Delta to give all domestic employees raises in 2012

[Kev3188]

When will people understand PAN AM was NOT a merger!

I know. I get it.

But when someone says, "Employees who came to DL through mergers were treated the same as DL people except for pensions which differed with each carrier," I have to assume they meant more than just WA and NW.

There is one reason DL has paid its employees close to industry standard: Because the unions have negotiated those salaries at other carriers. They (DL) do not do this because they love to make less profit by paying higher salaries....

BINGO.

Actually, Pan Am F/A's fared pretty well when they were hired at DL. Remember, they came to us when DL acquired certain Pan Am assets-it was certainly not a merger. DL protected the top 3,000 then slotted Pan Am F/A's. I'm not sure they received the same deal at UAL.

After the slotting, it was 3:1, correct?

Look, everyone is free to work (or not work) anywhere they want. There are many kool-aid drinkers at DL. It is not the utopia they seem to think it is. DL is not perfect, they have made mistakes. I left right before the merger, however, my better half is a PMNW pilot. He lost seniority. He thinks the technology is antiquated. He hates the kool-aid. But at the end of the day, he thinks it's a better work environment than he ever saw in his 12 years at NW.

Your better half and I must have started at ~ the same time. I can tell you that in my experience, the environment was much *better* in my ~12 years at NW prior to the merger, and that included some pretty dark times. As for the rest of his thoughts, we agree.

To argue over who did better during a BK is silly-nobody does well during a BK.

It's all relative.

Keeping quality talent is hard work, even in this economy.

DL seems to have very little interest in attracting and/or retaining talent; at least for the ACS group.

 

[Kev3188]

It really doesn't matter whether you compare what happened in BK or what is happening now or what happened pre-deregulation... DL employees have fared as good as or better than their network carrier peers....

No they didn't.
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And yes DL employees - PMDL and PMNW have received pay raises over the past year or will in the coming weeks as a result of the termination of the representation process

Weird; I just lost a lot.

When will that be restored?

 

[WorldTraveler]

But that is not unique to DL (or to airlines for that matter). Our raises every year (non-union) are based on keeping us competitive with area hospitals (union and non-union). DL's pay is based on other legacy's (who happen to be unionized). If JetBlue and Virgin America become large enough, I'm sure DL would use them as part of their peer group, and they are non-union (for now).
I don't think anybody (except maybe WT) believes that companies give raises because they want to spend more money. They need to remain competitive with others to get (and keep) talent.

Yes, companies want to spend money where it makes sense. It’s called an investment. You spend money on a plane because it can make you money. You spend money on employees because doing so will help your bottom line. If the expense you choose to make results in greater revenue, then it is generally considered a good investment. I can’t understand why some people can’t comprehend that some employers invest in their employees because they want the employees to continue to perform well. Again, it is no surprise that some of the highest paid employees in the airline industry work for companies that are also performing at the top of the industry financially.

But when someone says, "Employees who came to DL through mergers were treated the same as DL people except for pensions which differed with each carrier," I have to assume they meant more than just WA and NW.

Or perhaps you made an incorrect assumption.
We could argue this point as well but DL didn’t consider PA a merger and neither did UA – and DL and UA bought almost all of PA’s assets during the final 7 years PA operated.
DL did in fact hire far more PA employees than UA did for the Pacific acquisition which was the largest piece of Pan Am that United bought. I’m not sure if UA hired any PA employees as part of the LHR or Latin America acquisitions but DL hired 6500 PA people as part of the TATL/Shuttle acquisition compared to I believe 3000 by UA for the Pacific acquisition in 1985. Any PA employee hired when DL acquired the TATL and Shuttle assets fared far better than when UA bought the Pacific, a much larger network.


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You and I and anyone else can argue about how well DL employees did or did not fare, but other than your personal circumstances and a few anecdotal citations, no one has yet to show yet a SINGLE piece of data that shows that DL’s employees did not fare better.
The most accurate piece of data is that DL and NW had an IDENTICAL labor CASM at the time they merged which came about a year after both exited BK. CO had a lower labor CASM with DL and NW with the next lowest labor CASMs. If EITHER DL or NW employees ended up with lower pay or benefits coming out of BK, the cost should be reflected in the companies’ CASMs.
When you factor in that the number of FT equivalent employees at DL dropped the least (35%) of any of the formerly BK airlines in the 2000s compared to 39% for NW and more than 50% for UA and US (including the HP merger), then it is absolutely correct to say that DL employees fared better than their network peers.
AA and CO laid off fewer numbers of employees and CO cut its pay far less than the rest but AA employee pay cuts were similar to if not larger than their network peers who were in BK.
As much as you and others would like to believe otherwise, DL employees did in fact fare better than their network peers.
But that isn’t nearly as relevant as the fact that DL’s pay raises (recent and announced) make DL employees as a group the highest paid in the network carrier industry – and that comes as AA inevitably will cut its employees’ pay deeply in BK. When you consider that UA/CO pilots collectively are paid 15-20% less than DL pilots, then what DL employees are paid above the industry is not something that other carriers can easily or quickly match.
Kev, I am glad that the union helped you in the past and I am sorry that your personal circumstances have fared so poorly under DL….others clearly have not found the transition nearly as difficult as you have. I truly hope that 2012 will bring an upturn for you.

