Anderson thinks a merger would be in the employees' best interests.....

[General Lee]

Delta CEO: Merger may be in workers' best interest

Wed Jan 16, 2008 10amEST

By Chris Reiter
NEW YORK (Reuters) - Delta Air Lines Inc (DAL.N: Quote, Profile, Research) Chief Executive Richard Anderson told employees that a merger may be in their best interest.
"We have said that Delta would be open to consolidation if it was in the best interests of our shareholders and our employees," Anderson said in a weekly voicemail to employees that was posted late on Tuesday. "We have the best interests of Delta and its employees in mind."
He did not comment on a report in The Wall Street Journal on Tuesday that Delta is in merger talks with both Northwest Airlines Corp (NWA.N: Quote, Profile, Research) and United Airlines parent UAL Corp (UAUA.O: Quote, Profile, Research) and aims to select a partner by early February.
Delta, Northwest and UAL have declined to comment on the reported talks.
Managers are working to win over employees, who gave up wages and benefits in order to keep the airlines operating during the five-year slump following the September 11, 2001, attacks.
Airline workers, especially pilots, have a powerful voice in the industry and could hobble a deal if they disapprove.
In a similar move, Northwest CEO Doug Steenland sent a memo to employees on Tuesday saying the No. 5 U.S. carrier needed to consider all options in order to stay competitive.
Northwest cannot "just wait for our future to be dictated to us," Steenland said in the memo.
The U.S. airline industry is trying to rescue its fledgling recovery, which is threatened by soaring fuel prices and a softening economy. Most major U.S. airlines are expected to post losses for the fourth quarter of 2007 after profits earlier in the year.
Mergers are seen as a way to stabilize the industry by allowing carriers to cut costs, reduce capacity and raise fares.
Delta has been at the forefront of airline merger talk for months. In November, it said it had set up a special board committee to help it review strategic options, including mergers.
Anderson said high fuel prices, which are hovering near record levels, require Delta to examine its options.
"With these fuel prices at the levels we haven't seen before, it's important that we always be certain that Delta is in a safe harbor and that it is a leader in the global airline industry," he said.
Delta, which emerged from bankruptcy last spring after fending of a hostile takeover bid from US Airways Group Inc (LCC.N: Quote, Profile, Research), is expected to post a loss for the fourth quarter.
Anderson told employees that a merger could "make Delta a stronger and more viable enterprise."
"It will improve your situation at Delta, all of our situations at Delta," he said.
(Editing by John Wallace)



How about in managements' and hedge funds' best interests? Maybe Anderson should spill some beans and tell us what he means?


Bye Bye--General Lee

 

[Secret Squirrel]

Mergers are seen as a way to stabilize the industry by allowing carriers to cut costs, reduce capacity and raise fares.




How about in managements' and hedge funds' best interests? Maybe Anderson should spill some beans and tell us what he means?


Bye Bye--General Lee

They are screaming out what they mean. Cut costs, by reducing capacity allowing them to raise fares.

 

[Noserider76]

How about in managements' and hedge funds' best interests? Maybe Anderson should spill some beans and tell us what he means?


Bye Bye--General Lee

Wasn't it just Sep when he came on-board and said "I'm not here to facilitate a merger"? Well that went out the window in record time so if his lips are moving..............

 

[NuGuy]

Wasn't it just Sep when he came on-board and said "I'm not here to facilitate a merger"? Well that went out the window in record time so if his lips are moving..............

Heyas,

Along with "we will work to protect the seniority of our employees."

Har har...

Nu

 

[snow-back]

It'll be interesting to see how they integrate all the non-union Delta flight attendants (or most DAL employee groups as far as that goes) with the union NWA or UAL employees.

 

[Max Powers]

I predict he will get just enough people either by suckering them or paying them off to get this thing shoved down the employees throats.

Say hello to capacity reduction for the next 5 years.....Can you say no movement

 

[General Lee]

They are screaming out what they mean. Cut costs, by reducing capacity allowing them to raise fares.

Reduce capacity? Someone like Southwest or Airtran will come in behind them and add some themselves. The days of mergers and reducing capacity are over. LCCs are looking to pick up cheap terminal space (so they don't have to spend the money to build their own new terminals) and expand wherever they can, since current large airports have overcapacity( and legacies are less likely to give up anything at large airports or slotted airports) and the LCCs are still getting new airplanes.


Bye Bye--General Lee

 

[~~~^~~~]

Airline mergers have been disasters. At least when DAL, NWA, and UAUA eat themselves the consumer will have choices like Cebu Pacific to fly from Atlanta to Denver.

Wonder if they are dancing in their cubicles at CAL and American....

 

[General Lee]

Heyas,

Along with "we will work to protect the seniority of our employees."

Har har...

Nu

On the pilot side as far as job PROTECTION goes, that is now on the shoulders of Lee Moak. He keeps saying he can "stop the merger or any merger from happening." According to our contract, he does have the ability to approve or disapprove a merger, and we did not give that right up in BK. This isn't Force Majeur, this is a merger or acquisition attempt. So, if Lee has this power, he had better protect the Delta pilots.

