More Jobs Cut in MSP

[FWAAA]

Here's an article that claims that DL will have to repay about $175 million in government-backed loans early next year:

http://finance.yahoo.com/news/Delta-to-pay-off-175M-in-apf-1210361331.html?x=0&.v=4

 

[Mr Red]

Another shoe drops.

DL is closing the A330 crew base in MSP, and opening a A330 crew base in ATL.

DL is indeed selling the former Delta Technologies property in ATL. If they're also selling a data center, it is probably because like every other company with a data center, computer equipment is about a third of the footprint, if not less, than what it was ten years ago. With more and more hosted services being available, they no longer need to own a dedicated/secured facility if they can lease it from a commercial provider who has current generation power/environmentals. My own employer is considering the same option for a new site, even though we operate in owned facilities today. But lets not overlook that network engineers and data center operators aren't put out of work when a facility moves -- they just start looking at a different set of IP addresses.

It doesn't take a rocket scientist to figure out that ATL will win out over other locations. But I'm not the one who made assurances to the state that there wouldn't be a huge impact to people in MN as a result of the merger. AA made the same mistakes with dealing with MO, and I really expect the same to happen with UACO as more and more "synergies" drift towards business friendly and low cost of living TX vs high taxation/high cost of living IL... Promises made are easily broken. All you have to do is say "the world has changed"...

Theres a reason they call Texas the Bake Box,So hot u don't even go outside unless u have to !They can"t seem to build TOLL roads fast enough,got foreign company's running them to !

oh ya its great here !!

 

[WorldTraveler]

Thanks... apparently DL is wanting out of the job commitments... I'm sure they costed it out but if it is simply a matter of paying the debt now in order to get out of the commitment to the state but the debt would have to be paid eventually, then it probably makes financial sense... and it gives DL the operational flexibility to put the number of jobs that are necessary for the MSP hub and associated support facilities.
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It also doesn't prevent DL from adding other jobs in MSP should that become worthwhile to do in the future.

 

[eolesen]

I really expect the same to happen with UACO as more and more "synergies" drift towards business friendly and low cost of living TX vs high taxation/high cost of living IL..

Crain's Business reported yesterday that UA is now going from 9 floors at Sears Tower to 12 floors, and 2500 employees to 3800. Some of those were already planned to move from the old Elk Grove EXO building, but now it looks like they're emptying that out entirely. Not sure if that's a net add or loss.

 

[Kev3188]

Not sure if that's a net add or loss.

Probably depends on what part of the CHI metro area you live in.

 

[2BlacknBlue]

Probably depends on what part of the CHI metro area you live in.

Kev,
I guess you get what you pay for: Industry average performance for industry average wages.

http://www.jdpower.com/travel/ratings/airline-ratings/traditional/

 

[eolesen]

Probably depends on what part of the CHI metro area you live in.

So very true. There are lots of people who bought homes in the NW suburbs based on the location of EXO, and saw their 25 minute commute go to 90 minutes. Free parking at EXO was replaced by paid parking in the city ($15+ daily in the Loop) or at a train station (~$2 daily) plus $150-270/month for a train ticket... Our offices were a few blocks from EXO, and the commute to the city cost me an added $50/week not including the higher cost of lunch in the Loop.

As such, the move from Elk Grove will wind up causing a few people to jump. I know of one guy in his 40's looking to do it because the commute times are seriously reducing time with the kids. Working until 5pm means getting home at 7pm, and that tends to screw up family time prety well, admittedly nowhere near as much as it does for someone commuting between MSP and ATL or IAH and CHI, but enough that my waking time with the kids was about 90 minutes a day, and that included the drive to school in the morning...

 

[topDawg]

I'm not entirely sure what is being repayed but I believe it is the outstanding lease on the buildings that are being vacated, not the obligations DL has to the state of MN to keep jobs in the state.
If the obligations to the state remain (and I believe they amount to about $250 milliion), then DL is not free to reduce its employment below the levels specified in the agreements.
I also don't think those agreements specified what jobs DL has to maintain in MSP... they may well be moving other jobs into MN or were in surplus of the number of jobs specified by the agreement.
If someone has information that DL's moves violate the terms of the employment agreement with the state of MN, I'd like to see an article saying so.
I also don't think DL is in a position to repay the agreement (if it is still $250M or more)...
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the fact that MN has a written agreement involving money probably says that they will succeed at keeping whatever jobs are specified - or get the money specified in the contract - or agree to a renegotiation.
The state of Ohio and CLE I believe specified financial guarantees from UA - because mergers have indeed resulted in a lot of broken promises - and taxpayers aren't interested in footing the bill for the success of mergers.
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If there are details that clarify where DL stands in relation to the agreements w/ MN, I'd like to see them.

