Northwest Exits Bankruptcy, Showers Executives With Cash

Northwest has escaped from bankruptcy, and to celebrate, they are showering their executives with cash. The AP wryly notes that though the airline is shedding court protection from its creditors, it returns “into an industry besieged by higher fuel costs and crowded with competitors.”

That didn’t stop Northwest from throwing open the vault. Under the reorganization plan, the top 400 managers will receive an equity stake in the company worth $297 million; CEO Doug “I Deserve It” Steenland will receive $26.6 million in stock and options; and, departing Chairman Gary Wilson will receive $2 million, dental and medical insurance for life, and $75,000 per year for an office.

The airline emerged from bankruptcy by cutting $1.4 billion in labor costs. Welcome back, Northwest! — CAREY GREENBERG-BERGER

Judge OKs Northwest bankruptcy plan [AP]
(Photo: Drewski2112)

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  1. polarogak says:

    As long as they want to fly me from Portland to Hawaii for $299 trip, they can do whatever the hell they want.

  2. FREAKHEAD says:

    Welcome to NW Airlines, thanks for spending $900.00, here is your half can of pop. Oh and no peanuts for you!

    I fly with these cats all the time. They broked my laptop and my luggage on the same flight. They made me check my laptop at the gate b/c they said it wouldn’t fit. Funny how I fly with them twice a month and it always fit before.

    Least they haven’t lost luggage yet, knock on wood.

  3. orig_club_soda says:

    “Showering with cash” by receiving stock options? Hahaha. I dont know if you are being glib or just hating

  4. orig_club_soda says:

    @FREAKHEAD: When gas is $4 a gallon? And your flying 3000 miles… If you are paying $900 that amounts to 30¢ a mile. Its cheaper than a taxi. You could pay half as much for driving, but it would take a week. You are paying for speed. To think you only get a soda and peanuts!? I think there are more nuts in your skull than in the bag.

  5. timmus says:

    I’ve got a better idea… how about forcing those executives who drove the airline into bankruptcy to pay back their salaries? I’m getting sick of hearing about executives bathing in an orgy of money while the company bleeds red.

  6. TVarmy says:

    That’s disgusting.

    @Frickhead: In the last 3 years, I haven’t been on a single flight that gave me the full can of soda. For my generation, it’s our version of nostalgia about when flight was glamorous. That’ll really suck when I visit some relatives this summer, because the TSA is going to take my “explosive” water that I brought from home… :(

  7. TVarmy says:

    @orig_club_soda: It’s more $3.13. Based on some quick back of the napkin math, my Prius costs 31c a mile, so driving actually costs more on long haul trips (Counter intuitively), but there’s still a benefit to driving, aside from sight-seeing and side trips and you getting to pick your own accommodations. Air travel burns a ton of fuel, and it creates an awful lot of emissions. In one flight, an airplane releases as much CO2 as an SUV does in a year to 3 years (I’ve heard different numbers). However, any car will release the emissions it would make in 10 days of average driving on that trip, SUV or hybrid.

    But then again, that doesn’t do much directly for your bottom line.

  8. orig_club_soda says:

    @TVarmy: Use a calculator dollars/mile = dollars per mile. $900/3000mi =$.30 per mile. Its cheaper than your Prius!

    Sheesh. I bet you want to pay youur teachers more for you inability to do math.

  9. orig_club_soda says:

    @TVarmy: The other thing to consider is that you aren’t flying alone. You are flying with a hundred plus other passengers. How does the pollution of 100 SUVs compare to one flight? Its not like we fly alone line Al Gore does every day.

  10. Helpful_Guy says:

    I’m taking one of their flights today…and you know what? I hate them all…

    Why is it that I’m expected to show up on time and deal with so much crap to check in and they aren’t responsible for anything?

    If I’m late, the plane leaves without me, but they can keep delaying flights to their hearts content.

    There are a few industries that just plain suck: airlines, credit card companies, cable companies, cell phone companies – man I could keep going and going.

    If you ever find yourself traveling in Europe, check out Ryan-Air. I flew from Rome to Brussels for like $20. Everything is on the cheap but they get you to your destination without troubles and headaches. I wish they flew in the US…

    Thankfully the Vegas airport has free wi-fi! … now if they would only turn on the damn A/C.

  11. notebook says:

    They get all this money, and like little kids with grubby hands, blow it on people that don’t actually do much, instead of better service for customers or better wages for ground workers and pilots.

  12. Amy Alkon says:

    What does this mean, from the article, that shareholders shares were canceled? Does that mean that previous Northwest shareholders were all told to just go blow?

  13. Xkeeper says:

    @Helpful_Guy: Sorry, but Nevada Power recently reinforced the stick up Las Vegas’s collective ass and unless you like hemmoraging money (as Consumerist says quite often), you can’t turn on the AC very much.

    Sorry.

  14. sunwukong says:

    Amy Alkon: That’s exactly what it means — a company emerging from bankruptcy is essentially starting over. Its debt and liabilities have been discharged in favour of its new form and plan with the approval of the secured creditors, i.e., neither employees nor public shareholders.

  15. TWinter says:

    @Helpful_Guy:
    Ryan air is great when it works, but they are notorious for screwing people over. When I was in Scotland last summer, one of the papers did a whole series on people who had been screwed by low cost airlines and Ryan air was prominent in the examples. They are particularly bad about rescheduling if they have to cancel a flight – one story was about a bunch of retirees whose return flight from Germany back to the UK was canceled because of a mechanical problem. Ryan air didn’t have any free seats on that route for the next week and they refused to rebook them onto another airline or to send an extra plane for all the stranded passengers. So this bunch of old people had to set off on some god awful train journey to get to Paris and connect to the Eurostar service through the chunnel. They spent a small fortune on trains and never got a penny of compensation or an apology out of Ryan air.

  16. FREAKHEAD says:

    @orig_club_soda

    Actually, the flights are usually short, no where near 3000 miles, (live smack center of the US) and I was commenting on how you don’t even get peanuts but the CEOs are getting hundreds of millions of dollars.

    I think you have nuts in your head if you think removing simple comforts for paying customers from flights so the CEO can get another hundred million dollars.

    Some of us who fly a lot, I take 2-3 trips a month, can sometimes get stuck at a gate or on a plane for hours at a time. Some of the smaller airports, like the one I fly out of, won’t allow you to take drink or food past security and don’t offer either on the other side. I know its a 10 cent bag of snacks, but it can really help you get over the hump. It wasn’t like I was asking for personal back massage for each leg of my flight, it’s a frickin snack bag.

    Perhaps you could take the flight with no seats, since you don’t mind the lack of blankets, pillows, foot space and now food on most domestic flights.

  17. downtownblue says:

    What?! No logo change?

  18. John Stracke says:

    @orig_club_soda:

    “Showering with cash” by receiving stock options?

    It’s not stock options; it’s stock. That’s what “equity stake” means.

  19. Wormfather says:

    @timmus:

    The problem is that when a company goes into chapter 11, it is damned near impossible to get good executives or managers for that matter. In order to lure in/keep the good talent you have is to assure them that they’ll be getting a piece of the pie when/if they can get you through the mess.

    Would you work for a company in bankrupcy unless you had some sort of incentive?..well maybe, if you were desperate, but that’s not the type of talent the company needs, does it?