ALPA to DL: No givebacks for now

[vc10]

This is Mike Pinho, Communications Committee Chairman, on Wednesday, July 23, 2003 with a special Code-a-Phone message.

The MEC met in special session in Cincinnati on July 22nd and 23rd. The MEC received in-depth briefings from ALPA’s Economic and Financial Analysis Department, the Milestone Merchant Partners (investment banking firm), and the Strategic Planning Committee. The Negotiating Committee also provided the MEC with detailed information concerning management’s July 15th proposal. Management maintains a two-phased approach as initially presented. Their approach requests significant pay reduction now, followed by Section 6 negotiations commencing in the fall of 2004. This concept is inconsistent with the MEC’s vision of pilot investment in the financial recovery of our airline.

The MEC has philosophical differences with Delta management in three areas:

Delta pilots require a contract extension as part of any agreement providing a strategic investment in our company.
Delta pilots understand that our company has a long-term debt problem. The MEC believes there is a “Delta solution” to this “Delta problem.” The MEC does not believe that our pilot costs must be aligned with the pilot costs at restructured airlines for our company to be profitable.
o Delta pilots feel strongly that all stakeholders must participate in our airline's recovery.

While there are significant differences in our philosophical perspectives on pilot involvement, your Negotiating Committee is prepared to engage in future negotiations in accordance with the direction of the MEC. This will occur when Delta management agrees to adopt the aforementioned philosophical imperatives.

Until then, we will continue to closely monitor the status of our industry. We stand ready to engage management when they appreciate the considerable value of pilot participation in the financial recovery of our airline.

 

[General Lee]

Delta, Pilots End Talks on Pay Cuts
Wednesday July 23, 4:03 pm ET
By Harry R. Weber, AP Business Writer
Delta, Pilots End Talks on Pay Cuts; Union Opposes Wage Concessions at Other Airlines


ATLANTA (AP) -- Negotiations between Delta Air Lines and its pilots over wage concessions appear to have broken down, the union said Wednesday, citing philosophical differences.
In a memo to pilots, union spokesman Mike Pinho said the negotiating committee decided after two days of meetings in Cincinnati that it won't sit back down at the table with management until the company addresses the union's concerns.


"While there are significant differences in our philosophical perspectives on pilot involvement, your negotiating committee is prepared to engage in future negotiations," Pinho wrote. "This will occur when Delta management agrees to adopt the aforementioned philosophical imperatives."

Pinho said Delta's proposal requests significant pay reduction now, followed by further negotiations in the fall of 2004. He said the concept is inconsistent with the union's vision of pilot investment in the financial recovery of the airline.

Pinho said that Delta pilots want a contract extension as part of any agreement with the company. He also said that the union doesn't believe that pilot costs at Delta should be made in line with other debt-ridden airlines that have restructured of late.

American Airlines, the world's largest carrier, won deep concessions from pilots.

In late June, Atlanta-based Delta, the nation's third-largest carrier, and its pilots union opened talks to discuss wage concessions.

Delta has said it wants to cut pilots' hourly wages by 22 percent, cancel pay raises due over the next year and reduce some benefits. The airline also wants to rescind a 4.5 percent raise the pilots received May 1 and a similar raise due next May.

Chief executive Leo Mullin said as recently as last week that negotiations between the union and company were continuing and that he was confident a mutually acceptable resolution could be worked out.

Delta, which lost $1.3 billion last year, has reduced its staff by 16,000 since the Sept. 11, 2001, terrorist attacks and furloughed hundreds of pilots. It had said it needs to reduce pilot costs as part of its recovery.

Pinho said the union "will continue to closely monitor the status of our industry."

He added, "We stand ready to engage management when they appreciate the considerable value of pilot participation in the financial recovery of our airline."




