Northwest Airlines
MORE...“FLYING WITH THE BANKRUPTCY BUZZARDS”
Sightings from The Catbird Seat
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December 20, 2007
Northwest Airlines Working With Nature Conservancy To Support Chinese Park
Northwest Airlines has launched its EarthCares program with The Nature Conservancy as its founding partner and China as one of its funding targets.
Northwest Airlines is making a US$1 million gift on behalf of its employees and customers to The Nature Conservancy, in equal payments, over the next three years. The airline says the gift comes at the request of NWA's corporate and individual customers, many of whom have voiced support for programs to offset and reduce carbon emissions. EarthCares will be Northwest's program for implementing new environmental initiatives, such as The Nature Conservancy donation, which will protect land in the Mississippi River Valley from future development and sequester and store carbon.
NWA's funds for China will be directed to Pudacuo National Park, China's first national park. Located in one of the most biodiverse regions of the world, China's first national park was established with the help of The Nature Conservancy. Pudacuo National Park in China's Yunnan Province will serve as a model for a new Chinese national park system.
The EarthCares program builds on many environmental initiatives that Northwest has already taken. Through NWA's US$6 billion fleet modernization program, the airline has reduced its carbon emissions by 25% since the year 2000.
"The Northwest Airlines EarthCares program is just one way we are doing our part to protect the environment — which is a priority for the airline, our employees and our customers. We are proud to bring together The Nature Conservancy and our customers in support of these strategic environmental land and water conservation projects," said Doug Steenland, Northwest's president and CEO.
June 8, 2007
BILL MOYERS’ JOURNAL
BILL MOYERS: Hello. Welcome to the JOURNAL.
We begin with some immortal words from a great American tradition. They were uttered just 20 years ago by Michael Douglas, AKA the Goliath of Wall Street Gordon Gekko:
GORDON GEKKO: "Greed for lack of a better word - is good. Greed is right. Greed works. Greed clarifies, cuts through and captures the essence of the evolutionary spirit."
BILL MOYERS: Gordon Gekko's words were ringing in my ears the other day as Northwest Airlines emerged from bankruptcy.
After 20 months of restructuring the company, CEO Doug Steenland rang the opening bell of the New York Stock Exchange.
DOUG STEENLAND: The best way to secure job security, the best way to secure security of your pensions and the best way to increase standards of living is for the airline to be very successful and profitable."
BILL MOYERS: And if you feather your own nest in the process---more power to you. On top of Steenland's salary, reported at half a million dollars or more last year, he will get a total compensation package of $26.6 million in stock.
That's $5.8 million in stock options and $20.8 million worth of restricted stock that will vest over the next four years. And his official next-of-kin — the company's four Executive Vice Presidents - were offered more than 10 million dollars each, on top of their salaries, if they stay on for four years.
Oh, yes, Gary Wilson, the outgoing chairman — who already has $21 million dollars from stock he cashed in just before the bankruptcy — will get a two million-dollar good-bye gift plus medical and dental insurance for life — that's right — for life.
As for the folks who merely fly the planes, fix the engines, and serve those meals — I mean, snacks — well, they took pay cuts of 20 to 40 percent, as well as curtailed medical benefits, fewer days off and frozen pensions.
JUDITH FISHER, FLIGHT ATTENDANT: When you have veteran employees that have given a lifetime of commitment to service and good employment to this employer. It made me really really angry. Very sick to my stomach when I my pension has been cut and frozen.
BILL MOYERS: No wonder Northwest pilots, flight attendants and machinists were out in protest on the steps of the Minnesota state capitol last week.
To keep the airline aloft, pilots increased their working hours by as much as 20 percent while taking a pay cut of 40 percent.
PROTESTORS: We built these airlines, we built this company. Let's take it back today.
BILL MOYERS: To make ends meet, pilot Ron Hay has to sell his house and move his family back to his wife's hometown in Texas.
RON HAY, NORTHWEST PILOT: Our CEO's $26.6 million is one complete annual payment to our pension fund. Our pension fund could be one more step closer to whole. The $25 million is probably in excess any funds needed to bring us back down to a medical benefit that we wouldn't have to pay anything.
