When Money’s Involved, the Truth Can Take a Beating...

[a320av8r]

When Money’s Involved, the Truth Can Take a Beating
Illustration by The New York Times

By ANDREW ROSS SORKIN
Published: January 14, 2007
FACED with a hostile takeover bid from US Airways, the chief executive of Delta Air Lines, Gerald Grinstein, has played the role of Greta Garbo, publicly insisting for the past two months that his company wanted to be alone. Behind the scenes, however, his act has been much more Mae West, as his company made come-hither phone calls to rival Northwest Airlines to discuss a possible deal.

Mr. Grinstein even two-timed Delta’s staff, who have been proudly sporting red campaign badges that read “Keep Delta My Delta!†to rally support to remain independent. The chief of Delta’s pilots union, Lee Moak, told The Associated Press last month, “There’s no talks going on between Delta and any other airline.’

Mr. Grinstein is just the latest executive who, faced with an unsolicited offer, seems to be speaking out of both sides of his mouth. Too often, executives seeking to fend off unwanted takeovers make claims that end up looking foolish in hindsight. In their desperate attempt to ward off bidders, executives make every excuse in the book, but rarely say what they really mean: Show me the money.

Truth, it would seem, is the first casualty in a takeover battle...

Not a Delta virgin!!!

 

[NYCDelta]

When Money’s Involved, the Truth Can Take a Beating
Illustration by The New York Times

By ANDREW ROSS SORKIN
Published: January 14, 2007
FACED with a hostile takeover bid from US Airways, the chief executive of Delta Air Lines, Gerald Grinstein, has played the role of Greta Garbo, publicly insisting for the past two months that his company wanted to be alone. Behind the scenes, however, his act has been much more Mae West, as his company made come-hither phone calls to rival Northwest Airlines to discuss a possible deal.

Mr. Grinstein even two-timed Delta’s staff, who have been proudly sporting red campaign badges that read “Keep Delta My Delta!†to rally support to remain independent. The chief of Delta’s pilots union, Lee Moak, told The Associated Press last month, “There’s no talks going on between Delta and any other airline.’

Mr. Grinstein is just the latest executive who, faced with an unsolicited offer, seems to be speaking out of both sides of his mouth. Too often, executives seeking to fend off unwanted takeovers make claims that end up looking foolish in hindsight. In their desperate attempt to ward off bidders, executives make every excuse in the book, but rarely say what they really mean: Show me the money.

Truth, it would seem, is the first casualty in a takeover battle...

Not a Delta virgin!!!

The Delta Board Council sent the following letter to the NYT:

January 15, 2007
To: Andrew Sorkin, The New York Times
From: The Delta Board Council
Regarding: NYT Article: When Money’s Involved, the Truth Can Take a Beating



Dear Mr. Sorkin,

The Delta Board Council, an employee advocacy group which represents more than 40,000 active Delta employees worldwide, wishes to express its astonishment at your inflammatory and inaccurate column in Sunday's New York Times. To suggest that our CEO, Mr. Grinstein, has been dishonest regarding our company's stand on any merger and acquisition scenarios insults and impugns his integrity and our integrity, and serves as a cheap shot aimed at our loyal and unified workforce.

The Keep Delta My Delta campaign was started by our group, without prompting, and without direction, and was and remains a grass-roots campaign against the hostile takeover proposed by US Airways. KDMD has been recognized by our leaders, the news media, and the markets as a deeply held response from Delta employees against US Airways' bid. It is independent of, and indeed contemplates the possibility of, more constructive strategic alternatives to the US Airways proposal.
As to Mr. Grinstein’s public and private statements (we meet with him regularly), he has never wavered in his desire to emerge from bankruptcy as an independent carrier. However, at no time has Mr. Grinstein promised that we will never consider future strategic alternatives on our terms. The point is, Delta wants to be in a position of leadership and strength when making those determinations on behalf of its stakeholders, and that’s best done out of bankruptcy. Again, Mr. Grinstein has been steadfast in his belief that a merger with US Airways does not serve the best interest of our employees, our customers, the communities we serve, or our creditors. And as the voice of Delta people worldwide, we agree emphatically with Jerry on this point.

Should there be serious talks around mergers and acquisitions, the Delta Board Council will continue to represent Delta employees to seek the best outcome for all Delta people. That is our charter and our commitment. Yes, Mr. Sorkin, accusations of subterfuge can make for a titillating story, but the Delta Board Council would ask that if in the future you wish to cast aspersions against our company's leadership, you at least check your facts first.

