This is why a DAL merger won't happen.

pilot

Veteran
Jan 2, 2006
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From the DAL ALPA Chairman:

January 11, 2007




Dear Fellow Pilot,

As merger news and rumors continue to circulate, I want to take this opportunity to provide you with an update on activities surrounding the US Airways' hostile takeover attempt. On November 21, 2006, I wrote:

"I want to assure you that your union is reviewing this hostile takeover attempt in terms of what it could mean to the long-term best interests of the Delta pilots . . . Should this merger be as misguided and as poor an idea as I currently believe it to be, then I will deploy every available resource to stop it."


In very short order, it became abundantly clear that the proposed merger was flawed in many aspects and, overall, a bad idea-bad for our passengers, bad for the communities we serve, and bad for employees. Further, Parker's plan is simply not credible, and with each passing day the credibility of that plan fades further. Two weeks ago, Parker definitively stated that he had no intention of increasing his offer. Yesterday, he increased his offer, while at the same time reaffirming his "plan" for no "frontline" employee furloughs. But on the same day, Parker's number two man was openly discussing additional divestitures beyond those originally disclosed to quell antitrust concerns that US Airways claims don't exist in the first place. With divestitures come job losses. Make no mistake-Parker's plan will result in thousands of job losses regardless of Parker's empty promises.

As most of you know by now, yesterday US Airways announced that they would increase their offer while also stating that the "offer is set to expire on Feb. 1, 2007 unless there is affirmative creditor support for commencement of due diligence . . . as well as the postponement of Delta's hearing on its Disclosure Statement scheduled for Feb. 7, 2007." The offer would increase the debt of the combined corporation by an additional one billion dollars, a move that is already drawing concern from industry analysts. Further, none of the major faults in the original plan were addressed including antitrust concerns, massive route overlap, actual job losses and, importantly, the provisions of the Delta Pilot Working Agreement (PWA).


Parker mistakenly believes that he can somehow magically overcome the scope protections built into our contract and to date refuses to discuss the contract in anything other than superficial terms. The Delta PWA is a part of Delta's Plan of Reorganization and must be a part of any such plan of reorganization. Parker, however, simply ignores the implications of our contract. For example, in response to just a single issue, he has been quoted as saying, "We don't know enough about the contract and how this clause came to be." Pilot contract issues will not go away regardless of how much money Parker throws at this merger. For example, our contract:




o Prohibits a "code-sharing" relationship between Delta and US Airways that is critical to the success of the merger plan.

o Dictates that, in the event of a merger, our contract is the controlling document and all provisions remain in force, provisions which prevent many planned US Airways synergies.

o Provides that the amount of Delta flying cannot decrease during a merger transition period until full operational integration, a period that would take years.

o States that Delta pilots must fly any aircraft configured for over 76 seats. US Airways would be prohibited from operating an entire portion of their fleet of aircraft as a result of this provision.

o Most importantly, the Delta pilot contract is binding on any successor or affiliate, including a transaction where Delta is bought by another carrier or holding company subject to the provisions of Letter of Agreement 7, Bankruptcy Protection Covenant.



The Delta pilots will not change any provision of our contract in order to facilitate the hostile takeover of our company.


I want to caution you about the many press reports you will read and see in the coming days and weeks regarding both the US Airways' hostile merger attempt and any other industry merger activity. I want to make this perfectly clear. Delta remains committed to emerging from bankruptcy as a stand alone airline, and the Delta MEC shares that commitment. Nothing will distract us from the task at hand.


Parker's hostile takeover attempt represents a clear and present danger to the careers of all Delta employees. As such, the MEC remains totally committed and one hundred percent focused on one thing-the death of the US Airways' merger attempt. To that end, at this week's MEC meeting in Washington D.C. , the MEC unanimously passed a resolution committing $15 million dollars to the effort to ensure that Parker fails. Additionally, for the next several weeks, a substantial portion of all MEC operations will shift to Washington as we concentrate our efforts on Capitol Hill and the financial markets. Parker will soon come to realize that we cannot be ignored, that we are not going away, and that the Delta pilots will not be "synergized."




Fraternally,



Lee Moak, Chairman

Delta MEC
 
Can the BK judge or the company "void" exsisting labor contracts and impose their own? Been down that road before, and it isnt a pretty journey.
 
While DL certainly could attempt to make further changes in their pilot agreement during BK, the already amended contract has been approved by the judge. So without the pilot's agreement, further changes are unlikely.

Jim
 
Well, as a westie that does NOT want to see this merger go through, I can only hope that the Delta pilot contract can prevent this from happening. However, in this day in age, I really do not see contracts as all that powerful, especially with Delta being in BK.

