Removal of Doug Steenland as CEO of Northwest Airl...

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Author: Oh Miss

Started: January 15, 2006, 9:41:16 pm

Target: OhMisss@hotmail.com

Category: Economy & Business

Supporters:

Goal:

100,000

Goal Progress:

Status

Closed

What you are seeing today at Northwest Airlines is an assault on the American middle class. While Northwest Airlines looks to the U.S. Bankruptcy Courts for protection, it seeks to outsource thousands of American jobs and impose excessive pay cuts. Northwest wants to outsource flight attendants jobs on 75% of its international flights to foreign nationals. It also wants to form another subsidiary, tentatively named “New Co.”, to operate planes with 70 to100 seats, aircraft now staffed contractually by Northwest employees. The new feeder airline would hire its own pilots and flight attendants to avoid employing more senior, higher-paid crews to staff those flights. Northwest's long-term plan for the ground workers union is to layoff thousands as part of a scheme to outsource their work and to create a new subsidiary, “Ground Co.”, to employ many gate agents and baggage handlers. The trickle down effect will cost hundreds, if not thousands, of other non-union employees to loose their jobs as well. Many of the employees who will loose their jobs have devoted decades of their lives to build Northwest Airlines. Northwest mechanics have already been replaced by SCABs, possibly compromising the safety and security of the flying public. As if this were not bad enough, under the leadership of CEO Doug Steenland, Northwest Airlines management is seeking to abrogate union contracts and impose pay cuts of 40% and more, while the corporate hierarchy enrich themselves with outrageous salaries and incentives.

In 2004, Doug Steenland, CEO and President of Northwest Airlines received $4,421,480 in compensation for his services. With only 14 years of vested service he will receive $947,417 in pension payments. He is guaranteed three pensions: the regular pension plan, his excess pension plan and his supplemental executive retirement plan. Other perks include lifetime health-care coverage and travel benefits.

Mr. Steenland, sold 110,021 shares of Northwest stock worth $608,169 between February and July 5, 2005. On August 4, 2005, just 40 days before seeking bankruptcy court protection, NWA awarded Mr. Steenland 90,000 shares of "phantom" stock* worth $418,842.(2)

To further line the pockets of the “corporate elite” on September 14, 2005, NWA filed several documents with their bankruptcy petition. Among these is a declaration by Neal Cohen, NWA Vice President and Chief Financial Officer asking the bankruptcy judge to allow NWA to continue paying executive incentives of $20,000,000.(4)

In addition, a recent lawsuit “accuses Northwest CEO and director Doug Steenland, chief financial officer Bernard Han, chairman Gary Wilson and director Alfred Checchi of selling company stock for proceeds of more than $30 million while in possession of nonpublic information about Northwest’s plans to file for Chapter 11 bankruptcy. The Northwest officials also allegedly made false and misleading statements about the company’s financial prospects, according to the suit.”(3) This is only the tip of the iceberg.

“Northwest’s CEO Steenland began his career working for the Office of General Counsel for the secretary of the Department of Transportation when the Democratic administration of President Jimmy Carter was preparing the deregulation of the airline industry. He later joined a top law firm in Washington DC, which represented Pan American Air Lines during the merger frenzy that preceded the company’s bankruptcy declaration, and later represented an investor group that organized the leveraged buyout of Northwest Airlines in 1989.”(1)

Last year “Steenland hired Barry Simon as the company’s executive vice president and general counsel. Simon earned his credentials as an executive at Continental and Eastern airlines, where he served under corporate raider and union-buster Frank Lorenzo. In 1983 Continental filed for bankruptcy—despite the airline’s $60 million in cash reserves—in order to exploit a provision in the Bankruptcy Code allowing Lorenzo to abrogate his contracts with the unions. Simon directed Continental’s legal strategy when it emerged from bankruptcy a second time in 1991.

Simon also played a leading role in the bankruptcy of Eastern Airlines, which stopped flying in 1991 following the bitter strike by unionized mechanics. At the time, Lorenzo and his team stripped the airline of valuable assets and sold them at fire-sale prices to Continental.”(1)

The Eastern and Pan Am scenarios would seem to be part of Mr. Steenland’s “Checklist for Our Future.”

“The top personnel of the airline industry are chosen, and highly compensated, not because of their ability to manage complex organizations or to lay out a long-term corporate strategy. Instead a definite social type has risen to the top, whose only qualifications are its acuity for slashing tens of thousands of jobs and guaranteeing the quickest and largest payoffs to Wall Street.”(1) Doug Steenland and his cronies are making millions of dollars on the backs of Northwest employees, their families and the communities in which they live, looting company assets to enrich themselves.

The future success of Northwest Airlines depends on the goodwill of it’s employees, who through decades of dedication have built this company. Mr. Steenland’s adversarial relationship with the employees at NWA is a detriment to that future success. He is nothing more then a corporate raider who views the loyal hard working employees of this once great airline as a liability.

Therefore, we the undersigned demand the immediate removal of Doug Steenland from every capacity that could conceivably be held by an individual within any division associated with Northwest Airlines or its affiliates.

We the undersigned, feel that Mr. Steenland has done nothing to support the stockholders or the employees of Northwest Airlines or their affiliates.

Further, we feel that Mr. Steenland has acted inappropriately in his sale of personal stock, given the nature of his inside information derived from his and the board of directors planed bankruptcy.

In addition to Mr. Steenland, and the current Board of Directors of Northwest Airlines and their subsidiaries; we the unsigned feel a formal investigation by the SEC is warranted and should be acted upon or implemented immediately.

Additionally, we require that the company actually negotiate a settlement, “NEGOTIATE” being the key word, with the unions left in the employment of Northwest Airlines proper. The demands of the Steenland Leadership are excessive and cannot be tolerated.

We seek this relief on behalf of the stockholders of NWAC, the remaining work groups employed by NWA as well as the general public, to “secure our future” and the future of Northwest Airlines.

Sources:

(1) http://www.wsws.org/articles/2005/sep2005/nwa-s19.shtml
(2) http://www.pfaa.com/News/ann/ExComp/Phantom.asp
(3) http://milwaukee.bizjournals.com/milwaukee/stories/2005/12/19/daily31.html
(4) http://chapter11.epiqsystems.com/WebPortal/Docket/DocketList.aspx Docket 10 Filed 9/14/05

* “Phantom stock is defined as a cash payment equal to the average closing price of a share of Common Stock given a certain set of criteria determined by the Board of Directors of NWA.” (2)