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Northwest to cut 10,000 jobs in wake of terrorist attacks
by Staff and Wire Reports
September 21, 2001

Northwest Airlines has made it official, announcing 10,000 job cuts. Like the nation's other major airlines, Northwest says it has no choice but to slash costs because of the plunge in demand for air travel. Northwest's cuts will hit its home state particularly hard, with 4,500 jobs eliminated.

Hear Northwest Airlines CEO Richard Anderson's news conference announcing the cuts. (9/20/01)

It was immediately difficult to figure who'll stay and who'll leave NWA, since seniority "bumping" will take several days to determine who'll end up where. Read more.

Congress struggled Friday to resolve some last-minute glitches standing in the way of passing a $15 billion relief package aimed at helping the airline industry. Read more.

STATE HELP Gov. Ventura and state leaders form a new panel to look at possible state assistance for the airline industry. Read more.

Twin Cities airport officials say the decline in air travelers since last week's terror attacks in New York and Washington is cutting into expansion plans. Airports Director Jeff Hamiel says the Metropolitan Airports Commission has approved plans to delay some construction projects. Listen to his comments.
(Photo courtesy of Northwest Airlines)
Calling it a "difficult day" for Northwest and its employees, CEO Richard Anderson told reporters gathered at the airline's corporate headquarters in Eagan, that there was no way around the workforce reduction.

"The events of September 11th fundamentally changed our business and I believe significantly impacted the way we live our lives in the United States," Anderson said. "It's always difficult, and next to watching the horrific events of September 11th on television, the next most difficult thing for all of us at Northwest is the impact it has on the people's lives at Northwest."

Other airlines and aircraft maker Boeing have collectively announced more than 109,000 job cuts since the Sept. 11 attacks. Delta is the only major airline that has not done so, but it has warned cuts are looming.

Eagan-based Northwest - the nation's fourth-largest airline, with 53,000 employees, including 21,000 in Minnesota - had already announced shortly after the attacks that it would reduce its flight schedule. American, Continental, Delta and United have cut their schedules 20 percent.

Although improving, Anderson says passenger numbers are extraordinarily low. On average, Anderson says, Northwest planes are flying half empty, even with the 20-percent flight-schedule reduction. Anderson declined to comment on the status of advance ticket sales.

Officials at Northwest's major unions say the job cuts break down like this: 2,800 flight attendants, at least 940 mechanics and aircraft cleaners, 850 pilots, 3,700 reservations agents, baggage handlers and other ground workers. Northwest says 1,000 management jobs are also being eliminated.

As many airlines cut jobs and other costs, industry analyst Joel Denny of U.S. Bancorp Piper Jaffray, says Northwest is particularly well positioned, because of its relatively strong balance sheet. "They've got was over $2 billion in cash. They're in a very solid position for going into a downturn. They're very well able to cut their expenses. Everybody is cutting on the labor side, but one of the things that they can do is when they put planes on the ground, most of those are owned aircraft, older aircraft that are fully depreciated, so it doesn't cost them money to leave them on the ground," according to Denny.

Northwest will also benefit from its share of the multi-billion dollar federal airline industry bail-out package.

Before the cutbacks, Northwest had about 1,700 daily departures systemwide; the new schedule is about 1,400 daily flights. One analyst estimated Northwest was spending $22 million a day from reserves.

Many airline workers are taking the bad news of job cuts with an understanding their employers have no option. "I don't think anyone is pleased to lose their jobs," said Northwest's pilot's union spokesman Hal Meyers, who says the cuts are not surprising.

"We're sort of off the map here in terms of events. The things that have happened are really unprecedented in the industry and Northwest's response here is pretty consistent with that other carriers. We'll just have to see. Hopefully the American public will chose to get back on airplanes and we'll get the airline industry back on its feet people will be traveling again," Meyers said.

Many airline workers are taking the bad news of job cuts with an understanding their employers have no option. "I don't think anyone is pleased to lose their jobs," said Northwest's pilot's union spokesman Hal Meyers, who says the cuts are not surprising.
(MPR Photo: Mark Zdechlik)
O.V. Delle-Femine, national director of the Aircraft Mechanics Fraternal Association, said union members have a no-layoff clause that he believes the airline violated. The union will file a grievance with the airline and, if it's still unhappy, with a federal arbitrator who would decide whether the contract was violated, Delle-Femine said.

"We want to help them. We understand the urgency of the situation, but they have to go by the contract," Delle-Femine said.

CEO Richard Anderson says the mechanics' decision is not welcome news. "I would sure hope that everybody understands this isn't something you relish doing. This is the last thing you want to do and this isn't about individual positioning with respect to the airline. It's about the future of the airline and I would only hope that we all row the boat together," he said.

Northwest has offered thousands of workers unpaid leaves of absence in hopes of reducing the need for actual layoffs. Anderson says management won't know how many workers will lose their jobs until it can assess just how many will be voluntarily stepping aside.

MPR reporter Mark Zdechlik and the Associated Press provided material for this report.