The Delta Board Council,
Anne Larkin
Beth Graham
Jack Roth
Bill Morey
Christopher Muise

 

[PHLfa88]

The Delta Board Council sent the following letter to the NYT:

January 15, 2007
To: Andrew Sorkin, The New York Times
From: The Delta Board Council
Regarding: NYT Article: When Money’s Involved, the Truth Can Take a Beating

Dear Mr. Sorkin,

The Delta Board Council, an employee advocacy group which represents more than 40,000 active Delta employees worldwide, wishes to express its astonishment at your inflammatory and inaccurate column in Sunday's New York Times. To suggest that our CEO, Mr. Grinstein, has been dishonest regarding our company's stand on any merger and acquisition scenarios insults and impugns his integrity and our integrity, and serves as a cheap shot aimed at our loyal and unified workforce.

The Keep Delta My Delta campaign was started by our group, without prompting, and without direction, and was and remains a grass-roots campaign against the hostile takeover proposed by US Airways. KDMD has been recognized by our leaders, the news media, and the markets as a deeply held response from Delta employees against US Airways' bid. It is independent of, and indeed contemplates the possibility of, more constructive strategic alternatives to the US Airways proposal.
As to Mr. Grinstein’s public and private statements (we meet with him regularly), he has never wavered in his desire to emerge from bankruptcy as an independent carrier. However, at no time has Mr. Grinstein promised that we will never consider future strategic alternatives on our terms. The point is, Delta wants to be in a position of leadership and strength when making those determinations on behalf of its stakeholders, and that’s best done out of bankruptcy. Again, Mr. Grinstein has been steadfast in his belief that a merger with US Airways does not serve the best interest of our employees, our customers, the communities we serve, or our creditors. And as the voice of Delta people worldwide, we agree emphatically with Jerry on this point.

Should there be serious talks around mergers and acquisitions, the Delta Board Council will continue to represent Delta employees to seek the best outcome for all Delta people. That is our charter and our commitment. Yes, Mr. Sorkin, accusations of subterfuge can make for a titillating story, but the Delta Board Council would ask that if in the future you wish to cast aspersions against our company's leadership, you at least check your facts first.

The Delta Board Council,
Anne Larkin
Beth Graham
Jack Roth
Bill Morey
Christopher Muise

Delta is PAYING to Send Employee's to "Keep Delta My Delta" Campaigns in Various Cities. This is NOT a Grass Roots Campaign if The Company IS Paying For it!!
Keep Thinking YOUR Mgmt IS Looking Out For YOUR Best Interest Folks!!

 

[FW190]

Delta is PAYING to Send Employee's to "Keep Delta My Delta" Campaigns in Various Cities. This is NOT a Grass Roots Campaign if The Company IS Paying For it!!
Keep Thinking YOUR Mgmt IS Looking Out For YOUR Best Interest Folks!!

I have more respect for the current management team at Delta than those I've worked under over the past fifteen years. However, common sense and life experience should make it perfectly clear that the only person who has your best interest at heart is you.

 

[NYCDelta]

Delta is PAYING to Send Employee's to "Keep Delta My Delta" Campaigns in Various Cities. This is NOT a Grass Roots Campaign if The Company IS Paying For it!!
Keep Thinking YOUR Mgmt IS Looking Out For YOUR Best Interest Folks!!

Oh, so the bankruptcy judge is allowing DL to spend money on an anti-merger campaign? Just out of curiosity, what is your personal stake in this merger? Why do you want it so badly? Why do you feel the need to come to the DL board and "educate" us? Are you that concerned for our welfare?

 

[brokenwrench]

I think Delta employees support Grinstein over Parker is for the following simple reasons.

USAirways is clearly the worst airline for Delta to merge with and this is bad for many reasons, just a few are;

Wages - USAirways had the lowest compensation per employee of all major carriers in 2005. (they have did not get any raises in 2006) The highest common denominator in pay is Delta bankruptcy pay levels. These are near the lowest in the industry and barely above USAirways. With 2% increases for the next 5 years it would leave Delta Mechanics near or at the bottom of the industry in pay long term.

Benefits - As of Jan 1, 2007 USAirways has implemented fees for non-rev travel significantly higher than the $50 per year fee Delta people currently pay. Delta has had one of the best global non-rev travel policies in the industry for decades.


Jobs - present - Mr. Parker (CEO USAirways) clearly indicates only front line jobs were not lost during the AmWest USAir merger of 2005. These companies lost many employees by "attrition and leaves" In this industry that means people who want to work at the airline are let go, Mr. Parker calls these jobs synergies.

