NORTHWEST AIRLINES has effectively accused its Dutch partner, KLM, of attempting to gain control of the company, as boardroom friction between the two airlines heads towards legal action.

The accusation comes in a letter to Northwest employees, explaining the board's decision to put a "poison pill" in place to protect against hostile take-over. The move, which KLM has threatened to oppose in the courts, was passed on 16 November.

Northwest argues there has been "strong evidence" over the past two years that KLM represents "a creeping control threat". It warns that the Dutch partner could attempt to gain a "disproportionate" share of benefits from the transatlantic alliance if it succeeded in gaining greater control over the US airline.

The letter lists a series of "incidents" which have fuelled Northwest's fears over the true intentions of its partner.

It Accuses KLM Of:

obstructing Northwest's efforts to restructure in 1993, to extract "increased ownership and control rights". Effectively, KLM withheld its consent for the carrier's crucial deal with the unions, which included employee ownership;

attempting to persuade one of Northwest's three union board members that the unions should ally with the Dutch airline against the other shareholders. This incident allegedly took place, involving KLM president Pieter Bouw, in March 1994;

going ahead with the acquisition of the Elders' stake in Northwest, despite an agreement not to increase its holding until "control issues" had been resolved.

Northwest also says that Bouw revealed in a board meeting earlier this year that KLM's long-term objective for the alliance was as a single integrated company, modeled on the Anglo-Dutch Unilever operation.

It adds that KLM, which has actively campaigned for the raising of foreign ownership limits in US airlines, has built up a war chest of $3 billion in available cash.

Source: Flight International