Astar Pilots vs. The Dazz

[erichartmann]

Now this is the kind of detailed analysis everyone needs to read. You must have been involved with negotiations sometime during your career. I'm curious about the above statement specifically regarding assessment of parties' motives. Is the mediation board privy to the Dassberg letter indicating his intention to procede to endgame? If so, how would that influence their strategy concerning negotiations?

I would think anyone who is a member of a RLA bargaining unit (union) and who has paid attention to the general conduct of negotiations could draw the logical conclusions I have drawn.

I have no way of knowing if the NMB is privey to Dassburg's letter. I am not involved in either the Astar or ABX negotiations. If the letter actually exists, and was widely distributed to the Astar pilot group I would suspect someone has more than likely sent a copy to the NMB. If the letter was sent only to the Astar MEC/negotiations committeed it would depend on what their stategy is and whether or not they think letting the NMB know is to their advantage.

 

[erichartmann]

At first glance, one might think so. But I can't help but wonder if DHL Int'l isn't pulling some strings from the sidelines in this matter?

It's possible they (DHL) are trying to provoke a strike, so that they can claim default by Astar on the contract. That would, in effect, force the dissolution of Astar. DHL then writes a Dasburg and his investors a check for their "damages," The Daz retires early, and the others move on to other opportunities. Meanwhile, DHL enjoys labor rates for years to come that are half of what their competitors are paying.

What do you envision Dan? Maybe ASTAR gone and the immediate creation of a low cost replacement airline run by DHL under the cloak of Dasburgs imaginary ownership? Similar to what is happening now with ASTAR only at reduced rates? Or just making ASTAR go away with no replacement? Wouldn't the latter senario leave ABX free to break it off in DHL? Or do you think the dissolution of ASTAR would scare the ABX pilots into compliance?

The reality is that if either Astar or ABX were to strike they would be "breaking it off in DHL" as you so quaintly put it. At this point neither carrier can operate the whole system. OTOH DHL is now paying for the infastructure to run two carriers where only one is needed. I've heard estimates of anywhere from $40 to $80 million for that infastructure. Get rid of one carrier and you get to save that money.

On another note I haven't seen anything about Purple or Brown objecting to DHL's purchasing the max legal amount of Polar yet. I can think of several senerios to go with the current situation. None of them are particularly good for Astar. Some of them aren't good for ABX either. In the end I think DHL plans to wind up with one carrier, at least in the US domestic market, maybe worldwide. They have only to look to Purple and Brown to see the advantages. It simply doesn't make good economic sense to pay for two or more management groups where you only need one.

 

[Meat n the Seat]

"On another note I haven't seen anything about Purple or Brown objecting to DHL's purchasing the max legal amount of Polar yet. I can think of several senerios to go with the current situation. None of them are particularly good for Astar. Some of them aren't good for ABX either"

Maybe if you remain silent in the background, behaving yourself long enough, DHL will rid themselves of the overpaid and underproductive ASTAR pilots. Then these unwelcome invaders to ILN will be gone, all it will all be yours!!!! Muwaahaaahaahaa!

If we as separate pilot groups, represented by separate unions fail to pull our collective heads out and join forces, then we all will lose.

 

[GoABX]

Surely, everyone has heard the conjecture that Daz bought the the 72's so he would have an asset to sell for the asset sale to Hete. Only the needed qualified crews go with the planes and get stapled to the ABX list. Now Hete can run the system and DHL saves a lot of money.

But before the ABX guys do back flips here is another scenario.

Astar 72s and ABX 76s are bought by Atlas/Polar and the remainder of both airlines is $hitcanned. Sounds crazy until you see that AAWW has 2.5 times the market cap of ABXA. Toss in a little creative Astar-style financing from Boeing and the deal is easily done. So now only soft dollars change hands and Boeing will get to find the replacement for the 72 and 9. Plus if the foreign ownership laws change, DP only has to buy one neat little package at a predetermined price. Pretty cool huh?! Daz, Hete, AAWW and Boeing make money, DHL saves money, and DP instantly creates an integrated package at a discounted price. Only problem is 1/2 the ABX and Astar pilots would be screwed until the new kid grows into his shoes.

