US/DL Merger Rumors Merely Slight of Hand???

[KozzyCFI]

When one looks at the info out there on this potential merger, you see very little commonality between fleet types, tons of route overlap, and a double-covering of the northeast shuttle. Could this merely be slight of hand to run the stockprices up of US to generate more capital and buying power to then turn around and buy Northwest, who has much better fleet commonality and much less route overlap...not to mention such coveted Pacific routes???? ala Frank Lorenzo???

 

[luckytohaveajob]

Don't forget Eastern

Lorenzo proposed a merger with National. Ran up the stock price of CAL in a bidding war for National with Pan Am bidding. Let Pan Am get suckered into buying National for way to much hurting both Pan Am and National. And then used the leverage gained in the bidding war to take the larger Eastern.

With US Air's stock going up 16% today, this could very well be the bait and switch game previously done by Lorenzo.

 

[pilot141]

Considering that USAir already has the billions of dollars in financing lined up from Citibank..........no.

They didn't SLIGHT anyone with their SLEIGHT of hand.

 

[luckytohaveajob]

Lorenzo used financing to purchase all his airlines

Citibank financing could be used on Northwest just as easily as it could be used on Delta.

Lorenzo never purchased an airline with his own money, he always used the banks.

Give me another reason why Parker could not be using Delta as the bait and switch to get into a bidding war with UAL, leave UAL holding an overpriced DAL, and then US goes onto to quickly buy NWA, CAL, or even AAI?

 

[pilot141]

I don't have a dog in this bait-and-switch Lorenzo fight. The OP asked about running up the stock price of US Air and I stated that the financing is coming from Citibank, not the equity of the stock. Check the post times - I was posting to the OP, not you.

 

[jetflier]

Hey -141...

A great point, and a strategy that seems to have worked before. We're all just along for the ride aat this point.
At NWA we'd be happy just to get rid of the Investment Banker owner a$$ holes that have been ruining NWA since the 1986 merger with Republic.

The entire corperate governance at NWA is money first, customer service last, as far as employees go, their motto is .."row harder".....!

 

[b19]

The bottom line is don't buy the new car, continue to drive the old junker, pay off all the credit cards, it's bah humbug for Xmas, and get ready for another round of shakeups and pain. Will there ever be an upside to this industry ?

 

[FlyBoeingJets]

On a related note....


How did "Labor" undo the deal between CAL and DAL years ago?? Can Labor undo another deal if it gets that close again??

 

[munson]

The bottom line is don't buy the new car, continue to drive the old junker, pay off all the credit cards, it's bah humbug for Xmas, and get ready for another round of shakeups and pain. Will there ever be an upside to this industry ?

Thats good advice regardless of whats going on in the industry, if we all did this, dudes wouldnt want to work till 65. ITS NOT ROCKET SCIENCE!

 

[michael707767]

On a related note...How did "Labor" undo the deal between CAL and DAL years ago?? Can Labor undo another deal if it gets that close again??

"Labor" did not really undo the deal between CAL and DAL, not directly anyway. Mullin refused to say Delta would honor CAL labor agreements regarding job protections and integration rights, and as a result Bethune backed out of the deal.

Mullin was quoted as saying, "you mean this fell apart over labor?" Later he would prove how little he understood labor relations.

 

[atrdriver]

Mullin refused to say Delta would honor CAL labor agreements regarding job protections and integration rights, and as a result Bethune backed out of the deal.

And there was a CEO with integrity. Wow. Someone who would make a stand for his employees. What a concept.

 

[Iron Man]

When one looks at the info out there on this potential merger, you see very little commonality between fleet types, tons of route overlap, and a double-covering of the northeast shuttle. Could this merely be slight of hand to run the stockprices up of US to generate more capital and buying power to then turn around and buy Northwest, who has much better fleet commonality and much less route overlap...not to mention such coveted Pacific routes???? ala Frank Lorenzo???

At last the sweet sound of wisdom and understanding. This deal could never happen. The loss of jobs alone, not to mention base closures will send shock waves. Delta will hook up with Northwest or Continental.

 

[CAL EWR B737]

"Labor" did not really undo the deal between CAL and DAL, not directly anyway. Mullin refused to say Delta would honor CAL labor agreements regarding job protections and integration rights, and as a result Bethune backed out of the deal.

Mullin was quoted as saying, "you mean this fell apart over labor?" Later he would prove how little he understood labor relations.

My two cents:

I was the one who set up the tail of the two senior managers from Newark to the secret location of the CAL Board of Directors meeting to decide on the two offers NWA virtual merger or a full blown DAL merger.

Without going into much detail here is my thoughts. The IACP (CAL independent pilots union at the time) and Gordo were married that day. Bonderman the investor who essentially owned CAL and wanted out. He and Gordo were always at odds. If the Delta deal went through Gordo and his friends were out of a job. Greg Brenerman our president at the time and much of the brains behind our turn around would have been the president and number two at Delta/Continental. Gordo's underlinks essentially leaked this information to the IACP at a breakfeast meeting that morning in Houston so the pilots would go balistic and delivered the threats of severe labor unrest. Gordo used that threat to assist Bonderman into the NWA deal which kept him employed for another six years at CAL. So yes we played a important role but Gordo also wanted it that way.

 

[cactusboy53]

How is that possible?? What? Are you saying that the bid for ATA was just a ploy to get SWA's money and attention involved? That way SWA wouldn't be able to do anything about a AWA's aquisition of US Air?

It all sounds like an eeeevviiiilll plot.......for 8 biiiiiilllllliiiion dollars!!!!

 

[CaptainKrash]

It all sounds like an eeeevviiiilll plot.......for 8 biiiiiilllllliiiion dollars!!!!

Now that's funny!