Politicians may be unable to stop NWA deal

Rep. Jim Oberstar
Rep. Jim Oberstar, D-Minn., said he will hold the Delta-Northwest deal up to "rigorous scrutiny," but there may be little politicians can do to stop it.
MPR Photo/Tim Pugmire

Minnesota politicians from both political parties reacted to the Delta-Northwest news on two fronts, at the state level and in Washington.

At a Tuesday afternoon Washington, D.C. news conference the Chairman of the House Transportation Committee, Rep. Jim Oberstar, D-Minn., conceded the Bush administration has decision-making power over the deal. Still, Oberstar was talking tough.

"Their argument of both carriers is, well, fuel prices have gone up and so we need a merger in order to cope with higher fuel prices," he said. "That just means a bigger airline with more fuel and more cost and costs then that they will have to shed in some way in order to compete in the marketplace. And when they crash, it'll be a bigger crash, much bigger than anything in the past."

In Minnesota, Republican Gov. Tim Pawlenty promised to "closely scrutinize" the proposed transaction and to "strongly stand up for Minnesota's interests."

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"They should make no mistake," he said. "We negotiated in good faith an agreement and an understanding with Northwest Airlines that they would keep their hub here as well as their headquarters. We expect them to fulfill those commitments. And if they don't, they're either going to owe us a substantial amount of money or we will expect them to renegotiate those commitments in a way that's favorable to Minnesota."

Pawlenty noted the State of Minnesota and Northwest have hub and headquarters agreements worth about $440 million.

Some members of the Minnesota Legislature are talking about a special session to take up the Northwest-Delta deal, and some are proposing legislative hearings. There's even a move by some state House Republicans to try to lure Delta's headquarters to Minnesota with hundreds of millions of dollars in tax incentives.

Back in Washington Sen. Norm Coleman was insisting any deal must protect Minnesota jobs.

"I approach this with a degree of concern that Minnesota's interests are represented," he said. "If they are not represented, this is a regulated industry, and I assure you that our voices will be heard. "

"There's very little they can do."

Sen. Amy Klobuchar said she has a commitment from the chair of the Senate Commerce Committee to hold hearings.

"I'm going to be very involved in pushing for commitment on the number of jobs," she said. "As you know these guys are looking out for the bottom lines of the airlines. That's what they're supposed to do. But I figure my job is to look for the bottom line of Minnesotans."

But Klobuchar conceded that force of law does not lie with Congress to block a Delta-Northwest transaction.

Forget the news releases and press conferences. The reality is that the Justice Department -- not scrambling Minnesota politicians -- will decide whether the Delta-Northwest deal will happen.

"You know it's really nice to have your own flagship carrier headquartered in your state," said law professor and former Justice Department employee Darren Bush.

But he said all the Justice Department will be looking at is the issue of competition. It's not the role of anti-trust regulators to worry about one state's loss of a headquarters or even the jobs the politicians are pledging to fight for.

"I would say good luck to them," he said. "I really think that's it very noble for them to try to protect the jobs of their citizens, but I think their approach is flawed. There's very little they can do."

Very little, Bush said, other than work to reinvigorate anti-trust laws which, he says, have tended to be "business friendly" under the current administration.

The two airlines say they're hoping to finalize their deal by the end of the year.

Members of the U.S. House will an opportunity to voice anti-trust concerns about the plan next week. The House Judiciary Committee task force is holding a hearing on competition in the airline industry, and heads of Northwest and Delta are on the witness list.