Jobs - Future - With the reduction of many NON-frontline positions the ability to be promoted to leadership positions becomes limited.

Consumers will see less frequency and less service to smaller cities. Delta has been expanding its network both globally and domestically since they entered bankruptcy in late 2005. Delta flies to over 292 destinations worldwide and all 50 states. Neither USAirways or AmWest increased service during their bankruptcies.

This campaign is about the future of our families, our livelihoods, benefits, and pay.

 

[yvrusfa]

brokenwrench....

A few corrections to your post. As a "frontline" US employee I thought the record should be corrected for the DL employees here on this board.

1. Benefits.... There has been NO implementation as of 1, Jan 2007 of any kind of "fee" for non-rev travel. Domestic travel for the employee continues to be free. Upgrades are a nominal charge.
Trans-Atlantic is free except for Int'l taxes and/or a charge applies for Envoy upgrades ONLY!

2. Jobs.....There were NO furloughs and/or layoffs following the US/HP merger. NONE! The "leaves/early outs" did apply and the only ones who took them were people who wished to retire or leave for whatever reason. About 1900 F/A's (mostly senior) F/A's, for example did take the early out option and were paid a certain dollar amount and have travel benefits. None of those that accepted these were people who wished to stay as far as I know.
Also, with attrition, as employees quit/are fired, they are not necessarily replaced, but that is quite different than people being fired or furloughed involuntarily.

3. Wages.....I don't know exactly how US compares to all others, but I do know that I have seen many of the post-911 concessionary wage scales in the past few years in passing and in comparison to ours and there was not much difference if any...especially at the top end. I have not seen DL's.
DP did say that if the companies merge the "higher of the two" wage scales and costs will be retained. So if DL is higher then that is what all would get. I can't speak to % increaes going forward. It is pretty bleak everywhere anymore in this industry though as far as that is concerned anyway!

As far as less choice for consumers etc...that is up to the DOJ to decide I guess. One point though..
Fewer airlines flying does probably mean pricing power and that creates profits. Something DL has not seen in 5 years and that creates a more stable company. Thus, higher wages in the long-term.
Just a thought.

Hope that clears some things up.

 

[Itestwell]

Someone explain to me why airlines should not be able to price their product at a profitable level? Why do people always accuse the airlines of price gouging, reducing competition, and the like? It cracks me up! God forbid an airline make a profit and pay its employees a liveable wage.....

 

[gaucho99]

More corrections to Brokenwrench:

Many US employees did receive pay increases in 2006 including yours truly and I have another increase on Feb. 1.

 

[brokenwrench]

More corrections to Brokenwrench:

Many US employees did receive pay increases in 2006 including yours truly and I have another increase on Feb. 1.

Are you a Frontline employee under contract?

 

[Itestwell]

Brokenwrench says:

it would leave Delta Mechanics near or at the bottom of the industry in pay long term.


I thought that DP has been saying since Day 1 that all employee groups would be going to the higher of the 3 pay scales at the 3 merging airlines?

 

[brokenwrench]

Delta is a BANKRUPT company. Pay for AMT's and other employees reflect that. Delta AMT's currently only out earn the SCAB contract at NW and the US AMT's. Thus if the merger goes thru they will be at or near the bottom in compensation. Parker has no intention to bring pay up to "market rate." ONLY bring pay up to that of a BANKRUPT airline.

It is my understanding that there will some modest raises for the Delta AMT's upon exiting BK in the Delta stand alone plan.

I do not think that Parker has said anything about raises, only moving to the higher rates.

 

[Itestwell]

Delta is a BANKRUPT company. Pay for AMT's and other employees reflect that. Delta AMT's currently only out earn the SCAB contract at NW and the US AMT's. Thus if the merger goes thru they will be at or near the bottom in compensation. Parker has no intention to bring pay up to "market rate." ONLY bring pay up to that of a BANKRUPT airline.

It is my understanding that there will some modest raises for the Delta AMT's upon exiting BK in the Delta stand alone plan.

I do not think that Parker has said anything about raises, only moving to the higher rates.

So if DL stands alone, the DL employees can expect modest raises, right out of BK? Or is it just the mechanics? Wow, that's one he!! of a plan!

 

[brokenwrench]

All of the non union employees can expect some sort of raise. The pilots and dipatchers are covered under there working agreements.

As far as if the plan is good or not I can not say. I hope for them that it is. I do not work there but will feel no ill will if they go it alone and get a raise.

 

[gaucho99]

Are you a Frontline employee under contract?

I work in Customer Relations. We adopted the customer service pay scale without being part of the union.