Delta Pilot's Pay Raise (part 1)

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--Sunday, April 25, 2004
Delta Pilot's May Pay Raise - "Let Me Sleep on It"
"What's it gonna be? Yes or No?

"Ahhh.....let me sleep on it and I'll give you an answer in the morning."
Meatloaf, "Paradise By the Dashboard Lights

Dear All,
This article is not short. But it covers alot of ground that affects every Delta employee - our families and our careers. Brevity is usually best, but in this case, our plate is full.
Table of Contents

Introduction
The May Pay Raise
What's Causing the Continued Paralysis?
-- The Pilot's View
-- What the Company Feels
ALPA's Alamo
Negotiate, Arbitrate, or Abrogate
The Fruitless Line in the Sand
"Deeds, Not Words" - John Morgado
The 2000 Pilot Contract
Delta Employee and Public Perception
The SERP vs. the Pilot's Pay Raise
What Has Jerry Done So Far?
-- The Positive
-- The Negative
Outside Analyst's Opinion
The Honeymoon Window
ALPA's Initiative's - Last Year and Present
The Numbers - Where Is the Disconnect?
What Is the Right Thing to Do? - Our Social Contract
Become That Which We Loathe?
Is Goodwill Dead?
ALPA E-mail Addresses and Phone Numbers
Conclusion
_________________________________________________________


Introduction

"Because a family must work together, we've got to be imbued with the same thoughts and the same ideals and the same ambitions and the same determination......if we are going to succeed." -- C.E. Woolman

The annual shareholders meeting has concluded. The message: Jerry is on a crusade to return Delta to profitability, re-establish pride in who we are both inside and outside, and resurrect what it means to be in the customer service business again.

Isn't it time we all shared these same goals?

Isn't this the leadership we've been asking to see come forward?

What follows in the paragraphs below is a continuing effort to help encourage understanding and negotiation between the company and ALPA for the benefit of everyone associated with Delta Air Lines. Both sides have valid points. We can't keep bleeding. I will cover many areas to help those who only have a little good information or a lot of misinformation.

In doing so, I leave myself wide open to criticism which I readily accept in a world where leadership and integrity should be a guiding light for all of us.

The immediate issue is the pay raise in May, but the concerns surrounding a deal between ALPA and the company loom larger as each week of paralysis passes by.

Pilots at other airlines are starting to label the situation at Delta as "ALPA's Alamo". The company and ALPA must consider not only the monetary value of a necessary deal but more importantly - the value of human capital which continues to erode from within.

The attitude and buying habits of the consumers we depend on have changed dramatically. If we expect customers to fly Delta or pay a premium for our product in select markets, we must provide both a real and perceived value to that customer.

Currently, we could be doing a much better job in that arena. This includes every employee in the company - not just management or the pilots. We all have a stake in making Delta Air Lines the best airline in the world. If we don't care about our own image and product - how do we expect anyone else to? Lesser teams with higher morale have consistently beaten superior forces. We all must pull together - from top to bottom.

On a separate but related note, the pilots would like to see ALPA conveying more information including the relative cost savings being offered to the company. If both sides honestly understand the severity of the problem, it seems odd they are so far apart on what is required to get healthy and return to profitability.

There are many differing opinions and confusion among the pilot group. The overall communication could be better. A Delta solution to a Delta problem doesn't tell us much. But then, maybe it's not supposed to.

Surprisingly, there are still heads buried deep in the sand. A reasonable man has to ask himself if the professional airline analysts, investors, and the customers who purchase our tickets are all wrong.

These articles are not written for the small handful of critics who take cheap shots in various forums which most folks don't visit anyway for obvious reasons. These articles are written for the thousands of pilots, fellow employees, retirees, and clients who don't have access to a source of discussion which tries to be fair, honest, accurate, objective, and reasonable.

What you don't see here are the hundreds of e-mails and phone calls I've received from fellow pilots, employees, and clients who appreciate the information they don't get elsewhere and sound ready to do what's necessary to be proud of Delta Air Lines again.
Leadership - the ability to guide, direct or influence people in a positive manner toward shared goals.

Greed - an overwhelming desire to have more of something, such as money, than is actually needed.
Stalemate - a situation in which neither side is taking any further worthwhile action.
The May Pay Raise
There are three primary reasons to rescind the pilot pay raise due May 1st.

