Jim Atkinson.

"The board's decision not to repay this good-faith loan, and to force employees to hold onto the stock instead, is unfair. Northwest's board had no problem approving management bonuses, stock options and even 'phantom stock' worth many millions of dollars, but when it comes to repaying a long-standing debt to employees, they suddenly plead poverty. To our knowledge, nothing in the law prevents Northwest from repaying this debt; Northwest has simply chosen not to do so," Atkinson said. "It's harder to maintain morale when executives seem more concerned with feathering their own nest than with the welfare of the airline and its employees. We have people who are laid off and were counting on this repayment money."

FMI: www.nwa.com