 

[700UW]

If you really believe that than its pointless to try and educate you.

NW got more back in their lump sum claims, earned higher wages, and paid less for medical and lots of things, you know this, it has been told to you many times, you just choose to ignore it cause you can never wrong, the CEO of the DL Cheerleaders.

The facts are right in front of you, and you ignore them, unreal.

Take the time and actually learn and read the information out their.

 

[WorldTraveler]

If you really believe that than its pointless to try and educate you.

NW got more back in their lump sum claims, earned higher wages, and paid less for medical and lots of things, you know this, it has been told to you many times, you just choose to ignore it cause you can never wrong, the CEO of the DL Cheerleaders.

The facts are right in front of you, and you ignore them, unreal.

Take the time and actually learn and read the information out their.

It is NO SURPRISE that DL employees voted not one, not twice, but multiple times (was it 8 or 9?) that they weren't interested in any unions... you and others have REPEATEDLY been asked to provide data to back up your claims but have produced NONE.
And I have seen the material that was provided to DL employees - and it did not provide anything that was worth convincing them that unions could add value.
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So you all continue to pat yourself on the back with how much value the unions have added... DL employees didn't think so and they just let THEIR employer convert 20,000 union jobs to non-union status.
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If unions had presented half the value that you think they have added, then the unions would have been more successful in converting some of the DL, B6, and VX employee groups to union status. But they haven't succeeded.
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I would quit worrying about arguing with me if you care about the labor movement and instead focus on coming up w/ a strategy that will allow labor to at least hold onto what they have - and if they are really lucky, begin to grow again.

 

[Kev3188]

Why do you keep throwing B6, and VX into the mix? This topic is about DL. But since you continue to do so, how 'bout discussing G4, Omni, EV, and other carriers who *have* decided recently that securing representation was the correct route to go? Let's not forget about large groups at both CO and FL doing the same.

 

[Kev3188]

Or perhaps you made an incorrect assumption.

Fine. Who'd you mean then? Northeast? Chicago & Southern?

Kev, I am glad that the union helped you in the past and I am sorry that your personal circumstances have fared so poorly under DL….others clearly have not found the transition nearly as difficult as you have. I truly hope that 2012 will bring an upturn for you.

It's not about me. There are thousands of us.

BTW, you can drop that condescending BS anytime.

 

[WorldTraveler]

Why do you keep throwing B6, and VX into the mix? This topic is about DL. But since you continue to do so, how 'bout discussing G4, Omni, EV, and other carriers who *have* decided recently that securing representation was the correct route to go? Let's not forget about large groups at both CO and FL doing the same.

DL has had post-deregulation era mergers with Western and Northwest. Pre-deregulation included Chicago and Southern and Northeast. Asset acquisitions of Pan Am.
My comment was focused on WA and NW... I am not sure there is enough written history to know the details of how the C&S and NE mergers went - and I certainly wasn't around. Pan Am, as noted, was an asset acquisition - there was no labor integration process because the employees were hired in as DL employees w/ the noted seniority levels. DL took on no pension obligations for PA.

Your question is absolutely valid and we should consider both sides ... we can and should include the postives for the labor movement, esp. in the airline industry which has been very hard hit.

But let me ask you to list the numbers of formerly unionized positions that have been lost due to downsizing and business failures and then add in the fact that DL has eliminated tens of thousands of formerly unionized positions through acquisitions, and the pilots have been the only major group that has remained unionized in every merger.
Let's also note that CO and FL groups that recently voted for unions did so in large part (based on what was posted in online chats) based on the fear of what would happen should those carriers be acquired - which is what happened... It doesn't make their conversions to unionized status any less valid but those jobs would have become unionized anyway.

But even if you go back all the way to deregulation, I am certain that there have been more unionized jobs converted to non-union status by DL alone than were created by new elections. And let's be honest that the reason DL is so unpopular with the labor movement is because of that track record of eliminating union positions.


I'm sorry if you found it condescending, Kev. That was not what is intent. There really are people who wish you and others well. Really.