1. We will be perceived as no better than recipients of the Executive bonuses.

2. It will create undue harm to a valuable social contract with our fellow employees.

3. Leaders should be helping our company - not hurting.
Let's look at these points and other major concerns from different angles - the pilot's view via ALPA, and the company's view via management:

 

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part 2

Let's look at these points and other major concerns from different angles - the pilot's view via ALPA, and the company's view via management:


What's Causing the Continued Paralysis



The Pilot's View



Two words - Leadership and Trust.
Two more words - Past History.

When Delta set the parameters to hire pilots they had a type of individual in mind they felt could be trusted to safely make wise decisions in unusual and potentially dangerous situations. There aren't many occupations where death is a possibility on any given day - regardless of skill level.

Additionally, at orientation, folks like Frost Ward used to tell new hires, "None of you were hired just because you're pilots. We hired you to be leaders and help keep this company running the way it should be - a breed apart from the norm."

Factors including bad weather, fatigue, terrorism, mechanical failure, miscommunication, and human error are real - not just mock scenarios in the simulator. Thus, the pilots need to not only be leaders but were also expected to be responsible, logical, rational, intelligent, analytical, mature, observant, methodical, reasonable, and trustworthy.

And one of the components that make Delta Air Lines special is that so many of our non-pilots have these same characteristics which they apply daily to other jobs besides flying.

(The wives of our male pilots would probably say, "Are you sure we're talking about the same guy I married?" and the husbands of our female pilots say, "I found her first and boy do I feel lucky. Who cares if she makes more than me?")

Why would these particular traits - sought after in the hiring process - cause paralysis during negotiations with the pilots?

In past history, the company has tended to express the attitude they know best and you should just trust us. They don't want the pilots to summon those same qualities they hired you for when it comes to negotiating pay, benefits, or work rules. Funny thing is, the pilots generally are cooperative and go along when the trust in any arena has been earned.

In reality - during the past couple CEO regimes - the trust has been violated and damaged in different ways - some obvious and some subtle. Now we've come full circle. The past attitudes or failed leadership of Ron and Leo are coming back to haunt the current attempts at resolution -- right when we need it most. There were many instances where the pilots were told by the company to go back to their room instead of building goodwill - at little or no cost - for future endeavors.

With the attributes listed above, this isn't a group that can be led anywhere without earnest leadership. There remains, even among the most conservative and loyal - a detrimental dose of skepticism and suspicion. The pilots know they need to make a meaningful contribution to help the company, but they don't trust the company to make good decisions with the money and work rules they are being asked to concede.

"Just give us the money and we'll take it from there." That approach alone doesn't instill any renewed confidence in sound management or place a value on your employees. Dictating demands may work elsewhere, but it's causing a stalemate here at Delta.

We would have a deal tomorrow if Jerry would promote a more cooperative effort. A 75-80% bite of the apple is better than none. We can't ignore the time value of money. The continued destruction of morale isn't worth the extra hundred million or two. In real terms, that's hurting us more than the debt load.

There is a perception by many that the company is trying to squeeze every last dollar from the pilots without first conveying a definitive, well-conceived plan for the future of the airline. Many pilots feel the timing is right for the company to seize the opportunity to get all they can from them, so they resist that perceived attack.



What the pilot's hear is this:



We need the money. You read the papers. You see what's happening in the industry. We don't have the income to support what we agreed to pay you. The marketplace is doing this to you, not us. Give us the cash now or suffer the consequences in the near future. It's all on your back. Everyone else has already given. The rest of world is inline except you. We need the money.



And much of that is legitimate, for the most part. But it is being dictated without leaving any room for negotiation. This really irks the line pilots. They aren't dumb. They do read the papers. They know the company needs the money to dig out of the hole we're in. But they want to see accountability and a plan before they agree to open their wallets, sooner than later.

To agree to a 20-30% pay cut, et al., the pilots want the company to define, "who are we and where are we headed" as a company, a team, and a competitor in this cut throat business. What is the plan to fix past mistakes, identify new opportunities, and get back on top where we belong? What can we see management do, in tangible terms, with the money?



Thus, we have a quandary which Jerry's leadership must bridge with ALPA's help -- to mend fences and re-build the kind of trust which rises above the classic struggle between labor and management.

 

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Part 3

What the Company Feels



We can't be all bad. We've been in business 75 years. Management has done something right where hundreds of other airlines have failed. We have provided a great career, benefits, and lifestyle for thousands of Delta employees. We have served millions of passengers safely. We want to continue that trend for another 75 years. We need your help.



