Good afternoon. It's 12:04 with news from Minnesota Public Radio on credit Cunningham a report by the Legislative auditor finds. Minnesota does not have a significant shortage of beds in residential facilities for juvenile offenders who don't live at home project manager at Joe Walter says there's more pressing need for non residential services. Including helping kids return to Society at large. Once they finish their time in the facilities. Ultra says there is room for improvement in the way kids are screened and assess a job placement. One of the real shortcomings that we found is a for all these kids we place we really don't have a very good sense of what we're achieving because we don't systematically track the outcomes and the courts often aren't very explicit about what goals they have in mind for the kids and Report recommends requiring course to set placement goals and state agencies to monitor results alter says Minnesota public agency spent 225 million dollars in 1997 for juvenile offenders wood.Live at home. He says the cost of growing and very widely among the counties state representative. Joe opatz is proposing Minnesota schools meet specific goals for attendance and test scores at the FLL from St. Cloud is introducing legislation to Define performance expectations for all public schools The Proposal calls for a 90% attendance rate for all student and the passage rates of 75 to 80% on state test for 3rd 5th and 8th graders opatz, let an unsuccessful effort last year to include State take over as a possible consequence for failing schools around the region at this hour light snow is falling over most of the area. St. Cloud reports lights. No two below zero a wind chill index of -14 and in the Twin Cities lights. No one above a wind chill index of - 20 that's a news update on Greta Cunningham Auto 6 minutes now past 12 programming and MPR is supported by carousel automobiles The Oddities store offering the Audi A6. Avant European sport wagons.available in front track and Quattro models Left noon, welcome back to mid-day on Minnesota Public Radio. I'm Gary eichten glad you could join us Northwest Airlines. Just one of those regions oldest largest and most important businesses. It is in many respects Minnesota's window on the world. There's no doubt. The region has benefited greatly by having a major airline based in the Twin Cities, but last year's strike at Northwest also underscored the downside of this Region's heavy dependence on Northwest Airlines during this hour. We're going to take a look at some of the problems Northwest has been dealing with and some of the airlines plans for the future during this first half-hour the program will hear from Northwest CEO and then during the second half of the program will be talking with Northwest spokesman John Austin and opening the phone lines for your questions and comments all of that coming up this hour of midday 1st at Northwest CEO John dezenberg next week Northwest airline. And will be releasing its final year-end Financial numbers for 1998 and 1997 was a good year for Northwest but last year was not Northwest is expected to post the net loss of tens of millions of dollars for 1998 mainly because of Labor trouble over the past 9 months Minnesota Public Radio is March sat act like spoke with Northwest CEO John dasburg about problems at the airline and prospects for the future. Well, I guess I wanted to start by talking about last year. If you talk about Northwest Airlines in 1998, you talk about Labor problems. Did you end dissipate 1998 would turn out the way it did give him that the contracts for open. I know I did not I I thought given the relationships that that we had developed throughout the early and mid nineties that things would go much smoother than I was really quite surprised one that the contract was turned down by the I am and I was certainly really surprised that the pilots struck. What's your response to people who look at the situation from the outside who are not aware of what it takes to run an airline and what it takes to run a union but they say how possibly could Northwest let things happen this way and how possibly could people like John dasburg allow the situation to just fall apart the way it did in business you do the best you can do so much of what we do is is judgment and so much of of the the decisions made by the union Leader's judgment that from time to time you don't have a meeting of the minds and that we saw that remember two years ago where American Airlines flight attendants strzok and within 12 months of that their pilots truck and it took a a presidential emergency board to haul that strike it and then only lasted a few minutes, but they were on strike and it happens sometimes in this business. It's a difficult industry. It's a difficult industry. I believe for employees to understand not understand their day-to-day work but understand the economics of this business, the fact of the matter is that we work on this some of the thinnest margins of any industry category in the world and in most of the cost or highly leveraged, but I mean by that is if there's a war in the Middle East of the difference between a billion dollar profit in a billion dollar loss can occur and then for 5 months and so the nature of this business is such that it's very easy for our people to misunderstand how close we operate on the margin and sometimes it's difficult for unions understand that there was just simply a misunderstanding of what we could afford we couldn't afford to pay what we were being asked to pay by the pilots and they struck over it. I spent a lot of time over the past couple of years talking with Northwest Airlines employees from all different parts of the company and the main gripe they seem to have with management seems to be rather basic and it's that they feel like they save the airline they feel like they should be rewarded and they see Executives at the airline including you being handsomely rewarded for having turned around the airline. So successfully earlier in the 1990s and they want their fair share. Are they right? Well, they're right in the wrong there right as to the fact that there's a pie and it has to be shared fairly and we certainly Advocate that doing so we don't declare any Dividends are