I truly do hope this year is good for you. No, the best.

 

[WorldTraveler]

As to the question of whether DL employees or their non-union counterparts fared better in BK, take a look at the annual reports that were filed with the SEC by DL and NW and then also look at this article which was cited on another thread http://www.swelblog.com/articles/if-history-is-a-lesson-americans-labor-cuts-will-be-large.html.

For DL and NW's 2007 annual report (issued in early 2008), DL and NW each compared their labor costs 2007 to 2006 and then also 2006 to 2005.
Remember DL and NW filed for BK on the same day. A comparison of their cost data is about as close of a comparison as can be made.
Both DL and NW said their labor costs went down about 4% in 2007 compared to 2006.
But in 2006 compared to 2005, DL said its labor costs went down 17% (page 35 of DL's 2007 annual report) while NW said its labor costs (same line item) decreased 28.5% (page 29 of NW's 2007 annual report) with the following note for NW:
"Salaries, wages and benefits decreased primarily due to consensually agreed upon CBAs, wage reductions imposed under
Section 1113, reduced mechanic pay and headcount, the reduced level of flying, the freezing of the pension plans, and curtailment
charges recorded as pension expense in 2005. Pension curtailment charges in 2006 were recorded as reorganization expense and
not included in operating expense."
Perhaps the 5000 or so mechanics that NW terminated constituted 41% of all the labor cost cuts but the cuts to NW's labor costs were indeed much larger than at DL.
From UA's annual reports covering its first 2 years in BK, its labor costs decreased 25% in the first year and another 20% after that.
US' employee cost data is highlighted in the article.
Note that in UA's first year of BK, labor cost cuts amounted to 90% of all the cost cuts the company made. UA employees paid an enormous price in BK.

It is also worth noting that by the end of 2007, DL had increased revenues by 9% compared to 2006 while NW had increased revenues 2.9%. DL's revised business plan with increased international flying clearly allowed DL to return to profitability faster - which has resulted in DL employees recovering what they gave up faster than other airlines' employees.

 

[700UW]

You just dont get it and its right in front of your face.

 

[700UW]

You really need to think about it, your taking gross total numbers, not how each employee gave up in chapter 11 individually hit them in their wallets or not even having a job, and who came out of chapter 11 more intact, and the answer would be PMNW!

 

[NYCDelta]

the slotting, it was 3:1, correct?



Your better half and I must have started at ~ the same time. I can tell you that in my experience, the environment was much *better* in my ~12 years at NW prior to the merger, and that included some pretty dark times. As for the rest of his thoughts, we agree.

I'm not sure of the ratio-just that they were slotted. It was a big issue to both sides: PanAm F/A's felt they were shafted and DL F/A's felt betrayed by management for 1- Giving PA anything at all (it wasn't a merger) and 2- Protecting the "sacred cows", as they were called (not my term), while throwing the post 3001 DL people under the bus. I came right after and was based in JFK so I was in the thick of it. I hate confrontation so I was always trying to make things better between them on the plane.
I remember making small talk with one PA F/A and asking her "Oh, isn't Priscilla up front former PanAm?", to which she snapped "No! She's National!" And they merged 14 years before!
Mergers and acquisitions are tough, it takes a long time. And I'm not trying to be condescending here, I hope that DL does right by using the chance they were given (to remain union-free) to build trust between itself and employees and get away from that "Daddy Delta is going to take care of everything for you-we're ONE big happy family". That s##t needs to stop already.
Anyway, Kev, good luck!

 

[NYCDelta]

Dupe post!

 

[WorldTraveler]

