The Brancatelli File



September 18, 1998 -- As Northwest Airlines struggles to get back into the skies after its acrimonious pilots strike, an interesting tale of sex, lies and videotape has been left behind for public inspection.

Well, okay, I'm lying about the sex and videotape--I got the Northwest file confused with my Clinton file--but there's plenty of salacious airline detail to go around.

The settlement of the pilots strike is hardly the end of Northwest's labor woes. Five other unions at the airline are working on expired contracts and are eager to do battle with management. Of most immediate interest are mechanics. They've already voted down one contract offer this summer and their union is pressing the National Mediation Board to declare an impasse and start a 30-day "cooling off" period. Then the mechanics will be free to strike and Northwest would most likely be forced to shut down again.

Let's give Northwest credit for giving us credit. Aware that its tattered image for customer service was all but destroyed by the shutdown, Northwest made some generous face-saving moves on the frequent-flyer front.

Travelers who held a Northwest ticket but were forced to re-book elsewhere during the strike will still receive WorldPerks miles. You can get credit for the missed flights by picking up a form at a Northwest ticket counter. Or do it at the Northwest Web Site.

Northwest even went a step further by extending the life of banked miles. All WorldPerks miles set to expire on December 31, 1998, will now be valid through December 31, 1999.

We're used to seeing feuding parties in a burning house throw gasoline at each other, but the fiery rhetoric lobbed by the pilots and Northwest was especially ugly--and, in many cases, patently untrue.

The pilots, for example, claimed that their desire for record compensation was no odder than the fact that "Northwest CEO John Dasburg was the highest compensated airline CEO last year." Not true. I've pored over all the relevant documents--especially the Schedule 14A and 10K forms filed with the Securities and Exchange Commission--and Dasburg's compensation in 1997 was unremarkable. Now executive compensation being what it is--a morass of velvet-lined stock options and gold-plated perks specifically designed to mislead and deceive--I went to pilots and asked for the analysis they used to back up their claim. Not surprisingly, I haven't heard back from them.

And then there's the claim by Northwest's lead negotiator, Richard Hirst, that the pilots were hell bent on a walkout. "I think they have been following a strike strategy all along," he told The New York Times a week into the strike. Not true. The pilots worked almost two years on an expired contract, not exactly the strategy pursued by workers rabid for a walkout.

During the strike, Northwest chief financial officer Jim Lawrence abruptly resigned. He was immediately replaced by Mickey Foret, who has the required pedigree to work in Northwest management: He once was an executive for Frank Lorenzo, the man who almost destroyed commercial aviation in the 1980s. At least six of Fast Frankie's boys are in key positions at Northwest now and they run the carrier the way Lorenzo ran Continental and Eastern. The Northwest crew has upstreamed cash out of operations, slashed passenger service, destroyed labor relations and firmly entrenched the airline near the bottom of the Department of Transportation's (DOT) performance ratings. Lorenzo must be so proud.

The federal Essential Air Service (EAS) subsidizes airlines to fly on routes to small communities. How did our tax dollars work during the Northwest strike? Not too well, thanks to the outrageous conduct of the airlines involved and the lack of leadership at the Department of Transportation.

On August 18, less than two weeks before the pilots strike, two Northwest Airlink commuter carriers, Express I and Mesaba, announced they would suspend flights if Northwest was struck. Although Express I is a Northwest subsidiary and Mesaba is 30 percent owned by Northwest, neither carrier would be struck. Their proposed shutdown was entirely voluntary.

Express I and Mesaba fly more than a dozen EAS routes and federal regulations require them to give 90 days notice before substantially changing or eliminating service. Did DOT challenge the carriers when they made their plans public? Of course not.

When the strike came, Express I and Mesaba did exactly what they said they'd do. Like Claude Rains in Casablanca, the DOT was shocked--shocked!--by the shutdown. It ordered Express I and Mesaba back into the skies.

The airlines refused to comply and DOT went to court. To further exacerbate the situation, Northwest, which provides the ground support for its commuter serfs, said it didn't know if it could provide the necessary service because of the strike. No one apparently noticed that Northwest didn't miss a beat in providing exactly the same support services during the strike to KLM, its international partner.

The strike ended with the EAS matter still in court.

Why do I think we'll be right back where we started a month or so from now?

This column originally appeared at

Copyright 1993-2004 by Joe Brancatelli. All rights reserved.