MINNEAPOLIS (AP) -- Shares of Northwest Airlines Corp. surged nearly 10 percent on Thursday on an analyst's upgrade and word that a Connecticut investor had bought 6 percent of the nation's fourth-largest airline. The stock boost came on a day when talks aimed at averting a mechanics strike offered few public signs of progress.
Northwest shares rose 48 cents, or 9.6 percent, to close at $5.48 on the Nasdaq Stock Market. They have gained 38 percent since Monday.
Northwest and its mechanics are negotiating in Washington as they seek a deal before a strike deadline of 12:01 a.m. EDT on Saturday. The two sides spent Thursday talking about non-economic proposals, said Steve MacFarlane, assistant national director of the Aircraft Mechanics Fraternal Association.
Late Thursday, union leaders expressed pessimism about reaching an agreement.
''This evening Northwest Airlines proposed what they term as their last best offer. This offer reflects Northwest Airlines' consistent extreme position and leaves us with little hope of reaching a deal before (Friday's) strike deadline,'' MacFarlane said.
Northwest spokesman Kurt Ebenhoch confirmed that the airline had made its best and final offer, but declined to offer details. He said he understood talks would resume Friday morning.
In a note to investors, Bear Stearns analyst David Strine wrote that he believes there's a 55 percent chance Northwest mechanics will strike. Airline management has vowed to fly anyway, and has lined up replacement mechanics.
Strine wrote that ''management can pull it off.''
And he said Northwest could survive next year if a few things work out in its favor: The airline will either make a deal with mechanics or replace them. Flight attendants would probably make a deal then, too, he wrote. And if Congress grants pension law changes and Northwest can refinance some of its debt, it could halt its cash burn, Strine wrote.
But if Northwest doesn't get pension relief or fails to refinance its debt, he predicted its financial situation would ''deteriorate substantially'' in 2007.
Investor Philip B. Korsant disclosed the new 6 percent stake in a filing with the Securities and Exchange Commission on Thursday. The filing was in his own name and those of Ziff Asset Management LP and its general partner, PBK Holdings Inc., all of Greenwich, Conn. It said they bought 5.27 million shares on Aug. 10.
No phone listing was available for the companies, and Korsant didn't return a telephone message left at his home.
Northwest is seeking $1.1 billion worth of annual labor savings. It wants $176 million from mechanics.
Mechanics made a proposal on Wednesday that they said was worth that much. But Northwest rejected it, saying the offer was worth only $100 million in savings. Their disputes over previous offers have hinged on whether savings from earlier layoffs were counted.
Also Thursday, the union local that represents 2,700 Northwest ground workers in Detroit said it would not honor the mechanics' picket lines if there's a strike. Detroit is one of Northwest's three U.S. hubs.
Copyright 2005 Associated Press