This is very interesting. Delta thought they could "demand" wage concessions only from the pilots, even though the other employee groups had no unions or contracts. People might say that they make less money and shouldn't have to fork some over. I say they never paid for "protection" or union dues, and therefore can get paycuts when the company wants to impose them. The reason Delta did not want to make paycuts for them was the union factor. The key here is that Delta is not exactly the same as AA or UAL. We did not lose any planes during 9-11, and we did not buy TWA. Delta has leaned its operations, letting go of over 16,000 employees (including 1310 pilots unfortunately), and creating a subsidiary to combat the LCC's---Song. We have parked unprofitable airplanes---all the 727's , L1011's, and 11 MD-11's. We have deferred airplanes deliveries until better times--hopefully 2005 and 2006. We have flexibility with the RJ's, and the loads have done well this summer. Hopefully there will be an "up" cycle to all of this, and at the same time we will have to watch the LCC's and respond accordingly-- probably with Song of course. If the negotiations are truly over, then I guess we can see a new contract in late 2007----(after they start in May, 2005). Maybe Leo and the boys will change their $$$$pension philosophy and we can all contribute.---the key word is ALL.

Bye Bye--General Lee

PS---Yes, Jake, I was tooting Delta's horn---you were right

 

[Heavy Set]

Wow - quite a stance on negotiations. I agree that management should not dictate what the pilots MUST do when they themselves continue to receive big bonuses and special retirement deals - it is an inconsistent message. All labor groups should participate in cost cutting - not just the sole group represented by a union...

Now, what the MEC needs to do is determine how Delta pilots will participate in the growth of the 70-100 seat sector. Any future pay negotiations should be tied to actively participating in the 70+ seat aircraft growth. Time to get the furloughees back in the air...

 

[General Lee]

It's called having BALLZ.


Well said Heavy Set. This needs to be a "family affair." All members of the family should have to contribute---including management and the other labor groups. The company will have to decide if they need the money now, and if they do they can have it with Dalpa getting something in return, like a contract extension and the return of some furloughs---all eventually of course. Remember, the difference in cash on hand from the end of March to the end of June added an extra $1.1 billion----and they can use some of that for their debt payments!!

Bye Bye--General Lee

 

[Singlecoil]

I think the issue of the Delta Pilots and their pay is the most important issue facing our profession today. They are the tip of the spear, clinging to the bar they have worked so hard to raise. Somebody has to hold the line and say, "We're the highest paid, get over it and lead this company into the future." I'm not a Delta pilot, but my future rests on their solidarity and savvy. My hat is once again off to the Delta pilots (until the hat police spot me that is).

 

[XGmaninGA]

General Lee,

Good job. I wish my Delta brethern all the best.

 

[NYRANGERS]

In summary, the MEC has significant philosophical differences in three areas:

* Delta pilots require a contract extension as part of any agreement providing a strategic investment in our company.

* Delta pilots understand that our company has a long-term debt problem. The MEC believes there is a "Delta solution" to this "Delta problem." The MEC does not believe that our pilot costs must be aligned with the pilot costs at restructured airlines for our company to be profitable.

* Delta pilots feel strongly that all stakeholders must participate in our airline's recovery. Additionally, your Negotiating Committee will not enter into a tentative agreement in which our investment fuels future executive bonuses, executive special retirement plans and stock buy back programs.







I think it is the last sentence in the third item that made "management" walk away.

 

[Buffett]

A big thumbs up to the Delta pilots. I hope that our pilot group can show the same solidarity.

 

[FLB717]

GO BIG D

 

[General Lee]

Yeah, I think Dalpa did a good job. I think we will eventually give some, but there will be eventual givebacks and no executive bonuses when we are taking cuts. that just makes sense, and Delta sis not have the same problems AA and UA had, so why should we take the same cuts? We also have $3 billion in cash--we should use some of that to pay off some of the debt.

Bye Bye--General Lee

 

[cl65@350]

thank God that delta pilots are defending a profession that has been literally raped by numerous ivy league mbas and politicians...they are the only thing left fighting in an industry where the pilot contracts are spiraling uncontrollably downward to terra firma! i think that all of us can learn from this pilot group as they stand firm, bleeding from both nostrils and tell management to pound sand!

bravo to dalpa

thank you for keeping the flame lit and dreams intact

 

[dogg]

It is nice to see at least the leadership for the DL pilot group putting the brakes on what has become a runaway train carrying the liveliehoods of thousands of pilots back into the murky past. Perhaps this will give other pilot group leadership the vision to take a more wait-and see approach and not rush to give back the long slow hard won gains that make the job worth going to....... time will tell.....Thankyou DALPA

 

[FlyBoeingJets]

We also have $3 billion in cash--we should use some of that to pay off some of the debt.