On a different note, at some point in our future management will test whether the two pilot groups will support each other. To do otherwise would be foolish...they have to at least try. If we fail the test, either one carrier is gone or we degrade to the eternal throat slitting you see at Polar/Atlas. My guess is if their true intent was to pull an Emery on Astar and close you down, they were incredibly stupid to tell you the plan rather than spring it on you at the last second. So odds are it is a negotiation tactic rather than a long term strategy.

Tactically it would be best for DHL to make any major moves after both airlies have contracts signed, during the 5 year quiet period. Neither side can presently move all the freight, so they shouldn't try any major screw jobs if one of the two teams are in negotiations and can maneuver to an impasse.

 

[Whistlin' Dan]

What do you envision Dan? Maybe ASTAR gone and the immediate creation of a low cost replacement airline run by DHL under the cloak of Dasburgs imaginary ownership? Or just making ASTAR go away with no replacement? Wouldn't the latter senario leave ABX free to break it off in DHL? Or do you think the dissolution of ASTAR would scare the ABX pilots into compliance?

Maybe a little of all of the above? I doubt that ABX would "break it off" in DHL, as by doing so, they would be breaking it off in themselves as well, at least in the long term. Simply having nice, shiny 767's on your ramp does not a viable airline make. Those airplanes have to be working, and DHL is under no obligation to fill them.

What happens when an airline has 50 airplanes, but only enough work to fill 5 of them? That's right, they sell them. It's not inconceivable that those new 767's that are so proudly hailed by ABX pilots as being "proof" that they're going to be around for a while might be transferred to other carriers. The big yellow airplanes will indeed be around, but not the jobs of flying them.

Trying to predict how this whole thing will turn out is impossible, given the numbers of competing and conflicting interests involved. The bottom line is that DHL's model for employee relations is NOT UPS or FedEx, it's Wal-Mart. And as long as their airplanes are moving on time, there's no incentive for them to address it in any other way. The union is adamant that there will be no officially sanctioned job action, no declared "war" with management, which is also as it should be. That's why I found it interesting that there were so many sick calls recently. Guerilla tactics can be very effective when fighting a much larger, well-equipped and well-entrenched opponent.

Maybe all this "intestinal distress" suffered by crewmembers recently has less to do with what's being served in the cafeteria and more to do with the bull$hit that's being served up by management.

 

[Whistlin' Dan]

At this point neither carrier can operate the whole system. OTOH DHL is now paying for the infastructure to run two carriers where only one is needed. I've heard estimates of anywhere from $40 to $80 million for that infastructure. Get rid of one carrier and you get to save that money.

Really? I'd be surprised if it was 1/10 of that. Why would it take 40 mil to run a company? You have one extra set of managers...a Sr. V.P. and D.O. at a couple hundred thou each, some training and administrative positions at anywhere between 25 and 100K, and some miscellaneous expenses. I estimate that the price for administering a 121 cargo carrier of this size, at least on paper, would be a little over a million.

That's about 2% of the total operating budget for the smaller of the 2 carriers we're talking about here. A mere 2%, for the assurance that the on-time rates will be as good as can possibly be expected, and to keep a second source of lift intact should I have the kinds of labor difficulties that plague their competition every 4-7 years. A mere 2% of your operating budget to keep some downward pressure on 100% of your labor group.

I don't know what it costs me to clothe and feed my wife, but if I could split the cost between her and a mistress that lived in our house (but slept in an adjoining bedroom) while incurring only an additional 2% penalty, I certainly would. Such an arrangement would probably cure a lot of her frequent nightly "headaches," as well.