BILL MOYERS: Amanda and Trevor Olson are both flight attendants, and they are already feeling the cuts to their medical benefits. To cover the birth of their second child they had to pay almost $4000 out of pocket — that's more than ten percent of a flight attendant's yearly salary which tops out at only $35,000 dollars a year.
AMANDA OLSON: It just kind of points to how disgusting, to me, the executive compensation plan is. That they can reap so much in stock options and pay. And we're not even getting a cost of living increase in the next five years of our contract.
BILL MOYERS: Three of Northwest's unions cried foul...and filed objections in us bankruptcy court — calling the management equity plan "obscene."
Forget it, Judge Allen Gropper decided. He ruled that rewarding $300 million dollars in stock to the top executives is not illegal or unfair.
To the contrary, he said, "any incentive plan that is intended to keep management from jumping ship and leaving for another company in today's market must be very generous… "
RON HAY, NORTHWEST PILOT: The court testimony was that our executives need to be compensated along the realm of executives at GM or Dell or other large corporations that create a profit through selling a product and growing their company. Right now, Northwest Airlines is on the verge of making a profit because they took concessions from-- primarily labor..and of course the materials that they purchase and the aircraft leasing etc.
BILL MOYERS: In fact, of the $2.4 billion dollars in expenses Northwest had to slash — cuts in worker's pay and benefits accounted for 60 percent.
And workers have very little ability to jump ship the way that management can.
RON HAY: It's taken me 20 years to reach this period. And if I were to quit and go to a competitor, I start over on probationary year, first year pay. And right now, that's in the lower 30s at most places. And I can't feed a family.
BILL MOYERS: Now it's true that CEO Steenland has to stick around for all of four years to get his stock -- worth more than 20 million dollars. But don't blame him for making off with all that loot - his board of directors made him do it.
DOUG STEENLAND, CEO NORTHWEST: The decisions that were with respect to executive compensation were made by the Northwest board. Were made by the compensation committee of that board which is fully independent. Management had no say no participation or involvement in that.
BILL MOYERS: Gordon Gekko wasn't quite so humble. Remember that scene in WALL STREET when Gekko's young disciple, Bud Fox (played by Charlie Sheen) discovers that Gekko plans to eviscerate Blue Star Airlines?
Bud's own father is a mechanic for Blue Star and it dawns on the son that his father is about to be hung out to dry...while Gekko is golden.
WALL STREET CLIP: Of course the beauty of this deal is the over-funded pension. Gekko makes 75 million dollars there. 15 million buys him the minimum annuity for $6000 employees and he walks away with the rest - I figure he'll clear 60-70 million dollars. Not bad for a month's work.
BILL MOYERS: As in the movies, so in real life: the big boss rakes it in...while the company's employees will continue to struggle for years to come.
Northwest is the last of four major carriers to come out of bankruptcy after the 9-11 terror attacks.
But it is not the first airline to use bankruptcy to keep operating while it cut costs, convinced creditors to exchange debt for equity, and rewarded executives after wringing concessions from the rank and file.
When US Airways emerged from bankruptcy in 2005 CEO Doug Parker was awarded almost six million dollars-worth of stock and cash.
Employees got pay cuts of up to 53 percent:
pilots' top salary is $120,000.
Mechanics earn at most $48,300.
And flight attendants' top salary is just over $34,000.
When United Airlines came out of bankruptcy in 2006, CEO Glenn Tilton was awarded stock options and awards that, over four years, would earn him almost $40 million dollars. More than the airline's $25 million dollar profit that year.
Employees, on the other hand, got pay cuts of up to 50 percent...
Only Delta Airlines CEO Gerald Grinstein didn't follow the Wall Street script.
When Delta climbed back from bankruptcy this past April … it's employees took pay cuts of up to 40 percent. And Grinstein actually turned down 10 million dollars in compensation.
REP. ELLISON (D-MN): Let me tell you in 1980 a CEO made 40 times the average worker today they make about 400 times. This is wrong.
BILL MOYERS: Back in Minnesota, a new member of Congress, Keith Ellison, is rallying Northwest's unhappy employees.