Bye Bye--General Lee

This is not what the thread is about but.....

The Cash is there because management secured the loans only recently. It is wise because you don't wait until you're almost out of money to ask for more. Then they charge more or won't give it to you at all.

Since Leo Mullin is a banker, I trust him on this one.

 

[CU@OSHKOSH]

Leo

He might be a banker, but he still has a lot to learn about being a good leader.

 

[General Lee]

True-dat.

 

[FlyDeltasJets]

I have to say that I am encouraged to hear so much support from pilots of other airlines. Too many times on this board the Delta pilots have been criticized for our fight to keep our salaries at the levels appropriate to this profession.

Thanks for the support. Thanks to my MEC. GREAT JOB!

I know that we will probably still end up giving some concessions, and perhaps some are needed. But we will not just roll over to whatever mgt demands. Our futures are tied to this airline, unlike any of theirs.

 

[ProLine4]

Gen Lee,

Just a few questions for you...this is not flamebait by any means. Do you know if this situation of not accepting the 22% cut is a situation where A) DALPA doesn't want any cuts period so find another way to cut costs, or B) DALPA would take a cut, but just not 22%...ie, "the Delta solution to a Delta problem."

There was a good article in the Chicago Tribune recently about the pay disparity between the various majors. Sorry, I deleted the link I had to it, but it printed firm numbers to the differences between mainline and AA/UA/others. (I'm guessing that Virginia Ave does have a subscription to the Tribune and probably walked into negotiations with copies in hand.) However, I do agree that it is -somewhat- inaccurate to compare the Big Three pilot contracts for various reasons....namely financial stability (everyone's losing cash, but DL is just losing less and is for once making a profit thanks to the Gov't) and the fact that the numbers printed for UA and AA are current and do not reflect what they were before wage concessions.

I think it is realistic to expect that some concessions will occur, although I absolutely agree with the stance that it should not only come from the pilots. However, now bear with me here, you have to at least be able to see mgmt's stance that you are Priority #1 for -some form- of wage concessions...you are by far the largest expenditure on the company payroll, and even with some wage cuts you could still be at the top. And they have the advantage of being able to put your furloughs back to work if A) the company returns to making a profit, B)has the ability to grow Mainline (NOT at the expense of DCI), and C) the flying public continues to fill seats.
This is just my 0.02, but I think that mgmt is dealing with your concessions completely independent of the other occupational workgroups in the company because they don't want to incite problems within the FA's/TechOps/Ramp Workers/etc and drive them to bring the IAM/Teamsters/etc onto the property. Mgmt has to be pretty happy that the only union in the company is DALPA, and the rank-and-file certainly must enjoy not having to pay union dues.

Obviously, the DALPA response will be that they will only accept concessions if they are evenly applied throughout the company, including upper mgmt and their golden parachutes/pension. Again, I agree with this stance, as long as it does not turn into another case of "Full Pay to the Last Day."
...Heck, what do I know, I'm just a pilot that wants to find the balance between having a job but not being paid $19.02 an hour in 2035 when I'm left seat in N880DA to RJAA. Good luck guys.

Regards,

ProLine4

PS- Speaking of RJAA (Tokyo-Narita), mainline's now down to 4 M11s? I think that's ahead of the schedule I read a while back. 801, 802, and 804 are supposed to stick around until January, by then they should have 3 of the 772ER's equipped with the OCRF.

 

[PositiveRate]

I know there's been a lot of CMR/DAL animosity on these boards, but I'm sure I speak for many when I say that I'm behind you 100%. Labor is an easy target...it's awesome that you are holding your ground. I don't expect or want to see anyone up at big D give a dime.