Some of the things we do work out very well. Others don't. We aren't perfect. We made some bad choices. We forgot to first take care of our most valuable asset - our employees. We violated your trust. We damaged employee morale. We are removing the people who made those decisions -- for good. This is a new team who's listening and cares.



Jerry knows everything that went on behind closed doors. He knows what went wrong and why. Yes, Jerry was on the BOD when bad decisions were made, but some of his opposing advice wasn't taken. He has volunteered to fix our known problems. That takes guts to face the music and care enough to step back up to the plate. You wanted leadership. Now it's here, but some don't like the message or what it's going to require.

As CEO, he now has the powers to fix problems firsthand. You can't ask for leadership and then shun the man because you don't like the tough message or proposed resolution.

Give us consideration for the pay, benefits, work rules, vacation, medical, and retirement packages you have attained over the years. This is still a great company to work for and right now we need everyone to pull their weight instead of whining and complaining about how it used to be. This company belongs to all of you. And only you can help make it better.

Shouldn't all employees work together to make our product outpace the competition? Aren't we the ones who make it or break it on a daily basis? If you expect to make a living in the customer service business doesn't it make sense to provide good customer service?



We have a lot of variables we can't control like fuel prices, weather, deregulation, government taxes, rules and regulations, environmental and noise abatement constraints, FAA compliance, security costs and advances in technology that have kept a lid on pricing power.



We continually face challenges that make it difficult to offset and manage with enough foresight to make a profit sometimes. In many cases you'd need a crystal ball to see what was around the next corner -- ultimately affecting our ability to make money.



We negotiated the best contract our pilots have ever seen in the airline industry - bar none - and we'd have been able to live up to it if the economic bubble hadn't burst. On top of that, the weaponry used for the worst terrorist attack and tragedy in history was the same vehicle we use to support our livelihood. Who could have guessed?



This has always been a tough business to make a buck in - and it just got tougher for a number of reasons. The average profit we made per passenger in years where we made a billion dollars was $3.00 a head. Now we're losing that and much more. Even now, Southwest only clears about $2.50 profit per passenger. The margin of profit is slim.

We can't pay you what we thought we could anymore. We need your help to survive.


"ALPA's Alamo"

I don't know if our MEC and LEC folks had heard this label yet, but pilots at other airlines are starting to refer to the situation at Delta as "ALPA's Alamo". Additionally, Vaughn Cordle, a Captain at United and well-respected analyst of the airline industry has just written a commentary in reference to John Malone's recent editorial article in the AJC.

Captain Cordle says ALPA and the Delta pilots need to wake up to what's happening around them. The longer they wait the worse it is going to get. Deeper cuts via Section 6 will be the medicine the pilots are forced to accept, short of filing Chapter 11, if we don't get something done soon. Can we honestly keep pretending this has happened elsewhere, but won't happen here?

My estimate right now is the Section 6 opener from the company for the next contract will be over $1 billion dollars, which will include higher productivity and less bodies. The current offer on the table will look cheap in comparison. The guys/gals who will be hurt the most are the ones who got hired since 1996 due to the accelerated growth the 1996 contract promoted.

The bottom of the seniority list won't have to consider what their vote might be when they are no longer on the property. A judge isn't going to care either, since his only fiduciary responsibility - by law - is to the creditors - not the employees or shareholders.

Forget the idea the economy is going to somehow save us. There has been a seismic paradigm shift in our industry. Intelligent men and women should be able to acknowledge and do what's necessary to adjust.

If we don't come to the table and work this out with the company soon, including a contract extension, we are going to see a billion dollars or more come out of our present contract versus the current lower numbers. When that happens, the 1060 pilots on the street will stay there for years. Another 500-1000 could join them as the company shrinks the fleet, closes crew bases, sells assets, reduces block hours, and raises the cap to compete efficiently and return to profitability.

Will it stay that way forever? Probably not. But how long can the pilots on the bottom wait? Pick a number -- 3 - 5- 7 years? It's happened before.

And there's nothing that says once the company gets lean and mean again - that the next step won't be to acquire CAL and NWA - in that 3-7 year window. We can certainly make money in the U.S. and flying to Europe and South America. But if you read the 10-20 year projections the real growth is westward to China, India and the entire Pacific Rim. But that's a whole other article. And cargo is a big piece of the pie. I think the only things I own that aren't made in China or India are my home, a German car, and a lone Louisville Slugger. 777's anyone? Jerry?

