Companies like NW Airlines. Force your employees to take 40% paycuts, then give your management team multi million dollar stock options.
When Northwest Airlines emerges from bankruptcy today, it will be the first time since 2002 that no major U.S. carrier will be in Chapter 11.
But Patricia Friend, president of the Association of Flight Attendants, told Northwest employees Wednesday that there is no cause for celebration because the restructuring there and at three other major airlines "occurred on the backs of airline employees who made crippling sacrifices."
About 200 Northwest employees rallied at the State Capitol to oppose about $300 million in stock and options recently awarded to the carrier's 400 top executives.
CEO Doug Steenland is scheduled to receive $26.6 million in stock awards that vest over four years, while four other top executives will each receive equity grants of $10 million to $13.5 million.
"This management team is as morally bankrupt as when they took you into bankruptcy," said Capt. John Prater, president of the international Air Line Pilots Association.
Employees congregated around a 25-foot-tall inflatable rat -- dubbed the Northwest executive mascot -- for their protest.
A sign around the rat's neck read: "NWA Executives, Stealin' More Than Cheese."
The rally was held just hours after Northwest flight attendants became the last major work group to ratify a concessionary contract, with the pact passing by 104 votes.
Andy Wisbacher, vice president of the Northwest branch of the Association of Flight Attendants, said that yes and no voters alike viewed the contract as "onerous." The contract, which provides the airline with $195 million in annual savings, was the last opportunity for attendants to secure a bankruptcy claim of $182 million before the carrier exits Chapter 11.
"Our choices were to suffer or to suffer more," Wisbacher said.
Trevor and Amanda Olson, Northwest flight attendants from Andover, brought their two daughters, Amelia, 2, and Annabella, 4 months, to the rally.
After the airline imposed cutbacks on the flight attendants in July, the Olsons saw each of their paychecks reduced by about $1,000 a month.
Since Annabella was born, the Olsons said the family has been squeaking by strictly on Trevor's take-home pay, about $2,000 a month. The couple has tapped into savings to help pay their mortgage and other living expenses.
Trevor Olson said he wants to find a job outside the airline industry.
Amanda Olson described the stock awards to executives as "lavish and disgusting."
She said it upsets employees to see executives get big stock allocations while "we are really struggling to make ends meet."
Dave Stevens, chairman of the Northwest pilots union, warned that the quality of customer service will erode unless management addresses its "demoralized, fatigued and angry" employees.
"It's bad business to antagonize your workforce," Stevens said.
Ken Hooker, a Twin Cities-based official with the International Association of Machinists and Aerospace Workers, said workers view executives as "taking the money right out of our pockets."
The carrier has said that the stock awards are needed to retain current executives and recruit new ones.
The stock awards also have the effect of aligning compensation with the company's financial performance, the airline said.
U.S. Bankruptcy Judge Allan Gropper approved the awards as part of the airline's reorganization plan.
Liz Fedor • 612-673-7709 •
lfedor@startribune.com