MINNEAPOLIS (AP) -- Northwest Airlines plans to cut the salaries and benefits of its 3,000 management employees by 5 to 15 percent to help the company return to profitability.
Northwest CEO Richard Anderson said in a memo to employees that he wants to reduce management compensation effective July 1.
Last week, the Eagan-based carrier announced a $396 million first-quarter loss and asked three of its largest unions -- flight attendants, mechanics and ground workers -- for substantial cuts in pay and benefits.
Northwest's proposed restructuring plan, which covers the period from July 1 to Dec. 31, 2009, would save about $950 million annually in total labor costs.
"It's our responsibility to find effective and fair solutions that will enable Northwest to achieve profitability once again," Anderson said. "It requires that we all share in the salary and benefit reductions needed to make sure Northwest avoids the plight of United and US Airways."
Those airlines filed for bankruptcy protection last year.
Northwest spokesman Bill Mellon said a memo was sent to management employees late Monday night, but he declined to reveal the total amount of management cuts.
Union leaders have blasted managers for accepting performance bonuses for 2002, and have said repeatedly that executives cannot expect union workers to accept pay cuts unless they do the same.
Assuming Anderson and Northwest President Doug Steenland take the maximum hit, they'd both lose $75,000 based on their 2002 annual salaries of $500,000.
In addition, Anderson got a $250,000 bonus last year, along with stock awards worth $1.9 million. Steenland received a $200,000 bonus and stock awards worth $1.4 million.
Anderson said in his memo that management wage and benefit cuts would be in addition to the reductions already implemented.
In this month's newsletter, Anderson said management ranks have been cut by 33 percent since early 2001. "Management has already participated in sacrifices and will continue to share in any future sacrifices," he said.
About 1,300 management jobs were cut by mid-March, with the company now cutting another 300 management jobs.
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