Now, give me a merger with UA or NW ANY day! However, I truly believe this management team needs to try and actually run the airline they have instead of running us into the ground. We need better interiors, better inflight products, better wages, better equipment and tools, etc.
 
I would imagine that if needed, any contract can be altered while the company is still in BK. The overall happiness of the workforce has never been a deciding factor before. :huh: As we all know, the US pilot group gave some hefty concessions with the "understanding" that their pensions would be left alone. I very well remember what their feelings were once the company proceeded to mess with their pensions as the ink was just about dry on their contract. As much as it sucks, they can and will do whatever they please while under the protection of the BK court.
 
What you have to remember is that the US pilot contract was further modified during both BK's with the agreement of the MEC, not thru the BK process.

That certainly doesn't mean that the DL pilots contract would be impossible to modify without their consent, however. Doing so would just risk job action by the DL pilots since those changes would then be imposed instead of negotiated.

Jim
 
The part you all seem to be overlooking is just who would be going to the BK court to ask for modification of the pilot contract? Certainly not DL management since they do not approve of the merger, and the pilot contract is just another shield for them. And, AFAIK, LCC has no standing in the BK court as even a creditor of DL.

At LCC (and all the other BKs where union contracts got modified by the court), the company management either planned to, threatened to, or did approach the court to modify the contract due to an intransigent union. That ain't the case here.
 
The part you all seem to be overlooking is just who would be going to the BK court to ask for modification of the pilot contract?
I certainly understand you point, Jim, and agree with it as long as DL management remains on the stand-alone path.

At least my remarks, however, were based on the situation where DL management agreed to the merger (either willingly or under pressure from the creditors). At least in theory, US management might be calling the shots with DL management only doing as instructed.

Something similiar happened in the last US BK. US management negotiated a profit sharing formula which was unilaterally changed in the POR, supposedly because of pressure from the investors. So while US management had agreed to one thing, they imposed something else under outside direction.

Jim
 
The point you all seem to be missing is that the DAL pilot group has balls.

320 and his minions, the 57% majority, here at U do not.

And that simple fact will prevent this merger from happening. You all are underestimating the power ANY pilot group has. So long as it has the collective will to use it.

The DAL pilot group has that will. The U group did not. And to this day does not.

pilot
 
They were able to change the profit sharing as it was written into the CBAs that the BOD had to approve any profit sharing plan and was able to modify it.

DL can go back and ask the pilots to open negotiations under section 1113 C and the pilots would be obligated. If no agreement was reached they could with court approval abrogate and impose new terms.
 
They were able to change the profit sharing as it was written into the CBAs that the BOD had to approve any profit sharing plan and was able to modify it.

DL can go back and ask the pilots to open negotiations under section 1113 C and the pilots would be obligated. If no agreement was reached they could with court approval abrogate and impose new terms.

The Delta Pilots working agreement has already gone thru the section 1113 process and is affirmined in the court. If Parker wins control of DL thru the hostile takeover attempt he would have to ask the same judge to open 1113 AGAIN to make changes. There is no precedent for this, so if the judge allows a second 1113 look for the Delta pilots to file a lawsuit out of the court. Either way this would add 3-4 months EXTRA to any stay in BK. Remember that the creditors will not see a dime until DL is out of court.
 
The Judge in the DL case never ruled on a Section 1113 C motion.

In the first chapter 11 case US had all the unions had a Section 1113 C letter, and that did not stop the company from coming back for more with round two of concessions.

DL is free to file a Section 1113 motion at anytime and by law the pilots will have to negotiate.

There is nothing in the bankruptcy laws preventing a Section 1113 C motion.
 
The Judge in the DL case never ruled on a Section 1113 C motion.

In the first chapter 11 case US had all the unions had a Section 1113 C letter, and that did not stop the company from coming back for more with round two of concessions.

DL is free to file a Section 1113 motion at anytime and by law the pilots will have to negotiate.

There is nothing in the bankruptcy laws preventing a Section 1113 C motion.

everyone be quiet...the LAW has spoken......
 
From the DAL ALPA Chairman:

January 11, 2007


Dear Fellow Pilot,

the MEC remains totally committed and one hundred percent focused on one thing-the death of the US Airways' merger attempt. To that end, at this week's MEC meeting in Washington D.C. , the MEC unanimously passed a resolution committing $15 million dollars to the effort to ensure that Parker fails. Additionally, for the next several weeks, a substantial portion of all MEC operations will shift to Washington as we concentrate our efforts on Capitol Hill and the financial markets. Parker will soon come to realize that we cannot be ignored, that we are not going away, and that the Delta pilots will not be "synergized."


Fraternally,
Lee Moak, Chairman

Delta MEC

Now this is what I call "unionism" to the 10th power.

Doug and his team have bit off more than they can chew,and they may just have to choke on this one.