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St. Paul, Minn. — Northwest CEO Richard Anderson and President Doug Steenland received bonuses totalling a combined $450,000 last year. They received no increases in their $500,000 salaries, and no bonuses the prior year. Other compensation, including stock that can't be sold for years, boosted their total compensation nearly $2 million compared to the year before.
Over two years, the company has lost $1.2 billion and cut about 17,000 jobs. It's also asking unions for permanent cost reductions.
Gov. Tim Pawlenty criticized the executive pay increases at a meeting for Northwest employees facing layoffs organized by the state Dislocated Worker Program.
"I do think it's unfair for Northwest Airlines or other businesses who are laying off people and asking employees to take wage concessions to be giving their top management big raises and bonuses, so I don't think they should do it in the first place. And if they're willing to contribute it to dislocated workers program, that'd be great," Pawlenty said.
The Eagan Republican says he plans to tell the Northwest executives it would be a nice gesture to reject the increases. Minnesota House Democrats and union officials urged the executives to donate $2 million to the state's dislocated worker program, which is short on cash.
Ken Hooker, president of IAM local 1833, which represents 7,000 Northwest ground workers in Minnesota blasted the bonuses at a time when he says many members face hardship.
"These bonuses, which they think they deserve, is no more, really, than taking care of themselves. There's supposed to be performance. Where's the performance?" Hooker asked.
Northwest officials say performance pay is necessary to attract and retain the best management team. They say Anderson's pay is well below the roughly $12 to $13 million in compensation paid to the CEOs of Delta and Continental airlines, the next largest and next smallest airlines.
They also say Anderson is paid less than the CEOs at bankrupt United Airlines and US Airways.
But the payments provoked angry responses from laid-off Northwest workers at the displaced worker program meeting.
Mechanic Mike Tschida urged state officials to do something about the pay package. "You can't let somebody that's got that much control over our community be that brutal. It's just not right. It's just not right to let them pack money into their pockets. We've got people that are over... they've been pulled away from their jobs to go fight the war, and they're going to come back to no job."
Chris Farran and two other mechanics just drove back from the East Coast, where they found out they'd been laid off. They've been living out of suitcases in cities from Minneapolis to Boston, moving to keep their jobs as mechanics are laid off. Farran and his friend Nathan Caroland -- each with three kids -- say the prospects of finding similar work are "dismal."
"It looks pretty tough. Everything's flat-lining right now and everybody's holding off on hiring until the war situation is settled," Farran said.
"I mean there's nothing here at all for us," Caroland echoed. "I mean we just all got out of making $35 an hour. There's nothing in this industry that we can pick up doing whatsoever."
Caroland says he got into the airline industry after a previous career in computers.
"Now the airlines have gone downhill for me. So now I've gone through two industries that have completely fallen out of the sky. About the only thing I can think of is medicine these days. There's always somebody needing some help somehow. As kookie as it sounds, I'm going to end up a nurse probably, or something along those lines. You know, here I am wrenching away, or messing around on the computer, but now here I am going to be changing bed pans and sheets, because there's nothing else out there," he said.
State officials say the number of layoffs for which the state has received formal notification from Northwest has crept up by another 33 to a total of 2,023.