[Congressional Record (Bound Edition), Volume 151 (2005), Part 15]
[House]
[Pages 20754-20755]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           NORTHWEST AIRLINES

  The SPEAKER pro tempore (Mr. Kuhl of New York). Under a previous 
order of the House, the gentlewoman from Michigan (Mrs. Miller) is 
recognized for 5 minutes.
  Mrs. MILLER of Michigan. Mr. Speaker, the American airline industry 
is struggling, absolutely struggling in the face of very high fuel 
prices, of pension costs, and fierce competition. Delta and Northwest 
Airlines have recently filed for bankruptcy protection under chapter 
11. United Airlines also recently got a bankruptcy court to severely 
discount the value of its employee pensions. Clearly, the airline 
industry needs some help, and they need some leadership. But an article 
that I read yesterday forces me to question the leadership of certain 
executives in the airline industry.
  Gary Wilson is the chairman of Northwest Airlines, a role where he is 
supposed to be providing leadership to his company. Northwest Airlines 
is currently subject to a work stoppage by mechanics and cleaners over 
wage concessions and job reductions. And now Northwest has approached 
their pilots and their flight attendants asking them to take 
significant wage cuts. Earlier this year, Northwest Airlines stopped 
funding their defined pension benefit program, only funding their 
employees' 401(k) program, and I am sure that the 401(k) was also 
buying plenty of Northwest stock. And what was Chairman Gary Wilson 
doing during this time with his 4.3 million shares of company stock? He 
was selling that stock.
  Mr. Speaker, today, in the Detroit Free Press, there is an article, 
and the title is ``Northwest Airline Chief Sold Shares Just Before 
Bankruptcy.'' The article says: ``Less than a month before Northwest 
Airlines Corporation filed for bankruptcy, its chairman sold nearly a 
third of his remaining shares.''
  Gary Wilson was not showing faith or confidence in the company that 
he is charged with leading. Instead, he was dumping his stock before 
his company went under. And I wonder if the employee 401(k) was 
selling, or even if it was allowed to sell at the same time.

[[Page 20755]]

Mr. Wilson sold his shares at an average of $5.45 per share, and just 
yesterday that stock was trading for 84 cents per share.
  Northwest Airlines is a major carrier in the Detroit, Michigan, 
market; and it serves my district. We have been hearing all summer long 
that Northwest was in trouble and that it could be forced to file for 
bankruptcy protection. Well, what took so long? One has to wonder if 
the bankruptcy filing was delayed simply so executives like Mr. Wilson 
could sell their stock to make sure they got their money before the 
company went out. That is not leadership; that is cowardice or worse.
  The employees and the customers of Northwest deserve better. And 
while Northwest has been asking employees to make concessions in their 
pensions, they have not been asking the same of their executives. In 
fact, this past July it was reported that the supplemental pension plan 
that covers the company's CEO was not subject to a pension freeze. That 
pension was slated to give the CEO nearly $1 million a year if he 
retired at the age of 65.
  That was reported again in the Detroit Free Press on July 16: 
``Northwest Airlines to Freeze Pensions for Salaried Staff.'' Not 
affected by the freeze is the supplemental pension plan that covers CEO 
Doug Steenland, among others. In its last annual report, Northwest 
indicated that Steenland was on track to receive an annual pension of 
$947,417 a year if he retires at age 65.'' And ``The airline has said 
that such generous pensions are needed to recruit and retain top 
executives.''
  Well, based on those examples, I do not think Northwest has done a 
very good job of attracting the best executives. Mr. Speaker, we need 
strong airlines in this country. We also need competition. We need 
safety and quality customer service in the airline industry. Of course, 
employees need to know if sacrifice is needed in the face of increasing 
costs and competitive pressures, but so do executives. They should be 
setting the tone for the company, and they should lead by example. They 
should not cut and run in the face of trouble.
  What is happening at Northwest Airlines at its very highest levels is 
disgraceful.

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