"...avoid Bankruptcy At All Costs"

WorldTraveler

Corn Field
Dec 5, 2003
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Here is the text of an open letter sent to the pilots of Delta from an ex-EA pilot which I obtained. The uncertain situation at UA and US could not be any clearer regarding the risk DL pilots would take by not working with the company.

July 11, 2004
To: The Pilots of Delta Air Lines
From: Captain Robert G. Fuhrman
Airline Pilots Association: Inactive Member in Good Standing
International Association of Machinists: Inactive Member in Good Standing
Teamsters Union: Active Member in Good Standing

I am a Captain for a major cargo airline and a former pilot for Eastern Airlines. Through my personal experience, I have first hand knowledge with the bankruptcy process. During my career, I have watched Eastern, Discovery Airlines (Hawaii), and Midway Airlines file for bankruptcy protection under Chapter 11. None of these carriers were able to successfully re-organize under Chapter 11 Bankruptcy protection. In my career, I have started as a new hire at the bottom of the seniority list, on probation four times. When Eastern failed, my wife, and I were the parents of two young boys ages 6 and 5. To provide income and medical insurance for my family, I had no choice but to accept my circumstances, commute to wherever the work was and experience the separation
from my family for long periods of time. From the time Eastern failed until I was able to hold a line at my current airline was seven years.

During this time of reestablishing my aviation career I was a very active ALPA member fighting for our Eastern Airlines careers. I testified in the Department of Transportation competency hearings concerning Frank Lorenzo. Congressman Mac Collins took me to the White House to bring this matter before President Clinton. I have personal letters from Presidents George Bush and Bill Clinton concerning the plight of the families of Eastern Airlines. I have five three-inch notebooks full of letters from Congressmen and Senators; two letters in particular from Senator John McCain and Senator John Kerry are worth mentioning. In a letter to me dated April 11, 1997, Senator John McCain from Arizona, the Chairman of the Senate Commerce, Science and Transportation Committee, says “Nevertheless, if
there is some type of legislation proposal that addresses your concerns, I would gladly consider itâ€. On July 14, 1997, by Providence, I personally met Senator McCain in the halls of the Russell Senate Office Building. When I mentioned to Senator McCain that my issue was Eastern Airlines he looked at me and said abruptly, “That’s over my friend.â€

The letter from Senator John Kerry of Massachusetts dated October 28, 1996 is to the then Chairman of the Senate Science, and Transportation Committee, Senator Larry Pressler. Senator Kerry requests that hearings before this committee be scheduled “in order to address the grievance he and the families of Eastern Airlines have concerning the bankruptcy proceedings of the company.†As of this date, July 11, 2004, the Senate Commerce, Science, and Transportation Committee has not addressed the Eastern Airlines grievance.
The purpose of the Chapter 11 Bankruptcy Court is to allow an entity to restructure debt that has become unmanageable. Should a restructuring of the debt not be possible, then the entity will be liquidated in an attempt to repay creditors. Such was the case at Eastern, Midway, and Discovery.

Over the years numerous airlines have entered bankruptcy. Continental, and America West, are the only major airlines to emerge from Chapter 11 Bankruptcy Protection to become moderately successful. (Continental went into Chapter 11 Bankruptcy twice.) I have heard comments from Delta pilots saying “I’ll take my chances in bankruptcyâ€. From my experience, I would suggest that the Delta Pilot Group not to gamble your careers and the future of your families by journeying down the Bankruptcy Road. When you consider bankruptcy, just think of the term “The Debtor in Possessionâ€. In the Old Days, when a company was placed under bankruptcy protection the management of that company was immediately replaced with a Trustee. Today, the present management is kept in place and is given the title of “The Debtor in Possessionâ€. A Bankruptcy Judge is not a Tenured Federal Judge. A Bankruptcy Judge is appointed by the Executive Branch and serves a specified term in this position and he can do anything he deems necessary for the good of the Debtor in Possession.

