Machinists union opposes merger of Northwest, Delta

By Lisa Kerner

Charlotte, N.C., June 3 - The International Association of Machinists and Aerospace Workers (IAM) urged shareholders of Northwest Airlines Corp. and Delta Air Lines Inc. to speak out against a proposed merger between the two companies.

"In addition to my concern with the treatment of employees in the proposed merger, I also believe that this transaction destroys shareholder value by combining two vastly different entities with few expected synergies," IAM International president R. Thomas Buffenbarger said in a statement released by the union on Tuesday.

According to the union, it sent letters outlining its concerns to the largest 60% of each company's shareholders. The letters are available at http://www.goiam.org/mergers.

Buffenbarger cited a "crushing long-term debt burden of $15 billion" the combined airlines would face, as well as a lack of liquidity with a working capital deficiency of $1.03 billion.

Pension deficits would amount to an unfunded pension liability of over $7 billion, Buffenbarger added.

"The checkered history of airline mergers since deregulation has shown us that they inevitably result in disgruntled customers, turmoil within the workforce, and diminished returns," Buffenbarger said.

IAM is the largest airline and rail union in North America representing transportation industry workers, including 12,500 Northwest Airlines employees.

In April, Atlanta-based Delta and Northwest, located in Eagan, Minn., announced plans to merge in an all-stock transaction with a combined enterprise value of $17.7 billion.

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