My understanding is the only agreements that DL will have is the main lease agreement with the MAC. They are paying 175M on the bonds and they will only have to keep X number of flights. I think that they *could* close the res center and building J if they wanted to now.

 

[topDawg]

If it is so business critical to close MSP training, why is SLC FA training remaining in place?...

Taking MRO out of MSP isn't just impacting managers. It kills off that 3P work and the AMT jobs attached to it. It also eliminates two B747 docks if Hgr 5/6 go away.

DL offering the open enrollment isn't any different from what would be offered at any other company. I saw no less than 11 rounds of staffing reductions between 1992 and 2006 for both management and non-management and most involved terms similar for people with 10 years. And it is quite clear that targeting a more senior workforce makes it unlikely that people will make the move.

Fact is that DL made commitments to the state and the employees when the merger went forward.

I know, they're just being flexible and doing what any corporation would do... But it doesn't change the perception that burying every last reminder of Eagan is still an objective.

Delta isn't pulling any MRO work from MSP. Only the Engineers are moving. Heck MSP just got the 145 cert.

Oh and FWIW Delta has changed its mind and will keep hangar 5/6 and dump 1 and 2. (and it was said a big reason was due to 5 and 6 being bigger and better for MRO work)

PS which hangars are 1 and 2? i have yet to make the trip to MSP. Heck the last time i was there NW had a big complex over by the terminal, now i think they only have like two bays on that side now.

 

[WorldTraveler]

the hangars aren't marked, but you might find Google Earth helpful....
BTW, the current Google Earth pics might be "keepers"... you can practically summarize the fleet repaint status from the pics.
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And, yes, the expectation is that DL will EXPAND its MRO work in MSP.....
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As expected and spoken about from the earliest days of the merger, there will be continued movement of the PMNW and PMDL fleets with corresponding movements of crews. Maintenance support for the type of aircraft that remain in MSP will likely be expanded.
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Someone help me but is Sun Country a DL Tech Ops customer?

 

[Kev3188]

Someone help me but is Sun Country a DL Tech Ops customer?

Yes.

 

[eolesen]

It's official... DL has now paid off the State of Minnesota, earlier than planned, due to their superior financial condition.

http://www.bizjournals.com/twincities/news/2011/10/24/delta-air-lines-loan-mac-loeffeholz.html

Under the loan requirements, Delta had to employe at least 10,000 people in Minnesota as long as the carrier owed the money. That included keeping a flight simulator operation in Eagan.

Delta said in June it was moving the flight simulator to Atlanta. That put it in violation of the loan agreement, triggering the repayment. And with the repayment, Delta no longer will be obligated to keep any employees in Minnesota.

Just guessing, but it is probably now just a matter of time before Hibbing goes away. They're already pulling the flights, so might as well take away any potential complaints over no longer being able to non-rev...

[Cue a four page thesis about how this is just vitrol over how much trouble AA is in...]

 

[Kev3188]

On a related note, the last day for most all Mesaba HQ employees in Eagan will be 12/26.

Classy...

 

[WorldTraveler]

On a related note, the last day for most all Mesaba HQ employees in Eagan will be 12/26.

Classy...

who at Mesaba or its owner Pinnacle made THAT decision?
lump of coal in someone's stocking.

E,
perhaps you missed the conference call where it was noted that the MN bonds are/were private/callable/higher interest bonds... as you should know, not all bonds can be redeemed early and of what you can redeem, you generally go for the higher interest rate stuff.
but then, DL is retiring debt at the same interest rate are getting today to take on new debt.
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Yes, making money provides flexibility to run the business as it makes sense.
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and they also said that there are no plans for any reductions in MN... .be sure and let us know if that turns out not to be the case.

 

[2BlacknBlue]

The majority of those folks in MSP still have contracts in place. They are going to tread softly until the finalization of the NMB union outcome debacles. Until then, they will eliminate admin (merit) jobs.

2BnB