Detroit Local 94 Members:

We have compiled the following information to answer some of your immediate questions about our new bargaining agreement, the equity claim and buyout distribution delays.  We will do our best to keep you updated as the situation evolves and additional information becomes available.  Please remember our monthly DTW base meeting scheduled for this Wednesday, June 13th at 1:00 p.m.  (See agenda posted at the end of this e-mail.)

Important Reminder Regarding 401(k) Contribution Changes

Many Flight Attendants have made adjustments to their 401(k) contributions in anticipation of the equity claim check, but do not want these changes to continue on their 27th paycheck.  The deadline to change your 401(k) contribution in time to affect your June 27 paycheck is 1500 CDT on Friday, June 15, 2007.  Call (800) NWA-SAVE Monday through Friday between 7 a.m. and 7 p.m. Central Time or access the website at https://nwa401k.csplans.com/portal/PortalLogin.jsp .  You can also access your 401(k) account via RADAR by clicking on 'Pay and Benefits' and then 401(k).

Our Contract is in Effect - This is Only a Delay for the Equity Claim, Early Out, Etc.
Some flight attendants have asked whether our new contract in effect or not, and if it is, why is only the equity claim and some of the other money delayed? Let’s be absolutely clear about this: the Green Book was ratified and our new contract is in effect.

For legal reasons, we have had to delay the distribution of the equity claim money (approx. $116 million), the early out money (approx. $32 million), etc. on the remote chance the challenge by Guy Meek overturns the election. It’s not because those provisions are no longer in effect, but rather, it’s because if the money were distributed and later the challenge were to overturn the vote it would almost be almost impossible to undo nearly $150 million in payments. The last thing we need is for the Company to then demand that the flight attendants return all that money.

There’s also a legal risk, in the remote chance that the election is overturned, that might prompt the Company or even other creditors to sue the union or sue all the individual flight attendants to recover the equity claim money. AFA Legal would, of course, aggressively defend against any such lawsuit, but with the huge amounts of money involved here the only prudent course is to delay the distribution until the challenge is resolved, or until it’s withdrawn by Mr. Meek.

Unless and until the election is overturned we still have a contract.  Meanwhile, the Negotiations Committee continues to work through implementation issues with the Company’s negotiators. Some items have been implemented retroactive to June 1, others will be implemented at the beginning of the July bid month. Details are being provided by the Negotiations Committee as they are hammered out. The Grievance Committee is also working under the new contract, filing grievances as necessary.

The contract is in place and although we have every confidence in the voting process and it is very unlikely that the vote will be overturned, we cannot pre-judge the investigation. If Mr. Meek submits any evidence AFA is obligated to investigate. He has not submitted any evidence yet; however, he has until June 22 to do so. AFA’s Ballot Certification Committee will act promptly to complete the investigation. After that it’s up to Mr. Meek and Mr. Ibarra to decide whether to pursue the legal action they have threatened, or to accept the results of the investigation, and the results of the election, end the dispute and thus allow the money to be distributed.

Questions and Answers about the Delay of the Equity Claim and Related Issues

Q. How long is this delay likely to take?

A. That will depend on what Guy Meek and Jose Ibarra do next. AFA has given Mr. Meek until June 22, 2007 to submit evidence to support his allegations. If he submits the evidence sooner, then the investigation will start and end sooner. The investigation will take about 1 to 2 weeks after we receive the evidence, if any. If Mr. Meek and Mr. Ibarra then decide to pursue a legal appeal into the courts, that could take months, and the funds would likely still need to be held back in order to avoid any legal risk that the court would order flight attendants to return the money. It is our hope that this matter will be resolved, or withdrawn by Mr. Meek, quickly so that the funds can be released to the flight attendants.

Q. Why do we have to allow Guy Meek to delay the distribution?

A. When we received Mr. Meek's challenge we immediately sent it to our in-house Legal Department. Their first assessment was that there is no merit to the allegation whatsoever. Nevertheless, a member is entitled to assert such a challenge and we must follow the procedures of the AFA Constitution and Bylaws and Policy Manual and investigate whether there is "due cause" to overturn the election.

Our attorneys also consulted with our outside bankruptcy and corporate lawyers to seek their advice. Because of the magnitude of the money involved, even the very slightest possibility of the ratification being overturned requires us to ensure that the entire equity claim distribution (and the Early Out / Surplus Severance Payment) is delayed. If the money were distributed, our attorneys advise us that the union and the individual members who receive the money could later be sued by the Company or by other creditors from the bankruptcy case in an attempt to recover the money if the challenge succeeds in overturning the results of the vote. This is very disappointing to us, and I am sure to the vast majority of those who were counting on receiving this money at a specified time. It is our hope that this matter will be quickly resolved, or withdrawn by Mr. Meek, so that the funds can be distributed to the flight attendants.

Q. If the challenge is without foundation, as I believe it is, what steps will be taken to seek personal damages against Mr. Meek and Mr. Ibarra for the loss that their action is immediately causing to each employee?

A. With the threat of litigation already being announced, it's not appropriate to discuss possible future legal action taken on behalf of the Union and our members. The best outcome would be for this matter to be resolved without litigation so the funds could be distributed to the flight attendants as soon as possible. AFA will conduct a thorough and fair investigation, and we will aggressively defend the Union and our members in court if Mr. Meek, Mr. Ibarra or others decide to file a lawsuit to delay this matter further. Our goal is to get the money distributed.

Q. Will we, the employees, be responsible for returning to the company the money received from the sale of the stock plus the 35% difference between the face value of the stock and the price at which the stock was sold if the affirmative vote is set aside?

A. Our position would be that we had a ratified agreement at the time the claim was sold and are not required to repay any of the money, and certainly not the original $182 million. That claim was rightfully sold for approximately $116 million. However, if the vote were overturned the Company or the other creditors might take a different position. That's why the money is now being held in an interest-bearing account for the benefit of the flight attendants. The distribution is being delayed –even though we believe there is only a remote chance that Mr. Meek's challenge would overturn the vote results –because overturning this vote after the money is distributed would potentially have enormous financial and legal consequences. This delay avoids a potential lawsuit against the Union and against the individual members who would receive those funds in the event the Company or other creditors would seek the return of those funds if the vote is overturned.

LOCAL EXECUTIVE COUNCIL 94 MEETING

                                                                Wednesday, June 13, 2007, 1:00 p.m.

AFA-CWA Union Office

 (under gate 8, take the elevator to the apron level and follow the signs)

Agenda Topics:

·        Governmental Affairs - Diana Mitchum, MEC AFA Governmental Affairs Vice Chair

·        EAP Presentation - Sally Lukas, MEC AFA EAP Chair

·        Grievance Committee Update - Patricia Reller, LEC 94 Grievance Committee Chair

·        Upcoming AFA Northwest Airlines Master Executive Council Elections

·        Late Agenda Items

In Unity,

Your DTW Local 94 Council