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Northwest Airlines Corp. CEO Doug Steenland said Tuesday that if Congress doesn't quickly act to give his company a break from its pension-funding obligations, it may have to terminate the retirement plans.Northwest already has frozen its pension plans but terminating them would dump them on the Pension Benefit Guaranty Corp. and result in substantial cuts in pension benefits for employees.
"If we don't get legislation promptly, we may have no choice but to commence the process of termination," Steenland told reporters after addressing Northwest employees.
Northwest has flown in hundreds of pilots, machinists, and flight attendants to Washington to lobby their congressmen and senators on the bill. Delta Airlines Inc. plans a similar effort.
Steenland and Delta CEO Gerald Grinstein plan to meet Wednesday with several of the lawmakers involved in the pension-bill negotiations.
Talks on the pension bill are coming to a head, in part because of pressure from the airlines to act.
Merrill Lynch predicted last week that if Congress doesn't pass the airline-pension-funding bill before its August recess, the two airlines might terminate all their pension plans.
Steenland said Tuesday that "if (the bill) is not done by the August recess, we are going to have start and give this a serious look."
Northwest needs to resolve its pension-funding issues, because "we are at that stage in our bankruptcy process where we have to start planning on our exit," Steenland said. He said the airline must "make sure we stay viable, to protect air service and protect all of our jobs."
If Congress does pass the bill, Steenland said Northwest could emerge from bankruptcy protection as early as the first half of 2007.
If the pension bill doesn't pass, "we will have to terminate our pensions and that will slow us down," Steenland said.
WCCO-TV Minneapolis-St. Paul
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