No, I think I do get it, 700
After pages and pages of debating why DL has given/is giving pay raises to non-contract employees (both of which will make DL employees on average the highest paid network carrier employees in the US), the topic turned to the merits of unions, focusing first on an anecdotal case or two and then shifting to how well unionized employees fared in BK vs. their non-union peers.
I repeatedly asked for some evidence from those that have argued that the unions did better in BK. I heard evidence which I KNOW to be true of how well the unions negotiated to save certain jobs but no one could provide any evidence when asked to show IN AGGREGATE that unionized employees fared any better than their non-union peers.
I don’t think there is any doubt that UA and US employee pay and the numbers of employees at those carriers were decimated in BK and both groups took multiple rounds of concessions. AA employees in AGGREGATE fared better largely because the unions there have done a pretty good job of keeping as many people as possible employed, although individual employees took cuts on par with other formerly BK carriers. AA is clearly not finished restructuring and it will be months before the final toll for AA employees can be calculated.
Clearly DL and NW as companies and their employees fared better by going later through the BK process. Perhaps it was a result of the improved business cycle, and perhaps it was because NW and DL both accomplished a considerable amount of restructuring before they entered BK, but it remains that if you want to play “who ended up better off” then at best it would be a contest between DL and NW employees.
When I finally brought out financial statements that show that the total reductions in labor costs were in fact higher at NW than DL by about 40%, then the best response is that I am refusing to see the evidence that INDIVIDUALS fared better at NW and I really should not try to compare AGGREGATE NUMBERS.
Let’s step back and look at the major components of DL and NW’s restructuring and BKs:
- DL pilots gave up their defined pensions but received stock in the reorganized company in the amount of several billion dollars. The DL pilots suffered the most of any PMDL/PMNW labor groups and the BK claims didn’t cover all of the personal losses many suffered. DL pilots were unionized and had negotiated costly lump sum benefits which DL said were not sustainable. Since BK, the DL pilots have been very accommodating of DL’s strategic growth plans, including of the merger and have used their cooperation to recover what they have lost faster than any of the other workgroups.
- Practically the entire PMNW maintenance staff was laid off after a bitter show down between labor and mgmt in which the company finally used a legal option at its disposal – and terminated more than 10% of NW’s workforce with very little financial recovery for that group of terminated employees. Whether that happened in BK or not is immaterial because those jobs were lost one way or the other. BK is simply a process to accomplish what could not be done outside of court.
- DL maintenance was significantly cut down in size and outsourcing of heavy maintenance increased dramatically – just like it has been at every other network airline that has restructured. DL maintenance since then has been one of the few workgroups at ANY network airline that has grown as DL has expanded its insourcing maintenance capabilities to be larger than any other airline in the Americas. Because there were such a small number of NW mechanics at the time of the merger, they were one of the few large workgroups that neither negotiated a transition agreement with the company (as the pilots did) nor participated in the representation process meaning workgroup alignment happened years ago.
- Most of the rest of the DL and NW labor groups took proportionate cuts… I’d still like to see pay and benefit charts to see how specific workgroups compared but the reality is that the biggest cuts in BK at both DL and NW came from groups other than FAs and non-mechanic ground personnel. While every dollar matters to most of us in our individual bank accounts, neither DL or NW’s restructuring was won on the basis of what happened to this group of the majority of employees.
What is clear is that the groups that suffered the most at DL and at NW were the DL pilots and the NW mechanics… and it is true that the NW mechanic “problem” was technically not resolved in BK – which is why a look back at the entire period of restructuring is necessary. But both groups WERE unionized.
Even if you want to argue that the FAs and non-mechanic ground personnel at NW fared better than their non-union DL peers, then you can’t discount that the cuts that were obtained at one workgroup had an effect on how well or how poorly the others fared. The DL pilots because of the lump sum benefit took the hit to stabilize all of DL’s pension liabilities while getting rid of NW’s in-house maintenance capabilities actually reduced the amount that needed to come from other employees.
But if the whole point of unions is to minimize the pain to any one individual by standing together as a group and ensuring that any benefits that are received are enjoyed by all, then tell me how the approach “you shouldn’t look at the aggregate but at how well subgroups or individuals fared” fits into the union mindset.
The question I posed remains “where is the evidence that says labor as a whole fared better at NW – a highly unionized airline – compared to DL, an airline where mgmt COULD HAVE played one labor group against the other but didn’t. In fact, DL did a better job of spreading the pain and the eventual recovery – and the evidence still has yet to be presented any workgroup as a whole (ie res, airport above wing, etc) did better at NW even if we look at that group in isolation.
But the overarching themes remain that
1. NW doesn’t exist anymore… sorry to be blunt but their Board saw more strategic value in merging the company with Delta – and given that DL has the highest stock market cap in the US even though CO+UA is larger, there is something to be said for the value the combined airline created. Given that mergers in the airline industry NOTORIOUSLY destroy stockholder value, the DL/NW merger did what it was intended to do. And the simple fact remains that every US airline exists for the benefit of its owners – who are largely NOT employees. Employees – and unions – need to figure out how to win while also supporting the companies that employ them.
2. The combined DL/NW employee groups voted where required to do so under the RLA. IN every workgroup there was no desire to unionize by the necessary margin. Due process as defined by law was allowed and appeals were filed and heard and all were dismissed.
3. DL increased the pay of PMNW people within days (in some if not all cases on the FIRST day after the NMB certified the vote). DL has promised a further pay raise of an undetermined amount when the integration process is complete which it should be mid-year 2012. DL is paying its non-contract employees to play nice with each other during the integration process and to continue to make the airline run well, exactly what DL paid the pilots to do as part of the merger agreement.
4. It is absolutely valid that the pay raises for some people do not really move the ball forward because benefit costs have increased. I’d still like to see if that statement can be made after DL pays profit sharing to all employees using the richer PMDL terms.
5. Some believe that Anderson was the villain at NW (even though he wasn’t there when the worst cuts went down) but NW did better in BK (even though he set up the whole BK process and left Steeneland in charge as executor) but we can’t trust him at DL to do the same.... huh?