earnings are plowed back into the business. They either going to new are aircrafter infrastructure or into salaries and wages are other cost. And and so there's no leakage. In other words. Everything is turned back into the business. We and management are charged with balancing how much goes into aircraft and infrastructure and how much goes into labor rates. Benefits of an in so in that regard we try to do our best to have a fair allocation as to compensation of management management compensation has for the most part tracked the rank-and-file compensation. The big difference is in stock options. We receive stock and if the Dow Jones goes from 4500 to 9500 we're going to earn a lot more than our salary or bonus or and the other program we would have been since the Dow increased so dramatically during the 1990s. All of our stock is increased significantly and if we exercised those options and sell that stock we received very very large Financial rewards, but those financial rewards are not coming out of Northwest Airlines directly there a Vestige if you will of the 1989 19 Andy. When the company was Private in the Senior Management Group were given stock out of Al Shakey's Gary Wilson's another stock Holdings to the average employer. How do you get that across to the average employee that there are there are these are two different groups at the airline and that well, you did indeed help save the airline when you agreed to pay cuts and and other productivity improvements in the sort of thing. I guess it did to me. It sounds like you're saying what you have for that is a job at the airline know we're not saying that at all what we're saying is that everyone sacrifice incidentally I took I took my share of sacrifice also as did every other employee for my own salary everyone sacrifice. And now the airline is doing well and now we are going to share the profits of their life, but we have to share him in such a way that we continue to have an airline and it may very well be that employs want more than the airline can afford to give them in at the same time replay. Jetways an aircraft and in so that's the the classic debate. But since we don't declare dividends, it is not in our interest to to have a strike or to have Poor Labor Relations. We will do everything we can to generate good labor relationships in to avoid a stripe but we're not going to do is encourage wage rates in in in benefit programs that lead us to a position where we can't replace our Capital stock which incidentally is not in the employees best interest because I'm 5 7 years there won't be an airline. If we don't replace our Capital stock is if your question goes further and is it was how do you explain to the employees how it is that when the stock market goes up management earns more because the value of their stock options go up with the market that's very difficult and I have concluded as a practical matter that that I certainly I found the way to adequately explained it. I don't think the media has found a way to adequately explain it. And if anything the the choice of the words the media use have a tendency, especially the print media. I think Tim is characterized stock options and to mischaracterize that part of our compensation but nevertheless I have four for the moment at least abandoned trying to explain the stock market and stock options. Looking ahead NADA 1999. You go into 1999 having not realize your gold wrapping up all the lake labor agreements in 1998. You have your two largest unions The Machinist a flight attendant still without new contracts for threatening to shut down the airline if they don't get what they feel they deserve. What do you think the prospects are this year for more work slowdowns and maybe even strikes? Oh, we're back and negotiations with the I am leadership and I would be I am hopeful that we can take a country. Back back out to those people represented by the i m and hopefully we can get ratification this time as as to the IBT which the teamsters represent our flight attendants. We are not at the we have been in negotiations, but we are aware they're recessed. If you will for the month of January due to not having members of national mediation board available and will begin to go see it again in February. I would hope we can reach an agreement. But once again, we are subject to constraints there's there is only so much Capital to go around the airlines are any capacity is only so great since we don't declare dividends were pleased to have a fair allocation, but we certainly not going to make a short-term decision that will imperil the airline long-term. We just simply cannot do that and it isn't in the employees best interests that we do that of course, are you optimistic that you will be able to resolve these contracts without working? Well CEOs are optimistic by personality type. So I always start by believing that we can get things resolved. Certainly Miss calibrated in the case of the of the pilot situation 1998, but I would certainly hope that as we going to 1999 that the people here at Northwest Airlines recognize that what we're trying to do is best for the airline which in turn is best for them and that they they have to to some extent rely on our judgment and certainly since they're represented by unions rely on their Union leadership and Hope weather Union leadership and management can reach an agreement. But I cannot imperil the future of the airline. Have you dealt with the having all these contract disputes all around you? You're the guy in the picture of a in the airline magazine and there's been a lot of finger-pointing and in basically the same vilifying of you personally and in this in this all how do you deal with that for the most part? Simply have to ignore it. I know that what I'm doing is is in the best interest of this Airline and I believe that if I didn't believe that then then I would have a problem because I'd have to deal with a conscience in a reality that would perhaps be in conflict with each other. But then I guess we would call cognitive dissonance but I don't have any cognitive. Where is that? I believe that that not only me but the senior management team have the airline and its customers and its employees all all all balancing all of those interest and that