January 18, 2007
Dear Fellow Pilot,
As the tension mounts and the rhetoric escalates, I want to update you on your MEC's efforts concerning the US Airways hostile takeover attempt of Delta Air Lines.
Next week in Washington, D.C., the Senate Committee on Commerce, Science and Transportation will hold hearings on the US Airways proposal. As described in MEC Alert 07-02, the witness list includes views representing the two corporations, the government, the consumer and the financial community. Absent from that list is the voice of the group that stands to lose the most-airline labor. We will continue to work to ensure that the voice of labor is included.
Today, the Delta pilots' fight will escalate. In Phoenix and Charlotte, mobile billboards have been dispatched to expand our audience. In Washington, D.C., we continue to press our legislative effort and will aggressively pursue every opportunity to squelch Parker's plan. Other events will unfold in the very near future.
Since November 15, we have held that this merger proposal is bad for consumers, bad for employees, and bad for the communities we serve. But there is a small group of financiers that stand to profit should this merger move forward. In fact, much of the support in seeing this proposal take place lies within the hedge fund community. Hedge funds focus on short term financial gain and thrive on market volatility other investors shun. It is interesting to note that roughly 50 percent of US Airways' outstanding shares are owned by hedge funds with no long-term interest in the success of either US Airways or Delta. In addition, you may have heard of moves by an unofficial ad hoc committee of Delta's creditors who are supporting Parker's efforts. These creditors consist largely of hedge funds and financial institutions with no long-term interest in seeing either Delta or US Airways succeed. They are in it simply for the short-term gain. As this letter is being distributed, the Delta MEC is conducting informational picketing targeting financiers in New York City, specifically those who have a very small overall claim but have been very vocal in their support for Parker. The message will be clear-massive labor unrest is just one of the many difficult issues US Airways executives will face should they continue their hostile takeover attempt of Delta Air Lines.
Delta management remains committed to exiting bankruptcy as a stand alone airline and the Delta MEC shares that commitment. However, the Delta MEC recognizes that industry consolidation is not only likely, but probable and perhaps even inevitable. With that in mind:
We support a free market and rational industry consolidation, but given the unique qualities of our nation's aviation industry, it is crucial that certain segments of Wall Street not be allowed to drive public policy.
The US Airways hostile takeover proposal is the wrong deal at the wrong time. A widely diverse group of industry analysts, corporate, labor and government leaders all agree that of all possible merger scenarios, US Airways and Delta is the single worst possible combination fraught with antitrust concerns, fleet incompatibility, labor unrest, extreme debt and a host of other issues that would put significant stress on both the short and long-term prospects of the combined carrier.
In the future, there may be merger opportunities that make sense. If faced with the possibility, the Delta pilots are interested in participating in the "right" consolidation effort, a consensual merger with a rational mix of routes, employees and resources, and of the absence of antitrust and other issues that burden the current proposal. The "right" merger opportunity could draw our support and result in a successful merger.
Contrast the merger of Delta and Western with Lorenzo and Texas Air Corporation's (TAC) hostile takeover of Eastern, both in 1986. The Delta/Western consensual merger is widely viewed as one of the most successful mergers in corporate history. Parker's proposal much more closely resembles the latter. In that instance, TAC's Continental declared bankruptcy for the second time in less than a decade and a year later, Eastern liquidated. Lorenzo, a former Wall Street darling (like Parker), was eventually banned from the industry and remains an indelible stain on the history of American aviation.
In the coming days and weeks, activity on all fronts will be fast and furious. You may be asked to participate in an activity on very short notice. If that occurs, make that tasking a top priority. Our battle against Parker and his merger and acquisition profiteers must succeed.
Fraternally,
Lee Moak, Chairman
Delta MEC
Dear Fellow Pilot,
As the tension mounts and the rhetoric escalates, I want to update you on your MEC's efforts concerning the US Airways hostile takeover attempt of Delta Air Lines.
Next week in Washington, D.C., the Senate Committee on Commerce, Science and Transportation will hold hearings on the US Airways proposal. As described in MEC Alert 07-02, the witness list includes views representing the two corporations, the government, the consumer and the financial community. Absent from that list is the voice of the group that stands to lose the most-airline labor. We will continue to work to ensure that the voice of labor is included.
Today, the Delta pilots' fight will escalate. In Phoenix and Charlotte, mobile billboards have been dispatched to expand our audience. In Washington, D.C., we continue to press our legislative effort and will aggressively pursue every opportunity to squelch Parker's plan. Other events will unfold in the very near future.
Since November 15, we have held that this merger proposal is bad for consumers, bad for employees, and bad for the communities we serve. But there is a small group of financiers that stand to profit should this merger move forward. In fact, much of the support in seeing this proposal take place lies within the hedge fund community. Hedge funds focus on short term financial gain and thrive on market volatility other investors shun. It is interesting to note that roughly 50 percent of US Airways' outstanding shares are owned by hedge funds with no long-term interest in the success of either US Airways or Delta. In addition, you may have heard of moves by an unofficial ad hoc committee of Delta's creditors who are supporting Parker's efforts. These creditors consist largely of hedge funds and financial institutions with no long-term interest in seeing either Delta or US Airways succeed. They are in it simply for the short-term gain. As this letter is being distributed, the Delta MEC is conducting informational picketing targeting financiers in New York City, specifically those who have a very small overall claim but have been very vocal in their support for Parker. The message will be clear-massive labor unrest is just one of the many difficult issues US Airways executives will face should they continue their hostile takeover attempt of Delta Air Lines.
Delta management remains committed to exiting bankruptcy as a stand alone airline and the Delta MEC shares that commitment. However, the Delta MEC recognizes that industry consolidation is not only likely, but probable and perhaps even inevitable. With that in mind:
We support a free market and rational industry consolidation, but given the unique qualities of our nation's aviation industry, it is crucial that certain segments of Wall Street not be allowed to drive public policy.
The US Airways hostile takeover proposal is the wrong deal at the wrong time. A widely diverse group of industry analysts, corporate, labor and government leaders all agree that of all possible merger scenarios, US Airways and Delta is the single worst possible combination fraught with antitrust concerns, fleet incompatibility, labor unrest, extreme debt and a host of other issues that would put significant stress on both the short and long-term prospects of the combined carrier.
In the future, there may be merger opportunities that make sense. If faced with the possibility, the Delta pilots are interested in participating in the "right" consolidation effort, a consensual merger with a rational mix of routes, employees and resources, and of the absence of antitrust and other issues that burden the current proposal. The "right" merger opportunity could draw our support and result in a successful merger.
Contrast the merger of Delta and Western with Lorenzo and Texas Air Corporation's (TAC) hostile takeover of Eastern, both in 1986. The Delta/Western consensual merger is widely viewed as one of the most successful mergers in corporate history. Parker's proposal much more closely resembles the latter. In that instance, TAC's Continental declared bankruptcy for the second time in less than a decade and a year later, Eastern liquidated. Lorenzo, a former Wall Street darling (like Parker), was eventually banned from the industry and remains an indelible stain on the history of American aviation.
In the coming days and weeks, activity on all fronts will be fast and furious. You may be asked to participate in an activity on very short notice. If that occurs, make that tasking a top priority. Our battle against Parker and his merger and acquisition profiteers must succeed.
Fraternally,
Lee Moak, Chairman
Delta MEC