Paying people to accomplish the company’s strategic objectives is EXACTLY what well run companies do. Unlike unions that negotiate pay and benefits years in advance with considerable risk to the company, DL is in the group of companies that pays its people AS SUCCESS OCCURS for helping the company succeed. That is performance based pay that is tied to accomplishments of a particular time period. The most successful companies in the world use that type of compensation.
This discussion is not a personal attack on any person or their beliefs. Step back and recall that I have repeatedly stated that I believe that airlines can succeed either with unions or not and there are examples to show that position. I have repeatedly stated that well-run companies are able to pay their employees well. I have repeatedly said that the strength of a company’s business plan has FAR MORE to do with the success of the company and its employees than any other factor, including whether the employees are unionized.
Of course, some people don’t want to acknowledge that private enterprise can provide better financial security to employees than unions.
I have repeatedly stated that my primary objective in pursuing this discussion is to provide supporters of organized labor on this forum the opportunity to discuss WHY DL employees specifically and why the labor movement in general continues to suffer setbacks and why specifically in the airline industry the labor movement is losing far more ground than it is gaining.
No one who cares about labor can legitimately not recognize the damage that has occurred to labor through the BK process. No one can also deny that DL has done more to convert formerly unionized jobs to non-union status through an aggressive strategy of mergers and acquisitions.
As we all know, the airline industry leads much of what happens in the general economy.
The labor movement, therefore, must come to grips with what is happening to its membership in the airline industry. They need to figure out ways to better fight the cuts that have come through BK and restructuring and the consolidation of the industry which is forcing fares higher and reducing the demand for workers, including as less efficient regional jets are removed from the total US fleet, further reducing the number of employees that will be needed in the future.
But the labor movement also must recognize that there are companies that have business strategies that are delivering what the labor movement has promised to deliver and those businesses are doing it as good as or better than the labor movement… and those companies like B6, DL, and VX are growing and at least in the case of DL are using its business strategy to take over other unionized airlines.
I fully acknowledge the contribution organized labor has made in the past – but I also cannot ignore the fact that labor is becoming increasingly irrelevant to today’s society. I’m not sure that I really believe the world – or the US – will be better off if the checks and balances that the labor movement has provided are gone or diminished to the point where it is no longer effective. But if the labor movement is not able to reinvent itself, that is precisely the place where it will be.
This debate is not personal and is not targeted at a specific group of people or individuals. It is an intense, intellectual discussion about an issue that matters to 95% of the people on this forum.
My desire is that each of us be able to succeed at the objectives we choose to pursue, including adapting to win in a world that is increasingly hostile and changing at a pace that requires continual adaptation.

cOngrats tO the Ducks fOr accOmplishing sOmething Older than the US cOmmercial airline industry!

 

[WorldTraveler]

Mergers and acquisitions are tough, it takes a long time. And I'm not trying to be condescending here, I hope that DL does right by using the chance they were given (to remain union-free) to build trust between itself and employees.
Anyway, Kev, good luck!

I agree with the part I have quoted. But let's be honest. The majority of DL employees do trust mgmt - that can be seen in the results of the representation elections.
It is also true that regardless of whether DL people trust DL mgmt or not, the company is running very well on many levels and continues to correct the areas that need to be corrected. And because DL is doing well, its people CAN share in its success.
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This isn't about blind trust in anyone or any company. It is in understanding that the free enterprise system works when the interests of workers, management, investors, and their customers are aligned and for now DL is doing a very good job of aligning all of those interests - to the benefit of ALL.
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I get that this is the largest merger up to the time that it occurred... but DL is made up of a number of mergers and asset acquisitions - and there is every evidence to show that DL used each merger to go about doing what it intended to do from a business standpoint. Employees have benefitted to the greatest degree possible and have shared the pain where it has been necessary to do so - but it remains that DL's employees have understood basic principles of business success that other people just don't seem to get.
The notion that DL or its employees are going to change a formula that has worked and continues to work is not grounded in reality... and it has nothing to do with blind trust anyone has in the other. It is good business sense. It is also just plain good sense.
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And yes, I wish the best to Kev and every other DL employee. And for that matter, every airline employee.
Why would anyone not want the best for everyone?