MPR: Hands Off, Hands On

Hands Off, Hands On
By Amy Radil
June 6, 2000

State leaders are pressuring Governor Ventura to work at preventing a possible Northwest Airlines merger, but the governor is steering clear of the fray. Minnesota Attorney General Mike Hatch says the proposed merger announced between United Airlines and US Airways sets a dangerous precedent, and he's working against its approval. Hatch says approval of the merger would raise fares and set off a domino effect among carriers, including the reported talks between Northwest Airlines and American. Hatch and former governor Arne Carlson both say Governor Ventura has a role to play in working against a Northwest merger. But the governor has a different philosophy, he says private businesses have the right to make decisions and he doesn't plan to get involved.

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MINNESOTA ATTORNEY GENERAL Mike Hatch fears the proposed merger between United Airlines and US Airways is just the first step in an industry consolidation that could reduce the number of major carriers to three. He says the reported talks between Northwest Airlines and American bear out his theory.

Hatch is trying to prevent the merger by "banging pots and pans together as loudly as possible." He's sent a letter to assistant U.S. Attorney General Joel Klein, the instigator of the Microsoft anti-trust suit, saying the airline mergers violate anti-trust law and should be stopped. Hatch sent copies of the letter to Minnesota's congressional representatives and to attorneys general around the country in hopes of forming a joint lawsuit. He says his first task is getting the word out.

"We're looking for friends," says Hatch. "We're going to be calling unions, we'll be calling pilots, we'll be calling states, we'll be calling Congress, we're going to say, 'Is there an antitrust law in this country, because if there is, this is where it ought to occur and if it doesn't occur here, throw it out the door.'"

But in his search for friends, Hatch has yet to cross the hallway to Governor Ventura's office. He says he hasn't been in touch with the governor, but notes that Ventura's media draw could certainly help this issue. He says such involvement doesn't have to mean offering subsidies or state aid to Northwest.

"Rudy Perpich made a name for himself as a governor, as a person who could build an economy, because he was out there knocking on doors of business and encouraging them to come in. You don't have to write out a check to help economic development; what you can do is just be there, be accessible, be open, and communicate, and I do think that's an important part of the office."

Hatch says the proposed airline mergers will have consequences both legally and in terms of economic development. He says he can pursue the issue in the courts, but the economic consequences to the state are more Ventura's arena.

"If I were governor, I'd be spending 23-and-a-half hours a day on this one," says Arne Carlson, who isn't governor anymore. On Minnesota Public Radio's Midmorning program, Carlson said a merger between Northwest Airlines and American could have dire consequences for the state. Carlson says Minnesota would likely lose its hub and its corporate headquarters, resulting in layoffs and more cumbersome travel for residents. "I would be on the telephone to the leadership of Northwest Airlines, I would try to get the best insights I could from the analysts, and find out how likely this will play out, what options do we have, what Minnesota can do to make sure if there are some changes made that those changes are not adverse to the best interests of the people of Minnesota, but I think this is going to go on for quite awhile."

"There is no role for the governor or the state of Minnesota at this time."

- John Wodele
Ventura spokesman

Carlson says under the terms of Northwest's 1991 state bailout, the airline must retain its Minnesota headquarters until its debts - estimated at $340 million - are paid off. But he says if American acquired Northwest, payment of its debt could be part of the deal and the state would lose its hold on the company.

But despite pressure from Hatch and Carlson, Ventura is sticking with the approach he articulated in hearing of the LTV Steel shutdown in northeast Minnesota; he maintains government should stay out of private business decisions. His spokesman John Wodele says Ventura supports Hatch's efforts, but doesn't plan to involve himself or his commissioners.

"Business development and the state's role can be very tricky, and it is a judgment call as to when the state should or can get involved," says Wodele. "In this particular case in the ongoing merger now or the proposed merger or any potential mergers, it is the governor's belief that there is no role for the governor or the state of Minnesota at this time, other than what might be considered a legal responsibility on the part of the attorney general."

Wodele says the attorney general's roles include consumer watchdog, so Hatch should evaluate the effects of the mergers on Minnesotans.

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