Posted on: Saturday, October 2, 2004

Northwest's new CEO says he will continue airline's current strategy

By Joshua Freed
Associated Press

MINNEAPOLIS — Northwest Airlines Corp.'s new chief executive, Doug Steenland, promised yesterday that the airline's strategy would remain constant when he succeeds Richard Anderson, who is leaving to work for the UnitedHealth Group, the nation's largest health insurer.

The airline will continue to seek nearly $1 billion in labor concessions, push for a major expansion of the Minneapolis St. Paul-International Airport and add Midwestern routes, said Steenland, who previously was the airline's president.

The continuity shouldn't come as a surprise, he said, since he and Anderson had been working in a "collaborative, almost sort of a co-CEO operation over the last several years." Both men assumed the top two jobs in February 2001.

Anderson is leaving for a job across town with the UnitedHealth Group as an executive vice president with unspecified responsibilities starting Nov. 1. The move fueled talk that he was being groomed to run the insurer — but a company spokesman denied that was the case.

In a conference call with reporters, Steenland said Anderson's departure "was a matter that he had had under consideration for some period of time" but did not elaborate. Anderson will remain on Northwest's board.

In leaving Northwest, Steenland said Anderson is "not entitled to and will not receive any form of golden parachute and the like."

Anderson made $2.4 million in total compensation at Northwest in 2003, versus $1.9 million for Steenland.

In trading yesterday, Northwest shares closed up 34 cents, or 4 percent, at $8.55 on the Nasdaq. UnitedHealth shares rose 2 cents at $73.76 on the New York Stock Exchange.

Northwest has suffered massive losses in recent years — more than $2 billion since 2001. Then there were higher fuel prices that Northwest hedged less than other airlines, and what it says is a need for labor concessions to stay competitive.

Still, some analysts said Northwest is in a better position than many of its hub-and-spoke competitors. It has $3 billion in cash, its markets are less susceptible to low-fare competition, and its extensive, lucrative Asia routes are hard for other carriers to match.

Leadership shift at Northwest Douglas M. Steenland, incoming Northwest Airlines Corp. chief executive Age: 53. News: Named yesterday as chief executive of Northwest Airlines, adding to his title of president. Career: Named president in February 2001. Joined Northwest in 1991 as deputy general counsel. As president, his duties included overseeing Northwest labor relations. Involved in 1993 restructuring and labor concessions. Led 1994 initial public offering. Before joining Northwest, was senior partner at Washington law firm of Verner, Lipfert, Bernhard, McPherson and Hand. Family: Married, two children. Education: Graduated in 1976 from the National Law Center at George Washington University. 2003 pay: $1.9 million. Richard H. Anderson, former Northwest Airlines chief executive News: Announced Northwest resignation yesterday to become vice president at UnitedHealth Group. Age: 49, a native of Galveston, Texas. Career: Named chief executive of Northwest Airlines in February 2001. Had been executive vice president and chief operating officer since 1998. He joined Northwest in 1990 as deputy general counsel and later oversaw technical operations. Worked at Continental Airlines from 1987 to 1990 as an attorney. From 1978 to 1987, he worked as chief counsel to the criminal court judges and as a prosecutor in Houston. Education: Holds a law degree from South Texas College of Law and a bachelor's degree from the University of Houston. 2003 pay: $2.4 million.