REP. ELLISON (D-MN): Let no one be in doubt about what's happening here stock options for them … paycuts for us. To hell with that. We can't have that anymore. No. No.
KATE DAY, FLIGHT ATTENDANT: You know, we know what's right. And when the rest of society catches on that this isn't just about your flight attendant, it's about your daughter. And it's about your son. And it's about what kind of life and fairness and compensation you expect for your children that they will see that this is everyone's fight. This is not about a flight attendant contract, or a pilot contract or a mechanic contract. It's not any more even about the money. It's about what's right in our culture. What's right?
GORDON GEKKO: "I look at you and I see myself. Why?"
BUD FOX: I don't know.
http://www.pbs.org/moyers/journal/06082007/transcript4.html
September 11, 2007
NORTHWEST FLIGHT ATTENDANTS OBJECT TO OUTRAGEOUS BANKRUPTCY FEES
Company Attorneys and Consultants seeking Millions More
Washington, DC – Northwest flight attendants, represented by the Association of Flight Attendants-CWA (AFA-CWA), today stood squarely in the path of outrageous enhancement fees demanded by four firms that represented Northwest Airlines during its restructuring.
The firms were demanding millions of dollars in additional fees for services for which they have already been compensated. The Court agreed with the flight attendants’ objection and denied two of the fee applications, delaying until later the hearing on two others.
“If AFA-CWA had not objected today, more millions of dollars of our concessions would have been wasted on these outrageous fees,” said Kevin Griffin, Northwest's AFA-CWA Master Executive Council President. “Management did not object to these fees, so the money is clearly available. Since they will not have to pay these ridiculous bonuses, we think it is far better spent on returning some of the pay and workrules the Northwest flight attendants have sacrificed.”
The four firms, Cadwalader, Wickersham & Taft LLP; Otterbourg, Steindler, Houston & Rosen, P.C.; FTI Consulting, Inc; and Lazard Freres & Co. have already received tens of millions in fees. The cost of their professional services soaked up a significant portion of the lost wages and benefits for all Northwest employees. Flight attendants alone are working under 40 percent wage and benefit reductions.
The Court recognized that it was the sacrifice of the employees and other factors -- not just the work of these firms -- that helped turn Northwest around. The Court denied the applications from Cadwalader and Otterbourg. The other firms’ applications will be heard at a later date. In so ruling, the Court noted the importance that the process be perceived as a fair one, clearly concerned that these outrageous fees would have diminished the fairness of the entire process.
“This is yet another example of why corporate bankruptcy reform is so badly needed in our country,” said Griffin. “Here is a company that begged and pleaded with its employees to give up their hard earned wages and benefits so that the airline could survive. The greed has to stop and AFA-CWA is working with supporters in Congress to make sure the laws are changed. This cannot continue to be standard practice in corporate bankruptcy cases.”
The hearing on the fee application was held at 11:00 a.m. Tuesday before Judge Alan Gropper of the U.S. Bankruptcy Court for the Southern District of New York. AFA-CWA was joined by the U.S. Trustee and representatives of Northwest’s bondholders in opposition to the fees.
http://www.afanet.org/default.asp?id=927
July 29, 2007
Northwest Airlines pilots stay home;
200 flights dropped
Northwest Airlines' cancellations continued Sunday, with more than 200 flights dropped as pilots stayed home, saying they were pushed to the limit of hours they are allowed to fly each month.
The airline blamed the pilots, who in turn blamed the airline for failing to address staff shortfalls
Northwest, which emerged from bankruptcy reorganization in May, canceled 514 flights Friday through Sunday evening.
Northwest canceled more than 2,000 flights in June, many of them toward the end of the month.
Federal rules set the monthly maximum at 100 hours. But if pilots fly 100 hours a month year-round, they would surpass the 1,000 hours of annual flight time allowed.
Airline spokesman Roman Blahoski said pilots weren't being asked to fly more than 90 hours a month.
September 14, 2005
Northwest files for bankruptcy
High fuel prices, lack of union wage cuts takes No. 4 carrier
into bankruptcy minutes after Delta
By Chris Isidore, CNN/Money senior writer
NEW YORK (CNN/Money) - Northwest Airlines, hit by a spike in jet fuel prices and an inability to win wage concessions from its unions, filed for bankruptcy court protection minutes after rival Delta also filed under Chapter 11.
