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NORTHWEST AIRLINES MUST REPAY EMPLOYEES' INVESTMENT WITHIN 10 YEARS; TERMS OF PROPOSED AGREEMENT ARE UNVEILED AS TEAMSTER BALLOTING BEGINS

 WASHINGTON, May 27 /PRNewswire/ -- The International Brotherhood of Teamsters issued the following:
 Northwest Airlines will be required to pay back to its employees, dollar for dollar, the amount that would be cut from their wages and vacation benefits over the next three years, under the terms of a tentative agreement negotiated by the Teamsters and the Machinists unions with the company.
 This repayment provision, which is unprecedented in the airline industry and extremely rare in others, is part of an agreement negotiated by the two largest unions at Northwest and released today at a briefing at Teamster headquarters in Washington.
 The agreement gives employees a 30 percent equity stake in the company, designates 20 percent of the board seats as Union Directors, and obligates the company to repay employees' investment within 10 years in exchange for a bail-out of $900 million in the form of wage and vacation cuts for the next three years.
 "This agreement is the best chance for our members to protect their investment and their jobs at Northwest," said Teamster President Ron Carey in a news briefing at the union's Washington headquarters. "It treats our members' money like the investment that it is, with the kinds of safeguards any wise investor would demand. It makes the company accountable to employees, and, most important, it provides a mechanism and a timetable for employees to be repaid."
 The details of the agreement were made public today as balloting materials were mailed to Northwest's nearly 9,000 Teamster flight attendants. The flight attendants will be voting on a two-part package that includes both the financial proposal and significant improvements in working conditions.
 Among the improvements in the contract are new protections for flight attendants if routes are sold or in the event of a merger or change of ownership of the company. The proposed contract will also incorporate a computerized scheduling system and changes in the amount of time that flight attendants are required to be available for duty, both of which will improve the quality of life for flight attendants.
 "Flight attendants will have better working conditions and better job security with these new provisions in place," said Mary Don Erskine, president of Teamsters Local Union 2000.
 The joint negotiations by the Teamsters and the Machinists on the equity package were carried out over the past seven months, with the aim of keeping the company out of bankruptcy and creating guarantees for the members that their losses would be repaid and their jobs made more secure in the process.
 The agreement provides for:
 -- 30 percent of the company's stock in the form of a new class of
Employee Stock, passing to employees in three annual installments. In the event of bankruptcy or liquidation, the employee stockholders would be paid before some other holders of common stock, including Checchi and Wilson.
 -- Repayment of the employees' concessions in one of two ways: First, employees may opt to convert their stock and sell it on a public market, which the company is obligated to create for the stock. Second, any stock unsold at the end of 10 years must be repurchased by the company for at least the amount of the concessions made plus any dividends owed to employees.
 -- Three Union Directors on a 15-member board of directors, with enhanced voting and veto power over key corporate decisions -- such as mergers, acquisitions, and sale of routes or other assets -- that affect the long-term health of the company and security of employees' jobs.
 -- Increased job security, with layoffs permitted only under extreme circumstances such as closing of a hub or elimination of routes and then only if approved by 80 percent of the board.
 -- Equitable sharing of sacrifice among all employees through a progressive formula that takes a smaller percentage share from employees at the bottom of who are least able to absorb cuts.
 -- Returning wages to industry levels and vacation benefits to current levels at the end of the three-year concession period.
 -- Restructuring of Northwest's debt on strict deadlines and raising new permanent capital, with severe penalties if the company fails to meet those deadlines. For example, if the company does not restructure as agreed to by Jan. 4, 1994, wages and benefits will return to pre- concession levels, and employees will retain 10 percent of the company stock.
 -- Greater accountability by management to employees through a variety of mechanisms, including a Labor Advisory Committee that will have full authority to review and monitor the airline's financial records.
 -0- 5/27/93
 /CONTACT: Nancy Stella or Matt Witt of the International Brotherhood of Teamsters, 202-624-6911/


CO: International Brotherhood of Teamsters; Northwest Airlines ST: District of Columbia IN: AIR SU:

TW -- DC034 -- 3121 05/27/93 16:45 EDT
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Publication:PR Newswire
Date:May 27, 1993
Words:787
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