A first year MD with a specialty can easily make 200k+ right out of residency. No one bats an eye. You tell someone you're an airline pilot and they assume/expect that you make good money as well. What's wrong with demanding it as an educated and highly trained professional?! Screw this race to the bottom.

my 2 cents.

 

[P38JLightning]

Way to go big D!

Way to take a stand guys!

I hope everyone in negotiations (or about to be) in the Delta family and elsewhere have the brass ones the Delta MEC does.

You guy's response to management's shameless robber baron plundering was accurate, professional and right on.

This is one Comair pilot who is very proud of the way y'all are handling this, and I know I'm not alone.

 

[General Lee]

Proline4,

I was impressed by your response and you questions. You seem to be very well versed on this subject. I'll try to answer some of your questions---with my opinions of course.

1. Pay disparity between majors. Yes, we have a large pay disparity between AA and UA. Our 12 year 767-400 FO's make $30 more an hour than AA or UA 777 Capts. Some could say, "God Bless America" and be done with it. Delta never bought a carrier like TWA that helped drain AA, and fortunately we did not lose a plane on 9-11. We do not have the same problems as those two airlines, and we have had better liquidity than all of the majors. But, we do share a common problem---some major debt---that we will have to help fix, and that is why I still believe we will eventually give back some pay--in the range of 10-15%. But, as I have already stated, the union stated clearly that we are only a part of the solution, and huge Exec bonuses etc. will not happen when we take cuts.

2. Largest expenditure--pilots. That probably is true. We also are the only group with a union, and that means we pay monthly dues to protect ourselves. The other groups choose not to do this, and are open to pay attacks. We know that we are expensive as a group, and we were willing to give some back--but for a price. Hopefully this is all a big cycle, and things will rebound like they always do---but when that happens --can't we have back what we earned through contract negotiations? No says management---even though they continue to get huge bonuses and lots of options that make them very rich. We know this is a rough part in our industry, but what about when better times return? To say that the economy will never return or that business travellers will always buy cheap tickets is wrong. Nobody knows if that will be true---and if better times return we would like to have back what we negotiated.

3. The company has the advantage of putting furloughs back to work. Well, not really. We are trying to force them to put some back to work with grievances. We have a nO Furlough Clause that states pretty plainly that regardless of the state of the economy of profitability or UNPROFITABILITY of the airline, no furloughs. They have successfully used the war emergency clause to furlough a further 250, but since the war is over (according to Bush after he "landed" on the carrier) and the loads have returned, those 250 should return soon after we get that grievance trial going. The other 1060 will supposedly start to return when we reach pre-9-11 RPM levels. That is something that Delta has control over---but to base your business plan and return to profitability on the return of 1060 pilots is not very logical. Those 1060 pilots would not return all at once---instead in trickle form--maybe 60 a month etc. We also have been retiring quite a few lately due to the low GATT rate, which will eventually help.

4. I agree with your stance that Delta does not want any more unions, and that is the main reason they are not targeting the other employee groups. That is another reason why our airline is more efficient than other airlines---Delta can impose things on their employees that the other majors cannot due to contracts.

5. Full pay to the last day. I don't think our pilots generally think this way. We know that we are very well paid and have great jobs. We were willing to give some pay back, but with a snapback or contract extension. What is wrong with that? We didn't have to enter negotiations, but we did. We just added some reasonable limits---like an extension, not being the only ones to give, and not comparing us to the other majors that had more problems than we have. Management didn't like the "everyone should give including themselves" and said no way. Aren't we all in this together? They don't think so I guess.

6. Tokyo NRT. I thought we only had 3 MD-11s left, but it may be 4. I know that Dalpa is NOT giving in to management their request to delay the install of the 2 additional "Condos" into 2 more 777's for eventual ATL-NRT service. Those should be installed as the MD-11s are parked. I have ridden in the "upper deck" Condo in the sole 777 to Rome and I thought it was great. There are 2 first class seats with personal TVs and two bunks behind them, and this is all above the first class section of seats.

Well, I hope this helped and it will be interesting to watch where all of this goes. I want Delta to succeed and thrive, but just not off our backs exclusively.

Bye Bye--General Lee