we are taking their line on the right course. I think we took the airline on the right course throughout the 1990s including the 92 93. And we have basically the same management team in place today and I believe we're still going down the right Road and pulling together these alliances and taking Global focus at Northwest Airlines will be one. The airlines that survives long-term it's as the centerpiece of a global network is all what what what we need to do. And I and I believe that we certainly need great customer service and we need our people to the desire to provide that service in and at the same time we have to balance their financial interest in their desire for benefit packages against what it takes to run the airline and now we're going to do our best. Have you ever been in a position where you been the frontman subject to so much criticism as you have been, you know as a CEO of Northwest having spoken with some of my colleagues in this industry. The airline industry is almost unique in the hostility that seems to exist between the Labour leadership and the management. There is a constant wedge being driven that it's unfortunate, but it it's in this industry for the most part that it's simply the way it is sin. We look back over the last 25 30 years since deregulation. We can see that pre deregulation of the industry. Behave that way post deregulation it behave that way. It happens to be wrong. It is not good for the industry it because it is not good for our customers and somewhere along the line. We as as as as a company in and we as an industry or going to have to learn that the customer shouldn't pay the price for a labor negotiation. Then in point of fact that negotiation has to take place between management the union representing employers and employees and in and we just simply can't put the customer in a position where the customers basically being used in the negotiation. But but the industry hasn't learned that we certainly haven't learned it here. I am I am preaching it a but so far to no effect. It occurs to me that Northwest has had a long reputation of a portrait labor relations in that up until very recently John dasburg and Labor Relations were good after you negotiated concessions with these groups of workers. You were sort of a hero with the workers you were in there rolling up your sleeves presumably telling them that hears what everybody needed to do to turn the air line around the airline did turn around the economy turn around the airline started making a lot of money and now you are sort of the villain even though you're the contract being offered are not concessionary contracts right now. And is that disappointing to you? And yes, it's very disappointing in 1992-93. We did not really negotiate a new contract. We we negotiated concessions in an environment in which everyone was fearful and in so my role was viewed as protecting Northwest Airlines from basically X. Internal forces that is the Mideast war and its impact on our Revenue because of the fear of terrorism the height increases in the in the cost of fuel the American Airlines pricing initiative, which had a devastating impact on Northwest Airlines in so I was viewed as as as basically the leader protecting a Northwest Airlines from external forces. I had not prior to this negotiating round of Labor negotiations negotiator new labor contracts and in so I was a consequence in this environment and now I was cast as a typical in quotes leader of the of an airline that is the enemy because we want more and they don't want to give it to listen so they must be bad guys clearly that it's the same John dasburg. The day is it was in 1992 and 93 and that it had been for 450 years prior to that or 45. Years prior to that and so the fact of the matter is that I'm I'm just the cast in a different light now because I'm playing a different role now and that is to negotiate contracts prospective as opposed to concessions in order to save the airline very hopeful that when this is over in the contracts are in place and we have four and five years of Labor peace that over that period of time we can focus on customer service and focus on the relationship between everyone in the airline management employees the labor unions and find a new way of of of of an airline negotiating wages and benefits. If we can't then we'll be going to the cycle again and in in five or six years and I think that's a shame and I think long-term it will damage the industry. It will damage the Union's it will damage management will damage the employees and in in the end result of that and markets. Why it is that an awful lot of people are going to be going to hurt this industry for a very long. Of time. So my role for the next 5 or 6 years in addition to the strategy of Northwest Airlines would be the do as much as I can to see if we can't find a different way of having relationships inside an airline Northwest CEO. John dasburg speaking with Minnesota public radio's Mark sudack, like that's where it says one thing he'll be looking at as he considers ways to improve labor relations in the airline industry is the role of the Railway Labor Act. That's where it says. The law may actually dragged out contract disputes and he says he may Allah be for changes in that long. As for Northwest. Asberg says he wants to rebuild customer service to the award-winning levels near line offered before all the labor problems. How do you go about rebuilding morale and customer confidence? You have the two big Union still about the contracts right now, but there's a few That that you are trying to put the pieces back together after 1998 move on and certainly a big part of that will be restoring customer confidence. I would assume yes from from the summer of 1996 until the end of the the pilot strike are there was a deterioration in our customer service again historically in this industry. This is been the case. It's unfortunate that the that the customer is basically had taken hostage. Once the labor contracts are reached and then the service levels to go back and we have to we can see that at Northwest Airlines. We went from a deterioration of service from the summer of 96 until the end of the pilot strike. And then in the month of October November and December how we have