If I'm wrong about the numbers the company can achieve in Section 6 or Chapter 11 - and believe me I wish in this case I was - I'll eat my Captain's hat - minus the hardware - in the Atlanta Domestic pilot's lounge after the next contract is consummated and inked. My only caveat is that I be allowed to cut it up in little pieces and have some hot sauce to go with my meal.




Negotiate, Arbitrate or Abrogate

Those who won't accept the harsh reality of how the marketplace has changed should brace for a letdown when our W2 gets adjusted - one way or the other - either by negotiated choices, a mediator/arbitrator, or a judge in Chapter 11. Of those three, which sounds smartest? One of those three gets closer each week.

The release of our 1st Quarter 2004 financial numbers are not a lie or a bluff. We have lost three billion dollars over the last three years. Our cash position has declined from $2.8 billion a year ago to $2.2 billion today. We are living on borrowed time and dollars.

Those who question things like the recent 1st Quarter funding of the pension plans don't understand why those obligations are funded when they are (ERISA law). Bottom line is we have additional obligations and cash expenditures due in 2004 - 2005 which are real, not fabricated.



This isn't a temporary downturn or cyclical bump in the road. There has been a transformation in the business model required to make a profit in our business. A paradigm shift has occurred and the only survivors will be those who adjust their cost structure and the way they conduct business in the years ahead.



The pilots can either be part of the solution or stand by at idle and watch the tide roll right over us with no say in the final outcome.



"Fix the problem, not the blame." -- Japanese business proverb

 

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part 4

The Fruitless Line in the Sand



Jerry is making it hard for the pilots to make the next move. They want to help but it goes against their will to give in to dictated demands.



We face a conundrum few ever expected during their careers at Delta Air Lines. The marketplace has been the driver behind the changes we must adapt to in order to regain profitability. The company has made both good and bad decisions along the way, but ultimately it is the marketplace that will decide our compensation levels and benefits.



ALPA and the company - along with all employees - share equal responsibility in getting our act together. This is our company. Only we can make it better.



With respect to current pilot compensation and the pay raise in May - both sides are at fault if the scheduled pay raise on May 1st is allowed to be paid out in the June 15th pay check. We still have two months to do something meaningful and positive before the next pay hike becomes effective.

ALPA has procedures they follow that include side letter agreements and various avenues that lie outside the normal paths. Cooperation in this case requires two interested parties who must agree adjustments outside the contract boundaries are beneficial to all concerned.

Some of our ALPA reps keep bringing up "protocol and procedures" as the reason for not getting something done. Personally I understand it, but to many observers, this seems like a cop-out sometimes. We tend to work harder when we really want something. We make convenient excuses when we don't.



For ALPA to propose we rescind the May pay raise, Jerry must also agree to accept it. Otherwise there can be legal ramifications which prevent getting a deal accomplished. Maybe we need to offer a resolution at the next LEC meeting or maybe Jerry needs to request publicly that we rescind the pay raise. Ideas anyone?



Jerry should soften the hard stance - which is hindering ALPA. Let's revisit these fruitless lines in the sand. Maybe if we displayed more leadership on our side we might force the company - in the court of public and shareholder opinion - to do the same.



Should we expect ALPA to negotiate against itself? On the other hand, the offer of 13.5% is disingenuous. ALPA knows the company needs more to be competitive.



Jerry should give the union room to maneuver. He knows he has the stronger set of cards and he's not bluffing - as suggested by a few. He doesn't have to - just look at the quarterly and annual numbers. But he's making it tough to encourage ALPA to make a significantly better offer by dictating it must be one way only. This isn't the best approach.



I know - we could go round and round about who blinks first, but I think Jerry wins a bundle of goodwill and support towards future needs if he could find it in his heart to back off a notch or two. If shareholders, credit agencies and analysts see $600-700 million on the table from ALPA, it would be hard to walk away from that offer.



Here's the increasing danger I see festering like a cancer - a redux of last year.



The silent majority of pilots are digging in their heels again at exactly the wrong time. However, their reasoning is understandable and must be recognized by Jerry. These are reasonable folks who have two primary, legitimate questions on their mind which have not been adequately answered.



(1) Why didn't the company come to the pilots sooner - post 9/11?



(2) Why won't the company take any money already offered?



