Congress Warned of Possible Pension Defaults
Minneapolis Local 1833 members listen
closely to testimony at a House Health, Education Labor and Pension
Subcommittee on the potential impact of a Northwest/Delta merger.
(left to right) Lee Largent, Ken Hooker, Donna Northup, Bob Bennek
The IAM warned Congress this week that a Delta Air
Lines/Northwest Airlines merger would jeopardize workers’ pensions
and the stability of the government’s pension insurance system.
“Northwest’s 12,500 IAM-represented employees are the only group at
the airline with an active defined benefit pension plan,” said
Transportation GVP Robert Roach, Jr., at a House Health, Education
Labor and Pension Subcommittee hearing on the impact the proposed
merger will have on workers. “Our members’ pension plan is at risk
if the merger is approved.”
Noticeably absent from the hearing were the CEO’s of both companies.
“The fact that Richard Anderson and Doug Steenland chose not to
attend the only hearing that focused on the merger’s impact on
employees shows how low a priority employees are in the merger,”
said Roach. The airlines instead sent individuals who claimed they
were unqualified to answer several of the Committee’s questions.
In addition to the potential loss of the current pension plan for
Northwest’s 12,500 IAM members, the merger puts the solvency of the
Pension Benefit Guaranty Corporation (PBGC) into question.
 If
the combined giant airline fails and needs bankruptcy court
protection, the frozen company-sponsored pension plans could be
forced onto the PBGC. This would burden the PBGC with more than
$15.6 billion in additional liabilities on top of
its $13.1 billion deficit for fiscal year 2007.
“Northwest’s IAM-represented employees have enjoyed the benefits of
a secure union work environment for more than 60 years,” said Roach.
They labored for the day when they could retire with dignity and
financial security. The ill-advised Delta-Northwest merger will
jeopardize everything they have worked for while destroying two
once-great airlines and threatening the solvency of our nation’s
pension insurance agency.”
The IAM’s complete testimony is available at
www.goiam.org/mergers.
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