had very very high levels of completion factor in on-time performance. And so the underlying operational structure of the airline has stayed in place. In fact Eve. Even during those two years. We actually we're improving on on procedures. And so as soon as the strike was over the airline that really really exponentially bounce back to a high level of customer service. So that's possible and and the recognized in the customer service that is reliability in the airline industry is a key to staying in business. We certainly intend to focus on that and and I think if that it's interesting if the airline operates well that is a operator reliably everyone's job is easier if if the airline is unreliable, some of the early sense of that is if it is is experienced by the reservation agents and the reservation agents become frayed because they're dealing with customers that are upset because there's cancellations or or lack Our Miss connects as a result of on time for 4. Clearly luggage doesn't connect. Well then and it kind of has a Rippling effect in the entire institution. I've I talk to about employees all the time at tell me that that one of the most important things for their morale as once once we get back to operating a reliable are lying again that their jobs become considerably easier and why I can certainly understand that just based on the complaint letters. I read so it was so I'd like to think that I was we wrap up the labor contracts in the airline goes back to running at at very high levels of completion Factor on Time Performance in with luggage that then in a cell phone certainly helped morale and maybe a crash in the stock market. So none of us make any money would be helpful. Also, she lost a hundred million dollars in the second quarter because of the work slowdown and I think 600 million dollars. Because of the strike and events leading up to it and then cleaning up after it. Your fourth quarter numbers are due out pretty soon. It's certain to be a net loss that are you offering any predictions on that door any thoughts from a financial standpoint on 1998 odds against the law for us to speculate on our financial results. So I won't do that. How about the first three quarters of 1998? Oh, well, the first quarter is very strong and and we were pleased with that. The man was still strong and and well Asia was deteriorating rapidly. It hadn't had deteriorated to the point where it was nearly as bad as it has become now. We're in the end of we completed 1998 when I'm beginning in 99 would realize exactly how bad is your became in the second third and fourth quarter. We were we were surprised as where others with the rapid deterioration of Pan in particular, which is our when we say is you we really mean Japan 70% Asia 30% and we were really quite surprised at how fast Japan deteriorated in Sinton. So we have to look ahead now and Japan isn't going to be in Japan is not going to have a sustained negative growth rate and so my at some point in time it'll bounce back but between now and then Northwest Airlines will suffer disproportionately because we are disproportionately represented the our business is disproportionately concentrated in Japan. When we speak of Asia, you are probably not the most very close to the top of having the most exposure in in Asia and Japan couple years ago. I think you folks were even talking about how you were starting to see effects of that. You know before it was even maybe coin the Asian flu on your your operations there. How do you look at it right now? It seems to me Probably a little bit ahead of most other players in the industry because it is such an important part of your business. What it what is it looking like there now, is it bottomed out yet? We don't do We don't do a lot of economic forecasting ourselves week average. Everyone else is economic forecasts. I think many businesses do that and in based on averaging everyone's economic forecast. It looks like that Japan has in fact not bottom that out. But but it's conceivable that the average forecast is wrong. We have aircraft that that are available to put in the marketplace should business strengths and again wouldn't have what we call the beach markets in particular between Japan and and Hawaii or Guam that that we would like to see those markets bounce back and we hope they do but we're not operating on the air light when not operating Northwest Airlines in the basis that they're going to bounce back in the next year. And if they do that, I'll be a pleasant surprise to talk to us about the US economy some of your competitors of canceled hundreds of millions of dollars worth of a aircraft orders in the next several years presumably. I don't think the economy in the United States that will perform real wild. You feel pretty confident about the economy here again, we we simply average the economic forecast in the forecast indicate that the economy in the United States is going to real growth next year in the to 3% neighborhood. That's that's that's good growth for an airline Airlines have a tendency to grow right along with the economy. So we would expect maybe at 3% growth in the North American that next year so that we are we feel good about then the Continental Northwest Alliance you expect that ultimately it will be allowed to go through despite the objections from Department of Justice. First of all, as to the second half of the question, we believe that that the transaction with Continental is with inside the inside the law and that it should ultimately go through the justice department is litigating and that'll have to be Heard and then we'll let others decide whether we're right or wrong. But our advisers tell us that they believe that we are totally inside the law in the transaction with Continental. The reason it's important is there are three airlines that are almost double the size of either Northwest or Continental in a business in which your customers demand that you have broad scope and the business in which there are economies of scale in your cost structure. And so therefore we were trying and Continental was trying to come up with a method or a transaction or structure if you will that would allow us that is Northwest and Continental independently was looking at this this this challenge