The twin filings mean four of the nation's major airlines are operating under protection from creditors, and that nearly half of the U.S. air capacity is running on bankrupt carriers.
Northwest had been flying for nearly a month with its unionized mechanics on strike, and it said it expected to maintain its normal flight schedule in bankruptcy, limiting the impact on flyers. But some smaller cities now served exclusively or primarily by Northwest could be hurt as the airline trims its operations going forward.
Northwest and Delta follow No. 2 United Airlines and US Airways. Fierce airline competition that has kept fares low and now Hurricane Katrina, which sent jet fuel prices soaring, produced a double blow to the industry.
"The US airline industry has changed permanently, and Northwest must change with it." Northwest CEO Doug Steenland said a press conference Wednesday. "Clearly this is the right and the necessary decision."
Steenland said there would definitely be layoffs at the Minnesota-based airline before the end of 2005, though he didn't give any range of the depth of the cuts.
Northwest filed for protection under Chapter 11 of the bankruptcy code, under which a company is protected from creditors as it seeks to cut costs and reorganize....
The most recent financial report from Northwest showed it had $2.1 billion in cash on hand as of June 30. While that's down from $2.5 billion at the end of 2004, it's well above the $1.7 billion in cash and short-term investments its larger rival Delta showed on its balance sheet. Still Steenland said Wednesday, "We are no longer an asset rich company."
But Northwest has been playing hardball with its unions. It virtually pushed its union mechanics into a strike, making an offer calling for 25 percent pay cuts and slashing half of the union's jobs at the carrier. It hired 1,200 replacement workers, as well as managers and outside contractors, ready to do the union's work as soon as the strike started.
"Northwest said, 'Enough of this, we'll handle it now,'" said airline consultant Michael Boyd. "This was brought on by fuel. They don't have any structure problems. Its route system is golden, it's bulletproof."
The bankruptcy filing gives Northwest a chance to force unions representing pilots, flight attendants and other ground workers to accept deep pay cuts. Northwest said earlier this year it needed an additional $1.1 billion in labor cost savings to avoid bankruptcy. It recently warned that the spike in fuel prices meant $1.1 billion wasn't enough to avoid bankruptcy.
The filing also gives Northwest a chance to dump some of its pension obligations on the federal agency that guarantees private pension plans. Its most recent filing showed Northwest faced a $3.8 billion shortfall in its pension plans, and it had been pushing for new laws to give it more time to cover the gap. Steenland said Wednesday the company would try to preserve the pension benefits earned to date and seek to avoid shedding the plans as competitors have done.
Experts said one other factor may have pushed Northwest: a change in the bankruptcy law, due to take effect Oct. 17. Under the new law, Northwest management would have only 18 months to work out a reorganization plan without competing plans from creditors. United has gone for nearly three years without facing such a challenge in its bankruptcy proceedings under the existing law.
But experts also agreed that the soaring price of jet fuel was a major factor. Northwest said in its bankruptcy announcement that it now expects that its fuel bill for 2005 will be approximately $3.3 billion. This compares with $2.2 billion for 2004, and $1.6 billion for 2003.
"Those three factors, pension, labor and fuel prices, likely were the major considerations," Philip Baggaley, Standard & Poor's senior airline credit analyst, said in comments before the Northwest filing.
Northwest also faced growing competition from low-fare, lower-cost airlines, which has hurt major hub-and-spoke carriers such as American Airlines, the No. 1 airline, and the other airlines in bankruptcy...
http://money.cnn.com/2005/09/14/news/fortune500/northwest/
From Wikipedia, the free encyclopedia:
CB Richard Ellis has become the largest commercial real estate services company in the world with its recent acquisition of the international real estate firm Insignia/ESG, which represents clients in Hawaii's marketplace.
CBRE now employs more than 14,000 people throughout its more than 250 offices in 48 countries and has annual revenues of more than $1.7 billion.
'The new CB Richard Ellis is not merely about size of scale or critical mass,' said Joseph Haas, managing director of CBRE Hawaii Inc. 'Rather, it is about having additional resources and expertise available to better serve our clients here in Hawaii and around the world.'