As far as the other employees at Delta, well, there are no other unions, and that means no contracts.
If a merger or acquisition does take place, one thing is for sure though, we only need one set of high priced management. 50% will go.

Seniority protection, well, that is a matter for the arbitrator I guess....


Bye Bye--General Lee

 

[General Lee]

It'll be interesting to see how they integrate all the non-union Delta flight attendants (or most DAL employee groups as far as that goes) with the union NWA or UAL employees.

That is why Delta would have to be the buyer. If they were not, then the stews could possibly be stapled (along with all non union employees). I know a bill has been introduced not allowing that anymore, which probably could solve that problem, and go right to Alleghany/Mohawk if you do not have a union.... If Delta were the buyer, it could set the rules, since it would not have to throw it to AFA rules...


Bye Bye--General Lee

 

[~~~^~~~]

General: Could that play in reverse since the DAL bankruptcy contract is much better than the NWA deal?

 

[General Lee]

General: Could that play in reverse since the DAL bankruptcy contract is much better than the NWA deal?

I don't understand what you mean?


Bye Bye--General Lee

 

[SDF2BUF2MCO]

Airline mergers have been disasters.
Wonder if they are dancing in their cubicles at CAL and American....

Well, once you get through hearing all the curse words from former Ozark folks regarding their "merger" with TWA it wasn't too bad. Then you hear from the TWA folks regarding their merger/buyout with AA.....it has a happy ending afterall (joking). Seriously, there are more horror stories than "boy that sure turned out nice" stories with mergers. Those in "charge" view people as a commodity.
Regarding the dancing, Polka music would sure be nice .

 

[Draginass]

The ones who make money off mergers are the senior execs and lawyers, who pocket a ton of cash, then walk off leaving the mess for the employees to clean up.

 

[B737 Guy]

Airline mergers have been disasters. At least when DAL, NWA, and UAUA eat themselves the consumer will have choices like Cebu Pacific to fly from Atlanta to Denver.

Wonder if they are dancing in their cubicles at CAL and American....

One other thing to mention. Unless its a sale of assets, these things usually take many years to complete. Look at Us Airways and America West.

 

[9rj9]

what happened..

What happened to "keep delta my delta"???
I guess the clowns in Atlanta wanted to get paid since the stock options awards didn't work out.

Delta can't make money over the long term without reducing some capacity on the domestic side, so to cover this flaw in the plan, they announce a merger, ha, now it gives them a year or two to hide the fact they can't make money.

This is the biggest con job you will ever see. No capacity will be reduced just transfer of cash from the have nots to the haves.

They will be able to take massive writedowns/offs since making money is not the real goal here, the goal is to survive long enough to GET PAID.

After the smoke clears and the bosses retire to their mcmansions, the employees will be stuck with fixing a broke business model.

 

[Max Powers]

Here is why it will pass the senior ("I got mine crowd") at Delta will approve the merger because their Cpt slots are safe and with the downsizing in capacity and increase in revenue they will get a nice fat raise while the Junior schmucks get stuck on reserve with no upgrade in sight for the next 2 decades.

 

[FDJ2]

It'll be interesting to see how they integrate all the non-union Delta flight attendants (or most DAL employee groups as far as that goes) with the union NWA or UAL employees.

My guess is via Allegheny-Mohawk LPPs. I believe that with the McCaskill-Bond legislation that A-M is now the baseline merger policy.

 

[puddlejumper101]

hmm...didn't see this coming (note of sarcasm). reducing capacity??? NAH...really? Anything execs say...just think the opposite.

The thing is DAL and NWA or UAUA will try to see this any way they can to make it seem like it is better than it is. They will also start their jibberish about how if they are not allowed to merge, one of these airlines might dissapear. Given the state of our economy...I think these airlines do have to do something before everything collapses on them. They will have to reduce capacity to survive...even if it means giving it up to the low cost carriers.

 

[~~~^~~~]

Puddlejumper - The business of the future will revolve around increasing revenue. This has been the raison d'etre for operating a network with global connectivity and diverse revenue streams.

BTW - there is no such thing as a Low Cost Carrier - with fuel prices where they are - it is all high cost. It costs AirTran more to get a coach seat to the west coast than it does Delta.

Shrinking actually drives up unit costs, which is why most airlines grow themselves into trouble. The network carriers learned from those mistakes and have been pretty conservative when it comes to domestic capacity.

 

[MINIME]

Hopefully there will be none or very little job loses.

But I imagine the goal here is to come out lean and become the new Wall Street darling for about a month. In that time, Pardus, CEOs and Bethune will get their pay-day and just like that, everybody's happy once again. Then they'll move on to the next venture. And we'll still be here fighting about my airline is better than yours type of crap, wondering what the hell just happened!

The rich get richer and the middle and lower middle class gets handed a new one once again.