their life Cloud continental and allow Northwest to to function for our customers as if we were as large as these three very large Airlines and what we came up with us and I Do I have any very comprehensive Alliance wear for the most part to our customers our Northwest customers and they're Continentals customers. We were one Airline this would require of the basically almost merger of our frequent traveler programs a common use of facilities excetera excetera and in we agreed in a negotiation with Continental Continental with us to do so, it's so happens in this particular transaction that there was a very large block of Continental stock owned by a small group of investors. And we at Northwest believe that it would be a mistake to do in her grade are Airlines Continental Northwest has comprehensively as we had envisaged and at the same time allow that blocked oh to be out in the capital markets with with who knows who might be interested in it and so therefore We bought off the block or are intending to buy up the block. We we had no interest in merging the two Airlines. We felt that the history of merging Airlines was it was it was a relatively ugly history and there we felt that a voluntary Alliance V2 between two Airlines was the more appropriate way to accomplish our objective. So other than acquiring is block of stock tub to prevent it from being available to competing Airlines, for example, after we had fully integrated with Continental we decided to take it up we've put in a voting trust which provides we believe our protection to all parties and we're hopeful that someday has decided that that decision was correct. In the meantime. We are going to go about our business with Continental of doing everything we can to integrate our two businesses. That's one of the things your most occupied with in this office right now, is it not trying to find similar alliances with that with other airlines that building on what? The folks that start with k l m 10 years ago. Well, I think I would just slightly change your comment if you will as well as if it's a question in the end of the summer. My my first priority is to 2 to bring together in to implement the KLM relationship the Continental relationship in shortly the Alitalia relationship if Northwest Airlines is going to survive well into the next Century. We are going to have to be part of a major Global Network. I might say good klm's reach the same conclusion continent was reached the same conclusion Alitalia the same conclusion. And so therefore what we have to do is bring all of these are lines together now and actually Implement these This Global Network in these bilateral alliances. A lot of work. It's very complicated there. A lot of interest each party has its own interest at the table after all we are all independent Airlines and in once we pull ourselves together and implement the program that we have to bring into the group other airline's of the complementary that help continue to allow us to it to reach into markets and provide a scope to customers and clients all over the world. And so that is my my principal concern but it's both implementing what we have as well as searching for in an in bringing other airlines into the network. There was speculation that you maybe had enough of the airlines business and it might be moving on but it was announced not long ago that you would indeed be staying at Northwest Airlines for some time earlier in the conversation. You said something about 5 or 6 years. What is your future here? Do you suppose the five or six years you were referring to is my view of how long we have to accomplish certain objectives before the contracts become due again it is that. Of time in which you're going to have to deal with the railway Labor Act amendments or changes or or what-have-you in order to not go through another cycle of Labor negotiations as we've been going through now, which is as you and I both discussed that is very destructive as to me personally. I have always had an interest in business. I have never had an interest in any one particular business. And so I know that I viewed myself as being a hotel person. Does Motel business and part of the atom that I see PA and Consulting if you will with peat marwick and now I'm an airline executive but I'm getting a little bit long in the years. Now. I'm going to be 56 this month. And now than in my my current view is that I'd like to see us that turn Northwest Airlines into absolutely one of the great airlines in the world in the heart of one of the great Airline networks in the world in the next century when business is going to evolve into a really being totally Global as I see it and I'd also like to play a role in next four or five years of hopefully finding a solution to the to the the acrimonious type difficult type of Labor Relations that Airlines have had historically Northwest is that historically and as I've just experienced and having having that experience to the 92 and 93 and having experienced it in 98 that is clear to me that that we must find a better way to Billtrust a better way to run an airline a better way to go forward then and then share the pie but at the same time do so not at the customer's expense or creating all kinds of anxiety among the people in Northwest. Thank you very much for your time. I appreciate it. Thank you Mark Northwest CEO John dasburg speaking with Minnesota public radio's marks of a click or more about Northwest Airlines. What's been up at Northwest and what we can look for in the future is John Austin his longtime managing director of corporate Communications at Northwest Airlines and we sure invite you to join our conversation as well. If you got a question about Northwest give us a call or area code is 651. 