Last year CBRE and Insignia produced and/or directed:
• Sales and lease transactions with a total value in excess of $80 billion;
• $9 billion in commercial financing;
• More than 700 million square feet of property and corporate facilities under management;
• $14 billion in investment assets under management; and
• Nearly 41,000 appraisal/valuation and advisory assignments on properties with a total asset value of $414 billion.
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Richard C. Blum is an investment banker and the husband of United States Senator from California Dianne Feinstein. He is a managing partner Blum Capital Partners, LP, an investment firm, and has a net worth of over $50 million.
In 2002, Blum was appointed by California Governor Gray Davis to a 12-year term as a Regent of the University of California.
Blum serves on the boards of the following companies:
CB Richard Ellis (Chairman)
Newbridge Capital, LLC (co-Chairman)
Korea First Bank
Playtex Products
Glenborough Realty Trust
Kinetic Concepts (jointly owned with Fremont Partners)
Critics have frequently accused Blum and Sen. Feinstein of political corruption and conflicts of interest arising from his business interests and his contributions to his wife's Senate campaigns.
In 1992, Feinstein was fined $190,000 for failing to disclose that Blum had guaranteed nearly $3 million in loans to fund her 1990 bid for California governor.
In 1997, a Los Angeles Times article revealed that while Feinstein was campaigning in the Senate for a lifting of trade sanctions against the People's Republic of China, Blum was managing millions of dollars of investments in Chinese businesses through his firm Newbridge Capital.
Shortly after the scandal erupted, Blum announced that he would donate all of his profits from his China investments to charity.
Blum has a strong interest in Tibet and Tibetan Buddhism. In 1981 he attempted to climb Mount Everest from the Tibetan side with Sir Edmund Hillary. He is the founder of the American Himalayan Foundation, which has given millions of dollars to build hospitals and schools in Tibet and Nepal.
For more on China deals, GO TO >>> Crouching Dragon ~ Hidden Rats
Not a Crook: Fred Malek
This former Nixon aide likes to make lists –
of political benefactors and, most notoriously, of Jews
By L. J. Davis, Mother Jones
Fred Malek received his 15 minutes of fame in the 1970s as deputy director of CREEP (Committee to Re-elect the President), the Nixon White House operation behind Watergate. Unlike many of his former associates, Malek walked out of Washington.
After lying low for a time, he made his political comeback as a leader in the Republican Party in the late 1980s, only to resign as deputy chairman of the Republican National Committee in 1988 when an ugly incident from his past came to light: At Nixon’s behest, he had drawn up a list of Jews in the Bureau of Labor Statistics, where Nixon thought a “Jewish cabal” was out to get him.
Nonetheless, Malek rebounded yet again in 1992 as campaign manager for the Bush/Quayle ticket.
Now a GOP fundraiser, Malek once wrote a most explicit description of political influence. In a briefing paper on the federal budget to Nixon in 1972, Malek asserted: “All major grants and construction decisions for the next fiscal year should be reviewed prior to the finalization of the budgets to ensure to the extent possible they impacted on politically beneficial areas.”
$ $ $
Frederic V. Malek
From American Friends of the Czech Republic
Fred Malek was raised in a middle class ethnic area near Chicago. He won an appointment to West Point and post graduation served as an airborne ranger army officer, attached to a Special Forces (green beret) group in Vietnam in the early 60s.
Following his Army tour, Mr. Malek has had success in four careers encompassing corporate management, government, politics, and finance. As a corporate executive, Fred served Marriott Corporation for 14 years rising to President of Marriott Hotels and Resorts where he was responsible for mor than $3 billion in sales, 70,000 workers, and a quadrupling of profits. He later served as President and Co-CEO and then Vice Chairman of Northwest Airlines where he led major improvements in performance.
Mr. Malek has played a key role in government over the past 30 years. He served as Deputy Under Secretary of the Department of Health, Education and Welfare under Elliot Richardson, as Special Assistant to the President, and as Deputy Director of the U.S. Office of Management and Budget. In his White House role, he was responsible for recruiting Cabinet level officials, pioneered professional executive search in government, and led a government wide effort to improve government management....
