(Hint: He's Not Crazy About It.)

Opinion by Kevin 'Hognose' O'Brien, Aero-News Columnist-at-Large

I remember Earl (though that's not his real name). Earl had retired from a really big airline, and had a comfortable pension. Then, the airline tanked. Earl's pension vanished. Earl wound up sitting in a rickety tin shack on an airfield, waiting for a prospective student to walk in. He was a great pilot, and a great instructor, but there was something unfair about a 72-year-old pilot with eleventeen-thousand-hours having to teach bounce-n-goes for, in those days, a few dollars an hour.

Future students might benefit from a new generation of Earls -- the pilots of Northwest Airlines. Northwest has taken an incredible risk with their pensions (and the FAs' pensions, and the mechanics', and everybody's). Northwest couldn't make the latest payment to the pension fund. With a wink and a nod from the Labor Department, it had an escape: instead of putting real cash in the fund, it put in stock of its subsidiary, Pinnacle Airlines. In fact, it put in almost all the stock of Pinnacle. The Pinnacle stock does the pension fund no good at all: it can't be sold or traded, and in fact, its true value is arguably zero.

Northwest has already robbed future Peter to pay today's Paul of high executive compensation, etc. It squandered the post-911 special fund money, and this year it begged off on some of its pension obligations, slipping an IOU with a vague "ma�ana" in there in place of the money. When Labor approved the delay, Northwest claimed that it would make this latest contribution... and it did, enough to pass the blind umpires at the Department of Labor, with illiquid Pinnacle penny stock.

How do we know the Pinnacle stock is worthless? Believe me, if it were actually worth anything, Northwest would sell it, but it can't. It doesn't dare make a public offering of stock in a struggling airline that is the tiny Siamese twin of a stumbling major.

Assuming that the proposed IPO valuation of Pinnacle was correct, almost 2/3 of Pinnacle stock is now unbalancing the pension fund. That they didn't dare go forward with the IPO would tend to argue that the proposed IPO valuation was not correct.

Pinnacle is a Memphis company that operates as Northwest Airlink -- it doesn't even have its own brand; it's basically just a dodge so that the employees of the commuter line aren't protected by the mantle of Northwest's unions. There is a certain irony in the penny stock of the union-busting commuter line being used to dilute the pensions of the union workers, but it's not the kind of 'funny' you can laugh at.

This move is bad for Northwest, bad for Pinnacle, and really bad for the employees. Northwest isn't going to turn around by playing this kind of smoke-and-mirrors games with employee pensions. Pinnacle? Well, Pinnacle can kiss its planned IPO, already on hold because of the line's low value, goodbye. The employees -- well, we know what has happened to them. In technical terms it's called "the shaft." The Northwest employees have seen their pensions take a hit, and the Pinnacle employees have seen their company's chances to raise expansion capital in the next several years evaporate.

The pension deflation is not the only problem facing Northwest employees. The company has also decided to stiff employees on a stock-buyback scheme that the company force-fed the employees in 1993. This bad-faith dealing has inspired suits by the Machinists and Teamsters, and it also serves as a grim reminder of the true value of management's promises to replenish the raped pension fund.

Of course, quite a few Northwest employees are not earning pension credit -- they're laid off or furloughed. This doesn't mean no one at the line is doing well. The senior managers of Northwest, you may be sure, are not in this pension system. I haven't got figures on CEO Richard Anderson's multimillion-dollar compensation in 2003, but 2002 saw him preside over billions of losses and get a million-plus dollar raise.  Now, if you have a small Part 135 operation and you lose $100,000 a quarter, you go under most ricky-tick. See, it's all because you think small. Think big like Anderson, and you can rape the pension fund, lose a billion in a quarter (let me write that out so you can make sure it hasn't shown up on your balance sheet: $1,000,000,000.00), and take home a 126% raise.

Anderson (top), not surprisingly, didn't come up from the operations side of things. He's a lawyer, not an aviator, and began advancing in aviation as a hatchet man for corporate raider Frank Lorenzo at Lorenzo's Continental Airlines. (Lorenzo, who made himself rich running both Eastern and Continental into the ground, can't get an operating license for an airline). Indeed, the only pilot on the board is the guy in the union's reserved seat - along with two reps for other unions, the rest of the board is made up a mixed bag of fellow corporate raiders, minority tokens and empty suits. It's hard to say, for instance, what legendary plagiarist Doris Kearns Goodwin brings to the Northwest board, except a 15-year history of ethical problems and mendacity about the same - maybe that's why she's there, to keep Anderson company.

The compensation of the CEOs of Southwest and JetBlue, both of which made money, is about a half million a year. Combined. Meanwhile Northwest continues to post staggering operating losses, disguising them with government welfare and other one-time windfalls. Anderson's strategy, apart from the devaluation of the pension fund, is to force a billion dollars' worth of concessions out of employees.

When you give yourself a 126% annual raise it's hard to keep up, but that should be worth another couple of million for himself.

FMI: www.nwairlink.com