In the end I think DHL plans to wind up with one carrier, at least in the US domestic market, maybe worldwide. They have only to look to Purple and Brown to see the advantages.

Oh, they've looked at UPS and FedEx allright! They see pilots making 250-300K per year, compared to guys doing the same job at Kalitta that top out at less than half that. They see retirement plans and stock options, "real" managers (as opposed to some of the clowns that dot the ILN ramp) who motivate, rather than bully, their employees into doing the best job possible.

They also see threats of job actions by those same pilots every few years too, usually when contractual matters aren't being addressed, and usually around the busy time of the year.

DHL has NO intention of consolidating their airline ops into one carrier. They've worked way too long and hard to keep them seperate. If they ever do decide to consolidate their ops, they'll do it in Europe first, where they've been operating a hodge-podge of carriers for 20 years.

 

[rotor&wing]

In the end I think DHL plans to wind up with one carrier, at least in the US domestic market, maybe worldwide.

sorry, i have to really laugh at that comment. it's obvious you haven't been around DHL too long. you better take a look at their operations worldwide to realize that will never happen.

 

[abxaviator]

Actually, John Mullen, two years ago, in discussing the 15+ year plan for DHL addressed the possibility that they may have to abandon the hodge-podge approach and move to a single carrier worldwide. He further stated that 60+% of the world express business is either to or from the US and with US ownership laws as they are a US carrier would be required.

 

[rotor&wing]

Actually, John Mullen, two years ago, in discussing the 15+ year plan for DHL addressed the possibility that they may have to abandon the hodge-podge approach and move to a single carrier worldwide.

plan? DHL have a plan? c'mon, DHL can't even tell you what they did yesterday, much less a plan for even next week. LOL

the fantasy that DHL will have one global airline, much less even one airline in the US is just that, a fantasy.

DHL is not FedEx, and it is not UPS. Nor do they want to be.

get over it.

 

[abxaviator]

Just beacause DHL has not let you or me know anything, to say a multi-billion dollar world conglomerate has no plan is sheer ignorance. I have NO DOUBT they have a plan, what it is and whether it's good, bad or indifferent to me, I have NO idea and very little if any way to affect the outcome. Kinda like ants in an ant hill in the yard, they don't know my plan to eradicate them and have no pssibility of affecting my chosen course. Hopefully we'll fare better than the ants.

 

[Whistlin' Dan]

Just beacause DHL has not let you or me know anything, to say a multi-billion dollar world conglomerate has no plan is sheer ignorance.

I disagree. Before there was a FedEx, before UPS was anything more than a (mostly domestic) package delivery service, there was a DHL, and it was the ONLY practical means of expediting stuff all over the world.

Each of the last 20 years has seen them lose a share of that market to the above named competitors. DHL's only significant bump in market share came as a result of acquiring Airborne Express, a company that was arguably the "Sam's Club" of overnight delivery services. And while DHL has been patting themselves on the back for the "growth" of their operations, they seem to have ignored the simple fact that the market itself has been growing at an explosive rate. Ignorant of the fact that it's been the rising tide that's been floating their ship, as well as all the others in the harbor, they've come to regard themselves as Admirals of the fleet. They attribute their dismal performance in both the financial and operational arenas to the acquisition of ABX and to the fact that they're still paying their employees too much. What they don't say is why those same problems haven't slowed their competitors growth or financial performance.

DHL is a slowly sinking ship, and anybody who is "tied off" to her will sink with her as well. At this point, it would take billions to turn this company into a viable competitor...billions that would probably be better spent investing into FedEx or UPS, or one of their subsidiaries.

Does DHL have a plan? Perhaps. The last place teams in the NFL, the NBA, and Major League Baseball all have "plans" for recovery. The "Three Stooges" usually have a "plan" for getting out of whatever dilemma they find themselves in. I'm sure that DHL, too, has a "plan." But in light of their past performance, whether their "plan" has any more hope for success than that of "Tampa Bay" or "Moe" to save their respective a$$es is highly debatable.

