Delta president to Minn. lawmakers: HQ decision final

Delta headquarters
Delta headquarters in Atlanta.
MPR Photo/Annie Baxter

There's nothing the Minnesota Legislature could do to keep a merged Delta-Northwest headquarters in Minnesota, the president and chief financial officer of Delta Airlines told state lawmakers.

The Delta executive, Ed Bastian, told lawmakers Monday, in separate House and Senate hearings, that it was too early to estimate how many jobs would be lost at Northwest headquarters in Eagan once the merger goes through.

He repeated Delta's assurances that the Minneapolis-St. Paul Airport would remain a hub for the merged company, and that there would be no involuntary reduction of "front line" Northwest employees who perform customer service jobs.

That did little to satisfy lawmakers, who repeatedly and unsuccessfully asked Bastian for more details about how many headquarters jobs would be lost and what other Northwest divisions might be shuttered entirely.

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"When will Minnesota know?" asked Sen. Geoff Michel, R-Edina.

Bastian said it would take six to eight months for the merger to get federal government approval.

"We are early in the process of determining what corporate activities will be combined and how they will be combined," Bastian said. "Some of that work will be done in Minnesota, some of that work will be done in Atlanta. We're early in the process."

Asked by House Commerce Committee Chairman Joe Atkins, DFL-Inver Grove Heights, if there was any type of incentive package the Legislature could approve to convince the company to keep the merged headquarters in Minnesota, Bastian replied: "No, there is not."

Under financial agreements between Northwest and Minnesota dating to 1992, the carrier is required to keep its headquarters, a hub and a certain number of employees in Minnesota or else pay back more than $200 million in bond debt issued by the Metropolitan Airports Commission and forfeit airport rent concessions worth another $200 million through 2020.

Sen. Jim Carlson, DFL-Eagan, pointed out that it would take a legislative vote to undo those agreements.

Bastian replied that the company is preparing to negotiate a way out of the headquarters requirement with Gov. Tim Pawlenty's office, likely in exchange for keeping a hub in the Twin Cities and a certain number of jobs.

But he also said if it comes down to it, the merged company could afford to buy its way out.

"If we are required to pay it off, we will pay it off," Bastian said. "I don't know if that's in anyone's best interests at this point."

Bastian told lawmakers that the merger would result in a stronger airline that's more equipped to deal with skyrocketing fuel costs.

He said it would offer Minnesota and Upper Midwest customers more nonstop flights and foreign destinations, and he tried to assure union-friendly lawmakers that Delta -- which is not unionized -- would not stand in the way if employees of the merged carrier vote to unionize.

Steve Gordon, the president of the International Association of Machinists union that represents Northwest ground workers, said after Bastian's testimony that the executive "said all the right things" - but Gordon felt he was not forthcoming about the number of jobs to be lost in Minnesota.

"I think people need to start realizing this is going to have grave effects on the communities where Northwest employees live," Gordon said. "Not just on the employees -- on the communities."

(Copyright 2008 by The Associated Press. All Rights Reserved.)