Northwest evicts credit union from buildings, airports

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Northwest evicts credit union from buildings, airports

MINNEAPOLIS (AP) ? Northwest Airlines is evicting its employee-owned credit
union from its buildings and airports after NWA Federal Credit Union
refused to pay annual licensing and royalty fees it said totaled more than
$6 million. Northwest said it's entitled to the fees for providing access
to its employees and use of its name. But credit union officials said
regulators have told them that the fees demanded by the airline are
illegal. The evictions will have little impact on the credit union's 300
employees, and airline employees will continue to be able to bank at the
credit union. With almost $1.4 billion in assets, NWA Federal Credit Union
is the largest credit union in Minnesota and the 46th largest in the country.

In a letter sent last month to credit union CEO Paul Parish, NWA executives
cited the current economic crisis facing airlines as justification for its
demands. Northwest has laid off about 17,000 employees in the past two
years and has cut annual expenses by $1.3 billion. It's seeking an
additional $950 million in pay cuts from union and salaried employees. A
union leader said not having the credit union or its automated teller
machines on company property will constitute a major inconvenience for
Northwest employees. "The credit union is an asset to employees and
Northwest," said John Massetti, secretary treasurer of District 143 of the
International Association of Machinists, which represents Northwest's
ground workers. "What they're doing is punitive. It's another attempt to
get into employees' pocketbooks," Massetti said.

In a prepared statement Monday, Northwest said: "Northwest Airlines can no
longer subsidize the credit union while it makes $15 million to $20 million
per year in profit. We are seeking fair and reasonable sharing from all
stakeholders in this difficult time and do not believe these initiatives
will impact either the services or costs to credit union members." NWA
Federal Credit Union, formerly called Northwest Employees Credit Union, was
founded in 1938 by Northwest employees. It is a single-sponsor institution
with about 115,000 members. Membership is open to employees of Northwest
and its related companies, as well as retirees and family members.
Northwest also has filed a trademark complaint against the credit union.

Kevin Chandler, president of the Minnesota Credit Union Network, a state
trade group, said he'd never heard of a company making such demands. "It is
an extraordinarily shortsighted move that will be viewed by employees as
another slap in the face," he said. NWA Federal Credit Union pays Northwest
rent for seven offices, including four in Minneapolis, and 23 ATMs at
Northwest facilities across the country. In July, NWA Federal Credit
Union's lease for its Detroit office and seven ATMs expires. Its lease for
the six remaining offices and 16 remaining ATMs expires March 21, 2004. A
spokesman said the credit union is looking for new facilities, and notes
that members will still have access to a network of about 12,000 ATMs.


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