651 and then the basic Twin City number 227-6002 calling from outside the Twin Cities use our toll-free line. That number is 1 800 +242-282-865-1227 6000 or 1 800-242-2828 John awesome. Thanks coming in today. Thanks Carrie. It's nice to have the worst of the wounds from the strike get a pretty much healed now or are you still putting Salve on those? I think there's still some work to be done in that. I don't think you have an event that is his emotional and as disruptive to a whole host of audiences. Her passengers are employees are stakeholders and just have everybody as much as they like to say. Okay, that's over and done. Now, we've got to get back to business settled. I'll take a little bit of time store yet. And especially since we do have still a couple of Labor contracts that are yet to be negotiated to conclusion that doesn't give all of the groups of the closure. Set the pilots group have in and the other three contracts have been signed as well. So there's still some work to do on on all sides of the the equation that you don't have a crystal ball. I don't think but what is your best guess are these outstanding labor contracts going to get resolved without a strike or can we expect some kind of a shutdown this year? Right? I don't have a crystal ball. I wish sometimes I did but I think my best guess is that there is nobody at Northwest Airlines and that's management. That's our Union leadership. That's a rank-and-file who want to have a strike and I think if if there was anybody who thought that way the events of last summer, I think maybe help fix them on that. It was really wasn't a very difficult event. So I think that as long as we have that as a basis for going forward that everybody doesn't want to strike that everybody is going to work to avoid a strike and conclude contracts. We have a good day. 644 Boyden John dasburg was talking in the interview about how unusual the labor situation is the in the airline industry just seems to be a whole lot more contentious than in most other businesses. Why is that it is that in that there's no I'm sure are smart people in Academia Peter rachleff. Maybe can give you a good inside on to something like that. But I think it's it's a combination of one of which has is a holdover from deregulation in the in the regulated environment that Airlines grew up in that that unions grew up and in this industry is well, the pie was ever expand if you needed more money because your labor negotiations were going to add 3% to your cost structure. You went to the Civil Aeronautics board said our costs are going up by 3% would like to put in a fare increase to cover that and the c a b would chew through that and that for Wildwood in more cases and not give you that. That I think has produced a mindset with Folks at their is the legacy of that the pie grows infinitely and it doesn't do that anymore. We compete with Airlines from all across the world for business when we offend a customer when we lose a customer when we fail to come to a customer's attention in the marketplace. We paid the penalty for that we is is Northwest The Entity the employees who work there and who depend on it. So I did I think you know part of its that is why I can see from when we all grew up when I get to some callers hear right away. But before we do that I can to can't help it ask you what in the world happened in Detroit with the biggest snowstorm people sitting on planes for what's 7/8 hours kind of Trapped in there. What was what happened? Well, what happened was a decade level snow storm hit Detroit and before it got the Detroit to shut down Indianapolis in Milwaukee in Chicago and a bunch of other cities along the Midwest Corridor that attract me on and what happened in Detroit was fundamentally what happened in those cities. The airports shut down the community was severely impacted schools in Detroit. For example, I think as of this weekend, we're still closed schools in Detroit where only I guess about half open and so as a result of that the operations of the airport were severely impacted and people were stuck in the terminals. We had a couple thousand oaks. He slept in the airport Saturday night and again on Sunday night. We had people who were stuck on airplanes for an unacceptably long time. And if there's anybody listening here who was on that they deserve our most sincere apologies because that's a terrible situation find themselves in we're going to go back and look at that. See if there's anything we could have done differently to make it better for him. But in general what happened in Detroit as what happened in Chicago and elsewhere around system Whenever there is a snowstorm that disruption Air Travel network. Does it give you pause make you think that perhaps you've put too many eggs in in the northern latitude baskets are the Twin Cities and Detroit both of which of course are subject to these kind of major weather disruptions. Well, you know where your hubs are as much as the fact of historical accident is anything and then they are the hands. We were Delton some likely that the you even if we could we would pick up and move our hubs, but I I guess I would turn it around throughout the 1990s Northwest Airlines, which is operated to Northern cops in most Airlines don't do that has turned in Superior on-time performance even in the face of that the last year-and-a-half being an exception we've had problems, but the same people who you know, how are working at the airline today throughout most of the 90s made it to number one on time airline in the in the country and because of that I think we were pretty How to do an even though there's always a way to do it better and I think we'll learn that from Detroit. John Austin is Weathers from Northwest Airlines. He's the director of corporate Communications here to take some questions. If you have one about to Northwest operations, and the rest goes to call 651-227-6002 in City area number. 