Losing market-share in an industry that you virtually created...losing billions in a market where your competitors are making billions...possessing one of the lowest-paid and de-spirited workforces in the industry...service levels at an all-time low...

Some "plan..."

 

[flyinboxes]

Now this is the kind of detailed analysis everyone needs to read. You must have been involved with negotiations sometime during your career. I'm curious about the above statement specifically regarding assessment of parties' motives. Is the mediation board privy to the Dassberg letter indicating his intention to procede to endgame? If so, how would that influence their strategy concerning negotiations?

He most certainly will be. He will be privy to ALL correspondence either at or away from the table.

 

[767pilot]

How are you predicting a release from mediation in March? I've never known a mediator to announce a release date months in advance.

Not only that, but I think this guy is forgetting just what a powerful tool the mediator has by simply putting the pilot group on ice as was done at UPS. All the cries of "another day of retro pay" and "no concessions on anything" go away real quick when it turns into "take this, or who knows when you'll have anything else"

 

[erichartmann]

sorry, i have to really laugh at that comment. it's obvious you haven't been around DHL too long. you better take a look at their operations worldwide to realize that will never happen.

From your posts I conclude you were either a long term DHL employee or spend a lot of time talking to the long term employees and have adoped their views of the company.

Two quick points:

1) DHL is now a wholly owned subsidiary of DPWN.

2) DPWN faces a changing marketplace in Europe and around the world. They have a plan to ensure their survival.

Actually the way this works is you establish a goal. You then develope a plan to reach that goal. Having both means you can measure your progress toward reaching the goal. If you are not making progress, or if your progress is not satisfactory, you alter the plan. Also, as the environment you operate in changes and/or you reach your goals or even realize your goal was based on false premises and is unachiveable you establish new goals, and new plans.

Personally I believe they have near, midterm, long range goals. I also think they have multiple plans or fallback positions to allow them to cope with factors beyond their control and/or changing events.

I thing they will gradually consolidate their airline operations because there are saving to had by doing so. That doesn't mean they will own the airline outright.

For now, my reading of the tea leaves is that Dasburg is getting ready to pull the plug on Astar with DHL's blessing. The 20 727's Dasburng bought will go to either ABX or Polar/AAWW. To a large degree I think which will depend on the terms of Polar's ACMI with DHL.

 

[rotor&wing]

>>>>Two quick points:

1) DHL is now a wholly owned subsidiary of DPWN.

2) DPWN faces a changing marketplace in Europe and around the world. They have a plan to ensure their survival.<<<<<<<<<<

Plan? PLAN? Well, it's obvious you are a new employee (contractor) to DHL and clearly don't understand how they operate.

Let's look at their "plan" since they have been a wholly owned subsidiary of DPWN.
1) Shut down a $300 million dollar, fully automated sort facilty in favor of a run down antiqudated one that is all manual labor, at best.
2) Move their sort operation to an airport in the middle of nowhere, with no available labor pools to draw upon.
3) At this new airport and sort operation, no roads to connect Wilmington to a major interstate for the increased trucking operations to support it.
4) Also at this new airport, no pipeline to supply jet fuel, thus adding even more expense.
5) A major ad campaign ($150million) just when the consolidation of the sort facilities hit, only to blow off many customers due to poor performance.
6) The infamous "C" containers, a one of a kind cargo system that requires special handling equipment, btw that no one else in the world uses.
7) Wilmington airport, or better described as "Designed for Failure".
8) A fleet of old fuel guzzling airplanes (both ABX and Astar)
9) Fire all your loyal hardworking employees in favor of cheap contractors.
10) Theft rate after the ILN move jumped 2500% (that's not a typo)

Actually, the list goes on and on.

Come back in 6 months and tell us all about the great "DHL Plan"........you'll be singing a different tune by then.

Trust me, been there, done that.........and I don't want the T shirt!