During the 1990s, Mr. Malek started his fourth career as financier, and founded Thayer Capital Partners where he is Chairman and Chief Executive Officer. During this period, he co-led the buyouts of Northwest Airlines, CB Richard Ellis (formerly Coldwell Banker), and the Ritz-Carlton Hotel Companies with Marriott as the majority partner and investor.
Mr. Malek received his Masters of Business Administration from Harvard Business School, and he and his wife of 39 years have two children.
He currently serves on the boards of several university and other non-profit institutions.
For more, GO TO > > > A Connecticut Yankee in King Kamehameha’s Court
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Fredric V. Malek
Chairman, Thayer Capital Partners; Former partner in the
Texas Rangers with President George W. Bush
From: The Washington Baseball Club
Fred Malek is Chairman of Thayer Capital Partners, a Washington D.C. based merchant bank. Mr. Malek formed Thayer Capital Partners in 1993 to acquire operating companies of divisions of larger companies....
Thayer Capital and Mr. Malek led the 1995 acquisition of the Ritz-Carlton Hotel Company, with Marriott International as a major equity partner. He was one of the three leaders in the acquisition of Northwest Airlines and is a director and major investor in Northwest Airlines, where he served as President and vice Chairman from late 1989 through 1991.
Earlier, Mr. Malek led with management the acquisition of CB Richard Ellis (formerly Coldwell Banker), the largest real estate services company in the United States, where he served as Co-Chairman until 1996.
Mr. Malek also is Chairman and CEO of Thayer Hotel Investors, a large equity partnership that purchases, owns, and operates hotels valued at $2 billion in the United States. He serves on the boards of several other large corporations including Automatic Data Processing, Inc., and FPL Group (Florida Power and Light)....
For more, GO TO > > > The Washington Baseball Club
$ $ $
October 25, 2003
Estate selects land managers
By Andrew Gomes, Honolulu Advertiser
The nonprofit trust recently informed the companies -- CB Richard Ellis Hawaii Inc., Colliers Monroe Friedlander, MMI Realty Services Inc. and Sofos Realty Corp. -- of its intent to assign them management contracts, which may still need approval from top officials at Kamehameha Schools.
According to some of the firms involved, the trust is assigning management and leasing for about 20 properties, including shopping centers, small office buildings, the estate's headquarters and industrial properties on O'ahu and the Big Island.
Management of the estate's prime retail centers, Royal Hawaiian Shopping Center in Waikiki and Windward Mall in Kane'ohe, is not included, but is expected to be outsourced later.
An estate spokesman yesterday said he could not confirm the deal because final contracts had not been negotiated, but the vendors are expected to take over management Dec. 1.
The $5 billion trust, set up in 1884 to help educate children of Hawaiian ancestry, announced the outsourcing plan in August as part of an effort to improve efficiency by reducing management costs, taking a more passive role in its investments and making more resources available to support educational programs.
More than 100 Kamehameha Schools employees are expected to be affected, though the estate said it would negotiate with contractors to hire estate employees. Those not retained will be eligible for separation packages including pay and training support.
Details of the contracts will not be available until signed.
Honolulu-based CB is being assigned five Kaka'ako buildings, including Gold's Gym, Alu Like and Keawe Business Center, plus a group of mostly Kalihi industrial properties....
For more on the CB Richard Ellis, Bishop Estate & Gensiro Kawamoto real estate connection, GO TO > > > How to Pluck a Billionaire
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MORE TO COME
Meanwhile, you can peruse more bankruptcy buzzard poop by flying to....
Bankruptcy Buzzards in The Boyd Group
Conseco: Birds in the Trailer Park
P-s-s-t, wanna buy a good audit?
And, for Sidney Skolnick’s excellent series entitled
The Bankruptcy Bordello, see...
www.skolnicksreport.com/bankbord-1.html
www.skolnicksreport.com/bankbord2.html
www.skolnicksreport.com/bankbord.html
www.skolnicksreport.com/bankbord4.html
www.skolnicksreport.com/bankbord5.html
www.skolnicksreport.com/bankbord6.html
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Last Update May 30, 2008, by The Catbird