General Lee
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Airline pilots: We'll derail mergers if left out of talks
By LIZ FEDOR
McClatchy Tribune
Published on: 12/12/07
Minneapolis — John Prater, president of the Air Line Pilots Association, said Wednesday that his union is prepared to derail airline mergers if executives fail to involve pilots at the outset of consolidation talks.
"We have told the managements and the investment community that if consolidation is going to happen, they must come to ALPA first," Prater said in an interview after speaking to Northwest Airlines pilot leaders in Bloomington, Minn.
"We can make (mergers) work or we can destroy them," Prater said. "We are interested in mergers that form solid and profitable, long-term companies, not ones that just create a transaction so that the investors can cash out."
In his speech to the Northwest pilots, Prater said he talked about "the pitfalls of allowing management to create a US Airways-America West scenario." In that case, he said, the executives pressed ahead with a merger and "refused pay parity" for the combined pilot group.
In a merger involving ALPA pilots, Prater said that he will insist on "recovery from the bankruptcy era." He said that pilots will expect improvements in their pensions, work rules, wages and job protection.
"We will take the opportunity to help provide strong companies, but it's not going to be based upon the backs of cheap pilots," Prater said.
Pardus Capital Management, a New York-based hedge fund, tried to ignite a round of industry consolidation in mid-November when it called for Delta to merge with United Airlines. The Delta pilots union, which helped kill a hostile takeover by US Airways in January, criticized the hedge fund's attempt to push Delta and United into a quick deal.
At Eagan, Minn.-based Northwest, CEO Doug Steenland said in October that the carrier is evaluating merger scenarios, but it has not signaled whether it will initiate a deal.
Dave Stevens, chairman of the Northwest pilots union, said Wednesday that the pilots prefer that the airline remain independent and grow through alliances.
However, if a merger develops at Northwest, Stevens said that he has told Steenland and Board Chairman Roy Bostock that the pilots must benefit from the "value creation." The pilots would demand equity in the new company as well as contract improvements. Northwest pilots ratified two pay cuts — 15 percent and 23.9 percent — and agreed to other contract changes in bankruptcy that are saving Northwest more than $600 million a year in pilot costs.
Stevens said that a much broader constituency than the Northwest pilots would be affected by "who buys and who sells" in an industry consolidation.
Steve Derebey, a United pilot and union spokesman, said Wednesday that if any entity tries to force a transaction on the pilots "you'd see a marked and hostile reaction."
"We could ensure that a merger would fail," he added.
Bye Bye--General Lee
By LIZ FEDOR
McClatchy Tribune
Published on: 12/12/07
Minneapolis — John Prater, president of the Air Line Pilots Association, said Wednesday that his union is prepared to derail airline mergers if executives fail to involve pilots at the outset of consolidation talks.
"We have told the managements and the investment community that if consolidation is going to happen, they must come to ALPA first," Prater said in an interview after speaking to Northwest Airlines pilot leaders in Bloomington, Minn.
"We can make (mergers) work or we can destroy them," Prater said. "We are interested in mergers that form solid and profitable, long-term companies, not ones that just create a transaction so that the investors can cash out."
In his speech to the Northwest pilots, Prater said he talked about "the pitfalls of allowing management to create a US Airways-America West scenario." In that case, he said, the executives pressed ahead with a merger and "refused pay parity" for the combined pilot group.
In a merger involving ALPA pilots, Prater said that he will insist on "recovery from the bankruptcy era." He said that pilots will expect improvements in their pensions, work rules, wages and job protection.
"We will take the opportunity to help provide strong companies, but it's not going to be based upon the backs of cheap pilots," Prater said.
Pardus Capital Management, a New York-based hedge fund, tried to ignite a round of industry consolidation in mid-November when it called for Delta to merge with United Airlines. The Delta pilots union, which helped kill a hostile takeover by US Airways in January, criticized the hedge fund's attempt to push Delta and United into a quick deal.
At Eagan, Minn.-based Northwest, CEO Doug Steenland said in October that the carrier is evaluating merger scenarios, but it has not signaled whether it will initiate a deal.
Dave Stevens, chairman of the Northwest pilots union, said Wednesday that the pilots prefer that the airline remain independent and grow through alliances.
However, if a merger develops at Northwest, Stevens said that he has told Steenland and Board Chairman Roy Bostock that the pilots must benefit from the "value creation." The pilots would demand equity in the new company as well as contract improvements. Northwest pilots ratified two pay cuts — 15 percent and 23.9 percent — and agreed to other contract changes in bankruptcy that are saving Northwest more than $600 million a year in pilot costs.
Stevens said that a much broader constituency than the Northwest pilots would be affected by "who buys and who sells" in an industry consolidation.
Steve Derebey, a United pilot and union spokesman, said Wednesday that if any entity tries to force a transaction on the pilots "you'd see a marked and hostile reaction."
"We could ensure that a merger would fail," he added.
Bye Bye--General Lee