In the meantime, in a few months it'll be three years since 9/11 shocked the nation. And many of the pilots continue to wonder - where's the sense of urgency if we are in such dire straits? An outsider looking in would find it hard to argue with these questions and perceptions.

If the company won't take a significant offer of several hundred million dollars, it sends signals to the pilots the company has or had an ulterior motive or plan. This may be why Terry Erskine "retired" early. It is possible Mr. Erskine promised he could deliver more from the pilots - maybe $1 billion - if the company stalled and waited for Section 6 negotiations. Maybe his tactics, style, or methods are not what we needed at this juncture.

Maybe Jerry is going to replace Mr. Erskine at the table with someone who understands pilots. That might bear fruit and help smooth over the line in the sand.


"Deeds, Not Words" -- John Morgado

 

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Part 5

Additionally, one can't ignore articles in publications like the latest Spring 2004 issue of the Roundup (LEC Council 47 in Dallas) - The authors make valid points that raise questions in any reader's mind. The challenge of "deeds, not words" is fair.



The articles by Chairman Rick Chabot and Vice Chairman John Morgado are straight forward and balanced. They highlight legitimate issues based on the company's actions to date. Traditionally, Dallas is infamous for having a base populated with militant hotheads - but the current regime cannot be accused of such. They clearly convey the need to help as well as anyone.

The DFW group was civil, concerned, and respectful during Jerry's road show visit in March. The Dallas pilots, like the rest of us, seek mutual cooperation versus a dictated hard line demeanor. Guys like Dallas' Chairman Chabot are level headed and he does an excellent job of providing informed guidance and representing his constituents well.



As more time passes, we look foolish on both sides for not getting a deal done regardless of the reasons why - whether they be personal, political, porous, or petty.



The 2000 Pilot Contract



Contractually, the pay raises were negotiated in good faith. ALPA's position appears to be that the pay raise on May 1st be paid on that basis alone. The tables have now turned. "A contract is a contract" is a similar sentiment being applied here. We've heard those words more often than we hear "Cleared to land."

When the 2000 contract was negotiated, times were still good. It added approximately $2.4 billion to Delta's costs over the life of the contract, but the company felt it could meet those obligations with growth. The country, the airline industry, and Delta were all experiencing one of the most prosperous times in our history. Shortly after that agreement was signed in mid 2001, the market place changed dramatically - post 9/11/01.

But an important point has been forgotten as time has passed. Even before the 2000 contract was actually signed in 2001, the economy was already slowing down and businesses in the U.S. and around the globe were pulling in their reins.

It was at this point the company started realizing they had hired 1000 pilots too many. They miscalculated the severity of the pullback in business travel and it kept getting worse after 9/11. The shift that would be required in the business model was already manifesting itself - and few, if any, saw it coming. It also allowed the Lower Cost Carriers to get their nose alot further under the tent.

Some pilots will argue the 2000 Contract was a payback for the 1996 contract - where the pilots felt they gave up alot. Many pilots did much better with the 1996 Contract - primarily due to growth and seat movement. Increases in pay were substantial. The average pilot's W-2 increased nearly 40% between 1996-2000 as folks moved up to Captain or gained more seniority with improved lifestyle choices.

We know who we are. We fared better, not worse, from the 1996 contract. As usual, much depends on what seat you were in at the time and when you were hired. These are dynamics we can't predict when pilots seek the airlines as their chosen profession. Lady luck plays an enormous role.



Delta Employee and Public Perception



Every interested party - shareholders, customers, creditors, analysts and worst of all, our fellow employees, are going to look at us with disdain if we accept the pay raise in May.



In addition to the social contract we have with our fellow employees, there is an additional responsibility - knowing how many families our inaction is affecting as more time passes without a solution. On that front, the company shoulders as much blame as ALPA - since both have the ability to be pro-active to secure a deal.



If the pilots accept the May pay raise, the perception will be: ALPA - which is all pilots - is using the company's apparent refusal to negotiate as an excuse to take more money now in anticipation of losing more later. This may not be the truth, but it will be the perception in many circles.

It's possible many employees don't understand how ALPA controls these actions on behalf of the pilots. Each pilot cannot arbitrarily call payroll and individually cancel the pay raise. The last time this was attempted by about 1500 pilots, the company was forced to give it back again due to labor law, etc.

One small group of elected union members (26 total - 15 of whom, vote) effectively control what the pilots do when it comes to pay, benefits, and work rules.

