Malone to DALPA: DAL demands "far exceed" needs

[MedFlyer]

I don't know exactly where the extra $1.5 billion will come from---but part of it will come from the employees, and then the rest will come from the lessors, vendors etc.


As far as managment's latest offer and then Malone's response---After the Malone response our VP of Flt Ops Joe Kolshack (or new VP title--VP Air Czar etc.) quickly wrote a response saying that a lot of the managment proposal was negotiable---and that none of it was "demanded." He stated that the only real thing they need is the $1 billion a year in savings, which is dictated by the marketplace. A lot of people think managment was taken aback by Malone's sharp response, but there are also people out there that believe that management knew this all along. Regardless, I still don't think that Malone would negotiate anything if HE KNEW that we were going to go into Chap 11 anyway. I also don't think that Grinstein wants to bring this into Chap 11--and he was just fishing to see what he might be able to get, or to see reactions to their proposals. I saw the proposals, and there are a lot of items that don't even have to be there. Others, as you can expect were there--like 35% pay cuts, 85 hour cap, 2 year seat hold on equipment, no cap on 70 seaters, no cap on INTL code sharing, sick leave reduction, per diem cuts, and others. You can bet that Malone will fight for guarantees on each of those---and there will not be any negotiations until Management comes done on many of them. And, before you Comair and ASA guys jump up and down about the extra 70 seater request--I bet they would go to the lowest bidder---which equals MESA.

This will be interesting, and I think Malone will get another offer from Management and then they will hammer out something. If not....we may take "another path"--and that wouldn't be good for anyone--management or labor.

Bye Bye--General Lee

General, I hope you are right and that mgmt and DALPA can come to an agreement. Right now, both seem pretty stubborn and neither seems to see the big picture.

I'm surprised you want the 70 seaters to go to MESA. I thought you wanted to give those to the furloughees...or have you given up on them? Of course, under your current contract, they can't go to MESA. Remember, MESA operates 90 seaters.

 

[General Lee]

Medflyer,


I don't want the 70 seaters to go to Mesa. You are trying to "catch me" here on something I have said in the past, and it is not working. Of course, I would like our remaining furloughs to get back into the cockpit and fly some NEW 70 seaters---that would be best case senario. But, with the bleaker tone set by the two parties---I also have to look at WORST CASE senario---and that would be total capitulation of the 70 seater clause. If that would occur--there is NO guarantee that Comair and ASA would get them---which is my point. Management would undoubtably look for the best cost savings---and that wouldn't be with your Comair pay rates. They would play you against the others (remember, Grinstein wouldn't even go to your meeting about possibly merging ASA and Comair)---and the end result would not be good for you. Mesa would probably be allowed to participate in the 70 seater DCI arena. As far as 90 seaters----from what I have been hearing from "sources" is that a 100 seater is more probable---and they would probably still use Delta mainline pilots---but at a huge discount. They would still have to negotiate--even in a Chap 11 situation---and ALPA's track record under stress has usually allowed the use of the mainline pilots--with reduced rates. Even a judge would find that reasonable.

I think there is still a good chance that this will be worked out---but in a classic negotiating ploy---Delta Management has put things on the table that shouldn't even be there---like reciprical jumpseat agreements with other airlines. Now, we will have to spend some extra capital to make sure we keep those same things. Classic. I honestly don't think management wants to take it Chap 11---but will if needed. It will be interesting. One thing is for sure---when Grinstein said the "P" word (pension)----that scared many many senior guys---and any change will result in many many early retirements. I talked to a NYC 738 FO last night that was hired in '91---and he said he was considering bailing (he was older--late 50s) to take some of his lump sum.

