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Center should survive merger

ST. PAUL - The only major Minnesota Northwest Airlines operation outside of the Twin Cities is safe if Northwest merges with Delta Air Lines, the Minnesota Senate president said Monday.

ST. PAUL - The only major Minnesota Northwest Airlines operation outside of the Twin Cities is safe if Northwest merges with Delta Air Lines, the Minnesota Senate president said Monday.

But there are no other guarantees if a merger occurs.

Sen. James Metzen, DFL-South St. Paul, said he talked to Northwest President Doug Steenland and brought up the reservations facility in Chisholm.

"It will remain open no matter what happens," Metzen reported that Steenland said.

Northwest and Delta officials refuse to comment about merger talks.

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A letter from Northwest Vice President Richard Hirst indicated that the airline supports Minnesota jobs, but he called a merger "speculation."

Sen. David Tomassoni, DFL-Chisholm, said the reservation center in his hometown employs 484 people.

"We are obviously nervous about what will happen if there is a merger," he said.

The state provided $9.7 million to construct the building, and all but $1 million has been forgiven because Northwest met its obligation of providing at least 300 jobs at the center. If jobs drop below 300, the airline would have to begin making lease payments to continue using the facility.

Statewide, Northwest employs 13,657 Minnesotans, Economic Development Commissioner Dan McElroy told the Senate Business, Industry and Jobs Committee. The economic impact Northwest has on the state is

$300 million, about 1.3 percent of the state gross domestic product, he added.

McElroy said he feels more than 1,100 Northwest headquarters employees, who work in suburban Eagan, are most at risk of losing jobs if the airlines merge.

Most employees work in the Minneapolis-St. Paul International Airport, and McElroy said the hub operations there probably are not at risk.

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To bail out the airline from financial problems, the state loaned Northwest $315 million in 1992, and $245 million remains unpaid.

Tom Anderson, a lawyer for the Metropolitan Airports Commission, said if Northwest reduces its Minnesota presence, it would have to repay the loans faster than if employment remains static or rises.

In a statement given to Metzen's committee, U.S. Rep. Jim Oberstar said even if a merged airline keeps all jobs in Minnesota, a merger would not be a good idea.

"A decrease in competition would be likely to produce higher fares and less service throughout the land," the Minnesota Democrat said.

The committee he leads in the U.S. House is ready to investigate a merger once it is announced, Oberstar added.

Davis works for Forum Communications Co., which owns The Forum.

He can be reached at (651) 290-0707 or ddavis@forumcomm.com

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