The May pay raise should either be rescinded or at least held in escrow. It's difficult for fellow employees to hear many of the pilots say they don't want to take the May pay raise in day-to-day discussions, yet the employees see no action taken in that regard. It makes us look like we are either just saying this to make them feel better or that we have no control over our own union.

 

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part 6

The SERP vs. The Pilot's Pay Raise



To be fair, it should be noted there is one distinct difference between the birth of the SERP (Supplemental Executive Retirement Plan) and the pilot's scheduled raises.

The annual pay raises included in the pilot contract were negotiated in good faith at a point in time where the outlook for the future was still bright. On the other hand, the SERP was conceived and approved after the company was already in trouble. We know the reasoning - to keep key management players.

Leo/Fred were able to convince the majority of the BOD that the SERP was a good idea, but most employees don't know why Leo was able to sway the Board. Here's a quick refresher. Leo's star was shining bright in Washington as the airline industry's rep testifying in front of Congress - a role other CEOs were glad he tackled. He led the charge. He was prepared, knowledgeable, and believable. Hence, Leo was very effective in the quest to secure further relief funding to help the whole industry.

Undoubtedly, this gave Leo additional clout with our BOD. The reasons they hired him in the first place were on full display before the nation. Emotions were still running high and there was much uncertainty surrounding the fate of the airlines. Leo's performance received kudos in many circles. We were proud he was ours.

Leo also felt a sense of loyalty to take care of his executive team as well - for their dedication both before and after 9/11. This would be a natural desire as CEO. Once you get past the anger and disbelief, you begin to understand how the BOD agreed to allow the SERP when they did. But they committed a crucial error.

What was forgotten was the loyalty to the total team - the 70,000 other employees. Thus, the trust and dedication of 70,000 was sacrificed for the temporary loyalty of 35 - a classic and horrifically bad decision. Additionally, credibility was shattered after we discovered the list of 35 earmarked for critical retention included eight attorneys and the president of the DECU.

What this accomplished instead was a monumental showcase of failed leadership - given the known circumstances. The crowning glory was the cartoon of the pig in the business suit with bags of money -- on the front of Fortune magazine with Leo highlighted in the cover story. We also now know it had little effect on retaining the executives it was designed to keep. Ironically - three of the main players - Leo, Fred, and Michele - are departing - with those protected benefits in hand.

Don't hurt your own credibility by saying the retention bonuses "worked" because they were only intended for two years. The mission was incomplete and we all know it. Any executive that isn't unequivocally committed to the welfare and employees of Delta Air Lines should leave -- tomorrow.

Thus, to equate the SERP on even ground with accepting a previously negotiated item is not fair to the pilots. The timing and circumstances of each were very different.

Given the history, here are two remaining problems we must get past and solve.



(1) First, we can't keep living in the past. The SERP is done. It's over. It serves no good purpose to keep harboring anger over the issue. Why drive the company into the ground because of past, ill-conceived executive decisions. I guess we'll show Leo and Fred how much we disliked their decisions by jeopardizing our own jobs. How smart is that?



(2) A second, more immediate real problem. The pilots and ALPA know the company is in trouble now. Given what everyone knows, the pilots should not fall victim to the same greed which ultimately drove the decision to accept the SERP. Let's not be convoluted or shade the issue with clever rhetoric. Taking the pay raise in May doesn't make any pilot I know feel good. And it shouldn't.

ALPA can light a fire under their protocol and procedural machine to either rescind the May pay raise, or place it in some type of abeyance. It would be one more indication of the pilot's integrity and sincere desire to return to the table to negotiate for the good of all.

Are we going to let this golden opportunity to be leaders slip away? I hope not - for the sake of the morale and internal spirit of the whole company. Here we are - all wondering what we can do to help turn the ship around and one of the biggest opportunities to start making a difference as leaders is staring us square in the face.


What Has Jerry Done So Far?

In a large corporation like Delta it can be hard to get "the word" out. Many employees do not visit the company website or view archived video presentations. Corporate letters are posted but seldom read unless it affects pay/benefits or offers new positions for employment.



Thus, what one group might observe or feel about their new boss never gets passed to the next office, shift or city. A certain buzz will develop but it takes time.



Consider the task at hand. I'll use the example of comparison with a new Commanding General taking over a Wing with numerous squadrons, support units, and administrative components - hence lots of faces and personalities to learn about.

Your first move would be to observe and listen. And then, you observe and listen some more. You must identify both strong and weak players. Some will put on their best face initially to gain favor while others are simply tired and can't hide for long. The unit needs fresh blood to re-energize the troops in those cases.