Bye Bye--General Lee

 

[MW44]

From CTS

"so be it???
So be it? You want Ch11? Guess you haven't looked outside your golden cockpit lately. US Airways and United pilots are two good examples. Even National airlines, oh yea, there gone. What about PanAm. Oh, they will never go out of business, well they did. Hope you have a masters degree and 10 years or more of good business management experience to even make half of what you make now. But from a comment like that, I don't have much hope. Sell the house in Nantucket, make up with the wife, get rid of the girlfriend, sell the Bentley, and learn to live with working harder and still recieving a $100,000 + salary. After 6 years when the contract expires and Delta is in the $$$ and the LLC have higher expenses get it all back. (well some anyway) The rest of the Delta employees have taken paycuts through Pension, healthcare, and more to be announced in September. You guys got pay raises during 7.4. This time it is serious, fire you stupid MEC and get one that understands the current state of your airline. I know, I know management gets paid to much to right?
http://forums.flightinfo.com/images/statusicon/user_offline.gif "



That was funny CTS. The lifestyle you just portrayed takes a heck of a lot more than 200k per year to afford. In this day and age 200k per year is not huge money. Not even close. It certainly won't buy you a house in Nantucket, a Bentley, etc.

 

[DaveGriffin]

Seniors suk

Whatever happens, BK or new contract, the juniors lose big time and the seniors end up having the best three years of their careers and bailing out. The early retirees are no better than Leo. Take the money and leave the rest of the crew dumping the lav.


When the furloughs hit the conventional wisdom from the seniors was “we stick to our contract, no concessions like the second class sissies at AirTran, and when the juniors come back, they come back to a quality pay scale.


Wrong!!


The time since 9/11 have been a bust for the juniors and a windfall for the seniors. The only thing the juniors got was Secret Santa, COBRA and the lawyers made a pisspot of $$ pleading the losing grievances.

What really pisses me off is that the FM I grievance was total BS. Dues down a rat hole.

 

[General Lee]

Dave,

A lot of what you said was true. But, there was not much we could do INITIALLY for the first bunch of furloughs---since 9-11 did affect us. As soon as it was apparent that it was time to bring them back--we did. Those senior guys did get the best three years for their retirement---and that accounts for the current Captains that are NOT leaving. They now have their 3 best years--and will $uck it up and help bring back the current furloughs. They are now in it for LONGEVITY. They have their three best years waiting for them. The junior guys will come back and pick up the scraps, knowing that we will still have fairly good pay flying nice planes to nice cities--and that others will have it worse. Then, we will have a few more contract negotiations in the future to try to get back what we HAD. It's a bad cycle.

Bye Bye--General Lee

 

[DaveGriffin]

Dave,

A lot of what you said was true. But, there was not much we could do INITIALLY for the first bunch of furloughs---since 9-11 did affect us. ........ It's a bad cycle.

Bye Bye--General Lee

I appreciate your agreement GL, but that doesn't excuse the self-serving nature of the seniors. They will take anything and everything they can get away with.

The 100% paycut of the juniors versus three BEST years ever for the seniors is inexcusable.

 

[FLB717]

Dave,

Pilots are like Aligators, they eat the young.

 

[miles otoole]

From some PM/MMs on DL board at Flyertalk.com, FWIW

Join Date: Jan 2003
Location: TYS - DL PM/MM
Posts: 210


"We made this proposal because the Delta pilots understand the seriousness of Delta’s situation"
----All evidence to the contrary

"management's latest offer "gut job security,"
----Poor things. Who on this board, or in the economy today is guaranteed job security?

new "B-scale post-retirement medical plan,"
----Obviously Mr. Malone does not read the papers. Most retirement medical plans, for those lucky enough to have them, are being cut

"address our equity requirements and make other stakeholders participants in a comprehensive restructuring"
-----I guess Mr Malone skipped over the part of the latter addressing this topic. Another example of Union myopia.

As I am no longer a shareholder of DL, I hope it goes into BR and the pilots wages are decimated. With this position from the ALPA, BR would be best for DL.


Join Date: Oct 2001
Location: Washington, DC, AA EXP/MM, NW Plat, UA PE, DL GM...but now still PM, no just General now, might still be GM later...but DEFINITELY not $.01 more to DL
Posts: 1,069


Standard ALPA playbook...the pilots will choke this goose until it is walking up the courthouse steps to declare BK. Then, miraculously at 11:59 p.m. a 'breakthrough' will be reached.