You may ask “What about Section 1113 of the bankruptcy code?†Section 1113 allows a company two modify or reject a collective bargaining agreement under certain circumstances. I can tell you from my experience with Eastern Airlines; the non-tenured Bankruptcy Judge will do anything he deems necessary for the Debtor in Possession while you fight his decision for months and years in the Federal Court System.

In the fall of 1989 we continued our struggle against Continental Holdings Company and through the years we have won the majority of the court decisions. This has been accomplished through our own organization, the Eastern Pilots Merger Committee. 300 to 350 Eastern Pilots paying $50.00 per month to continue our legal struggle for these past 15 plus years. As Professional Airline Pilots, the Pilots of Eastern Airlines won a very significant struggle in the history of the American Labor Movement! Frank Lorenzo was deemed incompetent and removed from the American airline industry by the Department of Transportation. Today, 15 years after our fight began; there is a legal process to obtain an arbitrator to integrate Pilots of Eastern Airlines into the seniority list at Continental Airlines. (note that although there has been a ruling that an arbitrator be appointed,
Continental is challenging this in court. And so continues the never ending merry-goround ride. The pilot’s win a court decision, Continental challenges it, and so it goes, year after year after year).

Just as you have the ability to avoid a line of thunderstorms by planning conservatively, so you too can avoid bankruptcy by conservative planning. However, just as delaying the avoidance of thunderstorms for too long can take the situation out of your control, this also can be the situation when waiting too long to act to avoid bankruptcy. When Delta’s creditors start to demand cash for services, things may spiral out of control so rapidly that no corrective action will avoid Chapter 11. The bankruptcy court is stacked against you. But, if you choose to fly into this adverse weather you can fight the bankruptcy system with time, money and your careers. You will most certainly win many of the battles but you will most likely lose the war.

You absolutely must maintain your focus on your family and your career. Your goal is not to have a strong ALPA, not to take a strong stand, and not to make a statement. Your goal, for each of you individually, is to assure the best career for your families future. This is an absolute, and it must be undertaken within the context of today’s airline environment. If you as members of the Airline Pilots Association disagree with the present course of your MEC let your voices be heard. Replacement of your MEC is in your control as the membership of this body politic.
I assure you that the emotional sentiments that emanate from LEC meetings, MEC
meetings, and on your forum will ring very hollow if Delta files for Bankruptcy
Protection. Your young sons and daughters look to you for their security. If you awaken to headlines that say “Delta Files Bankruptcy and your children ask you “daddy, what’s going to happen,†you will wish from the depths of your soul, as I experienced, that you had done everything in your power to help Delta avoid bankruptcy. Bankruptcy is truly an emotional Black Hole!

I urge you, as members of the Delta Pilot Group to exhort your ALPA MEC to work with Delta’s management to avoid Chapter 11 Bankruptcy Protection at all costs.†Do what needs to be done at this time to help Delta Air Lines achieve a successful and proserous future.

Above all, Take Care of Your Families!!!
Respectfully,
Captain Robert G. Fuhrman
July 4, 2004
 
The DL Pilots already made a concessions offer. They offered to give 9% and give up their 4.5% raise that went effect I believe May 1, 2004. Grinchstein said no, they wanted 30% and nothing less. Now he is going for the whole pie and trying to take $1 Billion (50%) of their contract. It's all about corporate greed! Just look at the former CEO of US Airways David Siegel, he got US out of BK and got them back to the point to possibly file again. He resigns after 2 years and gets a $5 Million dollar payout. DL has other options to cut costs, they just need to take a look at the whole picture. Song was a big mistake and it's failing as we speak. How much did it cost DL to paint those 757's and redo all the interiors? How much did they give former CEO Leo Mullin when he departed? They're talking about giving new uniforms again to front line employees and using a top designer! :down:
 
Although I don't work for Delta I think it is clear that something more needs to be done by the pilots. Frankly they got "lucky" in the timing of their settlement, just as the good times were coming to an end and before 9/11 by a few months. As a result they got big raises while the airlines whose balance sheets were more stretched had to react right away. Well, now its Deltas turn--the company has over $20 billion of debt and capitalized leases. Somethings gotta give. I think they report June 3 moths earnings this coming week, and if their cash position is down from March (seasonally it should be up) then the filing, in my opinion, will happen this year. Grinstein (remember he just came in after it had hit the fan) has said I think wisely, that he prefers to go bankrupt with more cash rather than less and so won't let it drag out all year. If cash is down, things will happen pretty fast, imho.
 