Regardless of their prior reputation, you must assess people's intensity and desire, shake hands, and look them in the eye. You never drill down to that level from a seat on the Board of Directors. Those who say Jerry carries a lot of baggage from the past 17 years on the BOD have very valid points but don't understand how the Board works - or doesn't work. Just look around the rest of corporate America. Running the company day-to-day is a completely different animal. Its too easy to sit back and criticize from afar. Would you want the job right now?



Folks say we don't have a plan yet and I agree. But what I'm watching develop so far looks like the beginning of a plan and a realization we must change the people first - then begin to execute the new strategy. We all agree we want to support and nurture Delta, but we need to know what our plan is going forward. The list that follows indicates to me that Jerry has identified key areas for attention.

Here's what we've seen from Jerry so far. I'll cover the positive first. Then the negative.




The Positive

Jerry is trying to put the right people in the right places.



He has shown a genuine desire to meet Delta's people face to face and answer hard questions. Employees have seen Jerry "walking around" more in the last three months than they saw Leo or Fred in the past five years. Meeting the employees was his first priority.

He told shareholders at the annual meeting in Atlanta that he is on a crusade to fix the problems and return the airline to profitability. Now the devil is in the details. Money, morale, and marketing. Good places to start.



He says our marketing efforts have been atrocious. Fred had more to do with this than most know about, but that's another story. My personal view is we need to market 50% internally and 50% externally. We need both our employees and our customers to remember who we are and the services we provide.

Our best customers are both outside and inside Delta Air Lines. I hope we never, ever forget that again. And I believe Jerry knows it, understands it, and can help fix it. He deserves our support for trying.



Jerry didn't sit at his desk to pour over the books and numbers first. He placed more importance on shaking hands with Delta's people. And speaking of his desk - he pulled Mr. Woolman's original desk from the museum. Now it's back in action. Maybe that's good karma. Can't hurt.



He is conducting a top to bottom strategic review. No stone unturned. No sacred cows. The big question which needs to be answered is: What business plan is viable and will work for the traditional hub-and-spoke carrier in today's marketplace? Jerry's strategic review will have no teeth if someone doesn't emerge from the review with that answer in hand.



He and Jack Smith visited ALPA's leadership early on in December. Members say they liked what they saw and heard.



The Road Shows with the pilots and spouses have shown a commitment to be accessible and face the music - allowing him to see/hear firsthand the frustrated and disgruntled masses. I attended the Road Shows in Peachtree City and the Cobb Galleria and read a detailed overview from both Dallas and Cincinnati. He didn't dodge any tough questions on bankruptcy, pay cuts, marketing, the industry, RJs, furloughs, SONG or other contentious issues. He has been honest and forthright.



He is the first to admit - publicly and point blank - the executive bonuses and lifeboat were a big mistake - huge.



He has turned down requests for increased pay from a couple senior executives. No exceptions. No one is irreplaceable. (This epiphany was clearly evident the first time I took leave in the military as a 1st Lieutenant and the Marine Corps didn't shut down).

 

[rjcap]

Good article.

Where did you find this ?????

 

[On Your Six]

Grinstein's approach is too one-sided and too forceful in my opinion. Clearly, cuts will be necessary and my sense is that the DAL pilots have indicated a willingness to work through the options. Grinstein's "take it or leave it" attitude is not helpful. Needed cuts will be made so long as there is a collaborative approach...

 

[spongebob]

DCI comments

While I assume this ranting was written by a DAL pilot, why is it posted by a DCI piot ?(InclusiveScope is DCI right?). Lots of comments on this issue from DCI guys. I keep thinking something about having a dog in this fight....

SB

 

[DaveGriffin]

No one but Delta pilots with senority numbers 4,500 or lower are allowed to discuss this topic.
By the way, spongebob's dog is blind in one eye, neutered and has three legs.

 

[spongebob]

re: Swab comments

Wow! First DCI guys advocating other pilots take a pay cut and now a squid whose claim is to JUMP out of those flying thingees makes a cynical comment and a lame joke. It is so sad that people concern themselves so much on what others should do.

If and when DAL pilots decide to contribute to the company (something no other group at Delta is even considering) it will be at their own time. They are still the only group at Delta that has volunteered to give money and this despite losing over 2500 members, 1000 to furlough. It would be nice for a change to see somebody like InclusiveScope recommend his group give a token 10% or DaveGriffin advocate baggage handlers or whoever he works for share in the pain... but alas all we hear is how much others should give.

