Northwest Aims to Cut Labor Costs by Nearly $1 Billion
CAROL COSTELLO, CNN ANCHOR: In the world of business, taking a walk, his company on the brink of bankruptcy, American Airlines' CEO Don Carty steps down. The move follows an emergency board of director's session. Carty came under fire for a plan to give executive bonuses while union members were agreeing to millions of dollars in concessions. Carty ultimately cancelled the bonuses. Two of three key unions have said they'll honor concession agreements with small changes that could avert bankruptcy. And that is only part of our business buzz this morning, because another airline is using the threat of Chapter 11 in an effort to get its employees to agree to pay cuts. For more on that, let's head live to New York and Susan Lisovicz -- good morning.</s>SUSAN LISOVICZ, CNN FINANCIAL NEWS CORRESPONDENT: Good morning, Carol. It's a familiar story, isn't it? Northwest Airlines is asking its employees to accept $1 billion in annual cuts and says that if they don't that the company could be forced into Chapter 11 bankruptcy protection. But the rank and file is upset because they say, among other reasons, the top two executives received a $2.5 million bump in compensation last year. They plan to demonstrate today in New York where the company is holding its annual shareholder meeting. They're also upset about the length of the contract cuts. They say that if the industry improves, say five years from now, there are no givebacks. The CEO, meanwhile, Richard Anderson, is defending that little bonus he received last year. He said that Northwest outperformed its rivals and also met its financial targets last year. Analysts say Northwest is actually in a little better financial shape than some of its rivals, but it is one of the major carriers to Asia and therefore among the factors that has hurt its bottom line is the outbreak of SARS and the restriction of travel there -- Carol.</s>COSTELLO: It just astounds me that if you're the CEO of a company and you know that you've received this big bonus, how do you get the nerve to ask your employees to take a huge pay cut?</s>LISOVICZ: It's very tough for credibility. And even if Northwest did meet its targets and did outperform its rivals, it was a really tough year for the industry overall. So I would say that among other things, expressed a lot of confidence in his ability to lead and Northwest's ability to ride out this storm.</s>COSTELLO: Yes, confidence or arrogance, but it's all a question of semantics. Susan Lisovicz, many thanks, we'll get back to you in the next half hour. TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com