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Northwest Workers to Oppose Pension Action

May 05, 2003|From Associated Press

Mechanic Paul Volker says Northwest Airlines is building a house of cards with its plan to use the stock of its Pinnacle Airlines Corp. subsidiary to fund the pensions of the carrier's 73,000 employees and retirees.

Volker is one of several Northwest employees planning to testify about the plan today at a Labor Department hearing in Washington.

Northwest, looking to hoard cash in a time of industrywide difficulty, began using Pinnacle stock to fund pension funds in January, with a stock contribution the airline valued at $44 million, or about 13% of Pinnacle's common stock.

That money went into one pension fund covering mechanics, flight attendants, ground workers and three smaller unions and another covering salaried and management employees.

Although the request for permission to substitute the stock for cash is still pending, Northwest has said it expects the Labor Department to approve the idea and plans to contribute stock to cover the remainder of 2002 money due -- $223 million -- later this year.

Memphis, Tenn.-based Pinnacle flies routes connecting smaller cities in 26 states with Northwest's hubs in Minneapolis-St. Paul, Detroit and Memphis.

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