SB

 

[acarpe3448]

First of all I would have loved to been able to stop the May 1st raises. I am in shock that nothing was actually done about it. But if we are talking about the contractual annual raises, I am sure that Inclusivescope would not even consider giving up his, not to mention give a 30% pay cut in addition. I can hear his explanation now

"We the Comair pilots do not feel that we should give anything back to the company, we were profitable last year to the tune of $100 million, on the other hand Delta is bleeding money. This bleeding of money is going to continue until the day that ALPA and the Delta MEC realize that scope is the answer to their prayers, all 70 90 and 100 seat jets should be turned over to us at once, we the Comair pilots will fly them for the highest wages among the regionals, we will hold up the bar, we will not give any pay cuts to the company. If anyone does not accept our position I will hire an attorney, and I Capt. Ford will forward them a 17 page internet post, and I will fax them a threating letter."

 

[TurboAWD]

I've said it before, but I'll say it again:

Mainline Delta pilots should WANT Commair/ASA (and for that matter, all DCI pilots) to make as much as possible.

I fail to understand how mainline pilots can complain about how crappy regional jet pilot pay is ruining the industry, but in the same breath want them to take pay cuts...

 

[~~~^~~~]

Acarpe, Dave and the other Delta guy looking at my butt ( On my six - what for? ) :

ASA is in contract talks, my last "raise" was in 2000. But, if I did get a raise, I would trade it for a seniority number. But your MEC said "no" to that idea.

So we ASA pilots can not really offer to give back a raise we never got and not really in a position to take one for the team, because you tell us we are not on the team.

In any event, wasn't your May 1st deal worth another 5%? I can almost guarantee that 5% is more than we will see in our contract, if we get a contract. Heck, we are still at an impasse over a seniority based reserve system.

Taking the May 1st raise, just as fuel prices, or 9/11 for that matter just makes the inevitable happen that much sooner. Good Luck - Full pay to the Last Day - and Remember the Alamo!

~~~^~~~

 

[jetstream]

A person making a six figure income can take a 15-30 percent pay cut and still be making enough to have a comfortable lifestyle. For those of us flying for the "regionals" taking any pay cut would put us in the poverty level. A lot of FO's are there already. How many pilots at major airlines have to work a second job to give your family a decent standard of living????

 

[XRMEFLYER]

How many pilots at major airlines have to work a second job to give your family a decent standard of living????

We all know the answer to that one already.

I fail to understand how mainline pilots can complain about how crappy regional jet pilot pay is ruining the industry, but in the same breath want them to take pay cuts...

Most of them don't. The private and her girlfriends here calling for such things are the exception.

Mainline Delta pilots should WANT Commair/ASA (and for that matter, all DCI pilots) to make as much as possible.

They do and secretly so does the private so long as it is still less than she makes so that she can hold on to that warm fuzzy sense of superiority!

 

[N2264J]

Re: Delta Pilot's Pay Raise

I can hear his explanation now "We the Comair pilots do not feel that we should give anything back to the company, we were profitable last year to the tune of $100 million, on the other hand Delta is bleeding money.

Well, that's all correct. Comair and ASA have a sustainable business model even in these, the worst of times. We were both making money while paying our own way as independants.

We're not the problem.

 

[737 Pylt]

what a rediculous thing to say!

We were both making money while paying our own way as independants.

YGTBSM!!

If you truly work for DCI, (Comair or ASA for that matter) where do you get off saying something as rediculous as that?? Just how exactly do you pay your way as independents??
Enquiring minds and all that..........
737

 

[ATR-DRIVR]

'rediculous'...

 

[acarpe3448]

N2246J

Comair does not have it's own business model. Comair flies where Delta tells them to go, just like we do at mainline. Comair gets a free ride on a lot of expenses thanks to mother Delta. I don't believe you pay any advertising, you pay no expenses for the reservations, you print no airline schedules, and you all are paid a fee per departure that guarentees you all a profit. I don't see anyone outside the regionals that are paid a set price per flight completion. Hell, from my understanding if you have a flight that is two hours late and you transfer all the passengers, yet still fly that segment under it's flight number, you all get paid regardless of the number of pax onboard, or lack there of. Same principal at Pinnacle, "give us all the jets we want and pay us a set price and we will make a profit."