651-227-6002 Twin Cities one 800-242-2828 been glad blush. Thanks for taking my call. I was wondering what Northwest plans are to change out their narrow-body Fleet. You see a lot of the other airlines changing out there for its I was wondering what the Northwest plans are. Okay, maybe not up on airline lingo quite so much are the basically the domestic for you and for us those are dc9 720-783-2757. So you're going anywhere from a just under a hundred seat aircraft to about a 200 seat aircraft. The book of those are dc9. These are very fuel-efficient. Very well-made. Very cost-efficient. I'm sorry not fuel efficient cost efficient aircraft and they are the Workhorse of our Fleet and we've gone through an extensive modification program with him new Interiors. Hush kids on the engines. They are good to go at the same time. They are a very paid for we own the majority of those aircraft and if we were to decide because one of the manufacturer's was to offer us a good deal or for whatever other reason that we wanted to change say the dc-9 fleet out we could do that right now. They're really two aircraft manufacturers in the world. There's Airbus in Europe, then there's Boeing in Seattle. I both The Witcher trying to land order so that they can start production on their new 100 seat aircraft Boeing is called the 717 are buses the a 318. Obviously there in talking to us all the time. We're open to a deal if there is one but what's going to have to be a really good one because it's a very good safe economical aircraft R Us to operate and we can do so you're going forward for the next several years the rest of the fleet 7/27 tour going to be retired out for the most part in the next couple of years a320s and the 757 or among the newest aircraft. We fly out. We're bringing more of those into the fleet. The a320s are coming into the fleet. We've got more 757 coming into flavor. Also bringing in a new model for us the a319 which is kind of midway between 100 and 150 seat aircraft. So the narrow body fully is actually going through quite a bit of Rejuvenation and restructuring right now Joel your question, please This is Murphy guards to policy on objects that were lost in transit shortly after Thanksgiving. I was coming back from Cleveland to Security man. They are unusually carefully dumped my entire camera bag out check every camera every film every object in it. Put them all back in my time. I was late. So I rushed to the gate and one night. He was flying discover. The one camera was missing. Tuesday Detroit airport reported it. I got to Houghton reported it again found out a week later than either want it done anything about it. I've been trying to track it down and talk to people at the Cleveland Airport twice now, I'll talk to the man security but no response from anybody look twice to Northwest. I haven't had no response from them, whatever what can be done about something like that. Well, if you want to maybe we can get your phone number offline, I'd be happy to look. Find out your specific situation, but it's a it's a good reminder. If we could when you go through those security checkpoints, there's a lot going on at those points is a lot of people going fast you summon airlines are starting to put in carry-on restrictions that are enforced at the check on point, you know, and I know everybody waits till the last minute to go to the plane to but that is one of the places where it's most likely the people are going to leave possessions and those checkpoints in something reports. I like Cleveland the security folks that operate those do not work for Northwest Airlines so that can complicated sometimes but if you want to if you want to give your number maybe 2 producer off the air or something, I'd be happy to look into that situation. What's going on with luggage these days the odds that your Suitcase is going to arrive at the same place you are going in there at the same time with a bunch of different things are going on in the industry. The odds are about 1 in 10,000 that you'll have some problem with your your luggage. That's not too bad. But you know, what if you're if you're that one that's that's a big problem, you know in the event of a severe disruption, obviously that's going to go up like with the snow storm. We had recently we've had folks gum separated from their luggage and are just now getting it back to unfortunately, but in in General on on a given day, it's very small the big controversy in luggage these days about carry-on luggage. How much should you be allowed to carry on and the industry is in a bit of a turmoil at self. There's some airlines that are enforcing a very strict carry on policy. Some are enforcing more liberal summer calling on the federal government to intervene instead of stay. We have at Northwest Condor what's called a OnePlus bag policy for carry-on, which is one carry-on bag plus a host of others laptops briefcases things like that for more than a year. And now it's working really very well for us, your question, please. Love by Northwest employees and listening to their different discussions about the airline industry. It seems to me that has a management policy that they treat their employees like interchangeable parts that just like if a part on an airplane where is out? They pluck it off they discarded and they put a new one in it seems that they don't treat their employees as a real valued part of their system that is in part of their public relations and how they get along with their customer is that it seems to me they could just treat their employees a little better which in turn would that make a customer feel happy because we see the employees we don't see the management. We see the employees and when the employees are disgruntled over their contract oxy, whatever they have 2 comes out in their relationships with their customers their criticism. I'd like to think that it's a pair of criticism, but I can certainly appreciate the point of view. We don't treat her employees like interchangeable parts. We treat them like individual. Valued individuals we have at Northwest 51,000. I think of some of the best people in this industry or an Indian history. And even though we do on occasion have contract disputes between the company and its man and the union that's that's where they dispute lies. It's not with the individuals and I think most of our people be the rank-and-file union members bday union leaders or beaded management recognized that and then we try to keep her I focused on the customer again, I think sometimes you know, there's a few folks who don't know that but hopefully we're all learning up piece by piece in a week. We try and treat our folks the way we want them then turn to treat customers which is with respect with fairness with dignity and like any employer. We want the our employees to to feel like they're working at a good company and we work hard for that question. Irwindale Brooks talking about stock options and he kind of made it sound like that. Captions that they got just kind of the money comes from nowhere and it doesn't come out of Northwest Airlines and they make money