Whadyano,
I believe you are right and I believe the filing will come this fall rather than in the winter when many analysts expect if the pilots don't agree to make significant cuts. The industry is not recovering; Southwest's earnings report indicates that things could be worse than expected for several carriers. Delta has made alot of noise about the strategic review and set the expectation that significant things will change. The pilots approval of the strategic review will go a long way to determining their willingness to cooperate w/ the company.
With all due respect to the good folks at UA and US that are suffering through bankruptcy, neither carrier has done much to dramatically change the structure of their company. It makes no sense to develop a grand new plan and then be bleeding cash just when money is needed to finance the programs needed to turn the company around; sadly, US is doing some of the network things they should be doing but have no cash and have alienated employees so have a poor chance of succeeding.
Mr. Grinstein has staked his reputation on turning Delta around and he does have a reputation for doing that at Western; if he fails to deliver, Delta could well be history. Given that Delta has a long reputation for being a well-managed company, I tend to believe they will deliver and turn the company around.
 
MCI,
you are correct...but it is certainly correct to say that US is suffering. And you are certainly not interrupting.
 
Whadayano said:
Although I don't work for Delta I think it is clear that something more needs to be done by the pilots. Frankly they got "lucky" in the timing of their settlement, just as the good times were coming to an end and before 9/11 by a few months. As a result they got big raises while the airlines whose balance sheets were more stretched had to react right away. Well, now its Deltas turn--the company has over $20 billion of debt and capitalized leases. Somethings gotta give. I think they report June 3 moths earnings this coming week, and if their cash position is down from March (seasonally it should be up) then the filing, in my opinion, will happen this year. Grinstein (remember he just came in after it had hit the fan) has said I think wisely, that he prefers to go bankrupt with more cash rather than less and so won't let it drag out all year. If cash is down, things will happen pretty fast, imho.
The pilots have offered plenty to Delta. I believe 13.5% is to much to give back. Delta has shot themselves in the foot on this one. They should never have started Song, never should have brought up the idea on new uniforms and should have given less to Leo when he showed himself the door.

The Grinch is crying wolf and the pilots know it! Complain you need more money or you will file for bankruptcy protection and then announce you want to get new uniforms for all customer contact positions. Besides the Grinch is only a temporary CEO until 12/31/04 and Delta will be hunting for someone new.
 
LiveInAHotel said:
I believe 13.5% is to much to give back.
I believe it's not enough. DL is paying about 25% more than their legacy competitors. That's the proper amount to expect to be cut.
 
mweiss said:
I believe it's not enough. DL is paying about 25% more than their legacy competitors. That's the proper amount to expect to be cut.
I believe 13.5% was enough. The major carriers AA, DL, UA, NW and CO are not low-cost carriers. We should not be paid like them either. If they want to pay us like them then we should be one. Let us wear shorts, polo's, tennis shoes and hats to work. The executives are trying to rake all of us and screw us hard, while they enjoy the finer things in life like:

1. A paycheck they can live on
2. Being able to raise their kids
3. Being able to pay their mortgage
4. Being able to put food on their tables
5. Being able to pay their bills
6. Being able to put money aside for their retirement and futures

While they enjoy this, we the employee have to suffer and bust are a**es to make ends meat. It needs to stop here and I hope the DL pilots show us the way and keep the standard high!
 
Live-

"a paycheck they can live on"...are you honestly telling people on this board that any pilot at Delta doesn't have one of those? Are you about to say that they couldn't under the terms Jerry has set. Let's be realistic for just a minute...under the terms jerry has set, they would still make far more than the avg. Delta employee. As for your comments re: Song...prove it! If it was a bad idea, prove it! As for uniforms...there's actuly little to nothing being spent on them. Uniforms will be replaced over time. Get your fact straigt and stop your whinning about things you don't know and understand.
 
flyhigh said:
Live-

"a paycheck they can live on"...are you honestly telling people on this board that any pilot at Delta doesn't have one of those? Are you about to say that they couldn't under the terms Jerry has set. Let's be realistic for just a minute...under the terms jerry has set, they would still make far more than the avg. Delta employee.
Fly,

Are you aware of the fact that if I took Jerry's proposed cut, I would make less as a pilot for Delta than an RJ captain at ASA and Comair? As far as making more than the average employee, we should. Our job requires more training and education than most jobs at Delta.
 
Delta's pilot contract is simply not competitive right now. Someone else in this thread got it right - Delta pilots lucked out on the timing. Early in 2001, the outlook was still good for the legacy carriers, and United, Delta, and American were ready to play a game of one-upsmanship on pilot contracts. United set the bar, Delta then set it slightly higher, and American had an offer on the table that was even higher just before 9/11 which the pilots turned down, if I remember correctly, because American wanted baseball-style arbitration on work-rule issues. Three years later, United pilots have made big concessions and are in bankruptcy, American pilots have made big concessions while teetering on the brink of bankruptcy, and Delta pilots are next. Delta pilot pay rates are a good 20% to 25% higher than the next highest (Northwest), and as much as 60% to 70% higher than American, United, and USAir. That is simply not sustainable in any circumstances. Delta management knows it, and Delta ALPA knows it, too.
 
LiveInAHotel said:
I believe 13.5% was enough. The major carriers AA, DL, UA, NW and CO are not low-cost carriers. We should not be paid like them either. If they want to pay us like them then we should be one. Let us wear shorts, polo's, tennis shoes and hats to work. [snip]
Thing is, CO, NW, UA, AA, are not DL's competitors anymore. They are AirTran, Southwest, and jetBlue. Just being as good as other buggy whip manufacturers won't help Delta survive.
 
Luv-

Are you a captain? If not, then don't compare yourself to one? In addition, so what? Is your job that much different??? Are you truly doing something so different that it warrant s a huge premium? Lastly, nobosy cares about the higher level of education/training you may or may not have...the customer certainly doesn't.
 
LiveInAHotel said:
I believe 13.5% was enough. The major carriers AA, DL, UA, NW and CO are not low-cost carriers. We should not be paid like them either. If they want to pay us like them then we should be one. Let us wear shorts, polo's, tennis shoes and hats to work. The executives are trying to rake all of us and screw us hard, while they enjoy the finer things in life like:

1. A paycheck they can live on
2. Being able to raise their kids
3. Being able to pay their mortgage
4. Being able to put food on their tables
5. Being able to pay their bills
6. Being able to put money aside for their retirement and futures

While they enjoy this, we the employee have to suffer and bust are a**es to make ends meat. It needs to stop here and I hope the DL pilots show us the way and keep the standard high!



This is laughable, how can you write this without getting a hernia from laughing


Delta pilots make $300/hr and work 80 hours a month. There are many who work that amount of hours in a week. Are pilots having a difficult time putting food on the tables? They are making over $100 per hour more than American Airlines, should those AA pilots be applying for food stamps? There is no question the pilots at Comair and the other RJ's deserve their pay, but what is most appauling is that Delta pilots are making their hefty pay increases at the expense of their lower paid union brethren.

So you can tell us that your selfish and that you don't want to give any money back even though Delta just reported a $2 billion quarterly loss (one time charge was most of it) and you make $100 more than any other pilot in the industry we will believe you. But you can't give us the laughable argument above.