on the stock options. Even before the stock market goes up because when they get their stock options like the way they get him in about $4.50. Well if the stock is trading at $24.50 right there. They got a $20 profit. They have 500,000 shares of options. That's a 10 million-dollar gift to them automatically and when they turned it in, I believe that is Northwest Airlines to pick up except that cost another question, but I got a question if you want to come in on that, too. All right. John. Well, I think it's as mr. Dad's work said in the interview explaining the nature of stock options. Is it in Norma slick complexion the even the people who are or close to the situation to reference his comment most of the the games that you see in the paper sometimes for compensation do come from stock options and just as you know people who have stock options 10 to exercising when the stock price is high, so to do all the employees and then we saw that at Northwest we're all of the employees who took sessions in 1993 through 96 got stock in exchange for those concessions and while stock options were being exercised people were also exercising stock sales as well. We saw a tremendous number of employees selling stock at that same time for the same reason. He represented choice for their individual investment strategies and things Esther the accounting principles behind stock options. I wish I were a lawyer so I could get into it but it is a it is a paper transaction is not a taking from Peter to pay Paul thing. I do know that and the difference to between the management of the employees management got stock up to the $4.50 while employees get stock options at $33 when I was fifteen. I'm off so I can sleep in here $20 lot so that the pilots would not have to get another hundred million dollars in wages. Well, if I could just go back to the option thing, I'm not all stock options are granted at this $4 price. There were some back in 1992. I believe we are granted to the management team at that time stock options are granted generally at the prevailing market price. So it's just searching that they're granted that this artificially low price is not correct. And then as to the other point that the caller made on that the employees did get stock in lieu of giving up some of their wage confessions as well how those weren't stock options and actually the amount that stock has been worth actually a varies depending on the employee Forum. I think so in the mid-twenties to the low 30, so not everybody is got the same thing there. I'm in the nest of the final question again, I think is John dad's work said in his interview. We can't make a short-term decision. Imperils long-term future the airline and that's really the position we found ourselves to be in with the pilot negotiations to accede to the the contract proposals of the pilots Union would have raised our cost we felt so as to put us in that position and that was just not something we thought we could deal with that we could take and that's what that's a terrible decision to be in because her again nobody wants to take a strike. That is the absolute last thing. We would like to see it Northwest Airlines both with our pilot group and going forward with any other group. We are unfortunately almost out of time here. We'll have to have you back when we have more time to deal with more issues. But I do want to run a couple of things past you one thing that came up repeatedly during the strike last summer was the need for more competition at Twin Cities International. Do you folks sense that there's going to your interface more competition at Twin Cities International? Turn on I'm sure we will and let's just review the bidding at Twin Cities every major airline in the United States with the exception. I believe of Southwest Airlines serves the Twin Cities already a number of startups are your servant already the airport will tell anybody that no airline has ever been refused the opportunity to serve the community for lack of available gate space or other infrastructure. So we're going to get competition whether whether we like it or not and it's a very competitive industry and and will the will work hard to try and hang on to our customers because we do know they do have a choice then there is the Y2K bug. Can we see expect Plains to be falling out of the sky about this time next year maybe a month earlier know our position on Y2K is really the same position we have on any operational issue. We're not going to fly where we don't think it's safe. And so we have ever Anticipation that the year 2000 will be met and overcome by Northwest Airlines and buy the airline and the air traffic control system here and we're we're not sure that we just won't fly butt and it will make that decision operational a lot closer to that date. But right now we expect to be flying so it's okay to buy a ticket if we go out there soon to go on sale for the I think if not this week. I think you can buy tickets. I saw John appreciate you coming in today. Thank you. John Austin who is managing director of corporate Communications at Northwest Airlines joining us for this is a second over a mid-day program like to thank all of you who been with us this our especially those of you who called in or tried to call in with your questions or comments. So sorry, we did have a little more time to get the more callers, but hopefully we'll be able to do this again and be able to devote a full hour to program reminder at 7 tonight to Jesse Ventura and legislative leaders Rodger, Moe and Steve swiggum will be answering citizen forum. Jen's about what to do with a surplus. You can hear that broadcast live here on Minnesota Public Radio. I'm learning Benson. Be sure to tune in for the next All Things Considered for all the day's top stories plus insightful conversations and commentary. It's all things considered weekdays at 3 on Minnesota Public Radio k n o w FM 91.1 you're listening to Minnesota Public Radio. We have a light snow 2 degrees above zero windshield 21 Below at Contra W FM 91.1 Minneapolis. And st. Paul the chance for light snow today tonight and tomorrow in the Twin Cities High about as warm as it's going to get high tomorrow now about the same kind of temperature reading so not much changes forecast.