If management is resolute enough (jury is still out on Grinstein) BK is almost a more atractive option for the company - not for the workers or shareholders - so they can really correct inbalances in the workforce that are so out of whack with reality.

BertBamboo vbmenu_register("postmenu_3082203", true);

Join Date: Jan 2001
Location: ATL, GM
Posts: 421


Quote:
Originally Posted by CoMooter
Standard ALPA playbook...the pilots will choke this goose until it is walking up the courthouse steps to declare BK. Then, miraculously at 11:59 p.m. a 'breakthrough' will be reached.

If management is resolute enough (jury is still out on Grinstein) BK is almost a more atractive option for the company - not for the workers or shareholders - so they can really correct inbalances in the workforce that are so out of whack with reality.


CoMooter has it pegged. It's a high speed game of chicken and the winner will be the party that has the least to lose. I believe that the pilots will blink first and DL will avoid BK.

Two of my neighbors, both senior DL pilots, have been unusually quiet for the past 45 days. Usually they are quite the union firebrands. I think the implied threat by GG to their pension has them a bit rattled.


Just some

 

[DLslug]

Dear Miles O, and et. all:


What??

Sometimes we all get lost on the road.

#1---Pilots will take major pay cuts and work rule changes.

#2---We don't like it, but it will happen. Every Delta employee has and will be squeezed further.

#3---Nobody lives extravagently as described earlier. Most are just raising families like eveybody else with a beat-up minivan with french-fries on the floor. My kids are the one's taking the cut, not me.

#4---I am, and many others are willing to do whatever it takes to make this work out the best for everyone.

IF YOU THINK ANYONE WANTS TO TAKE THIS TO BK, YOU MISSED IT!

Every other pilot on this forum should be in tears to see a great and potentially lucrative career that we have all worked very hard for going down the tubes. We'll stay employeed, but not what we hoped for when we all started.

All for now,

DLslug.

 

[Jim]

http://atlanta.bizjournals.com/atlanta/stories/2004/08/02/daily50.html



Delta responds to ALPA's blasting of its concessions proposal



Delta Air Lines Inc. responded late Aug. 4 to the Air Line Pilots Association's ripping of Delta's July 30 call for $1 billion in cuts and claims Delta's proposal seeks "exploit the current situation and attack our profession by destroying our contract."

Delta Chief of Operations Joe Kolshak sent an e-mail memo to Delta's Flight Operations Leadership Team, stressing the airline is still open for negotiations with its pilots, who are the industry's highest paid.

The text of Kolshak's memo follows:



DATE: August 4, 2004

FROM: Joe Kolshak

RE: Malone Letter

Today, John Malone issued a letter to the pilots in response to the Company's proposal seeking $1 billion in annual savings, in combination with reductions from other stakeholders, needed to regain long-term viability.

Appreciating the role you play in communicating with our pilots, and the questions this type of letter will generate, I wanted you to be aware of the facts and provide you with guidance on how best to respond. I've spoken directly about these issues with Scott Kruse, the Company's chief negotiator, so you may have confidence that you are getting direct and accurate information.

This is not a "take-it-or-leave-it" process. There were no "demands" made, other than achieving the minimum $1 billion in annual savings - which has been set by the marketplace. This is a negotiation as to how best to achieve the needed savings for viability, not a "take it or leave it" process, and to suggest otherwise is disingenuous. Jerry [Delta Chairman and CEO Jerry Grinstein] stated clearly in his letter to pilots last week that how we achieve the necessary savings would be done collaboratively with ALPA. The company's negotiating team is operating on this collaborative principle.

There was and is no intent to be punitive or to affix blame. Without going into too many specifics and getting ahead of the process, several examples illustrate this:

• Jump seats: For heightened security reasons post 9/11, federal law has been changed and supercedes our contractual language. Though the negotiating team inserted language to reflect current law (limiting access to active employees), no change to the current jump seat policy has been recommended. The Company also stated its desire to discuss these issues based on ALPA's request for jumpseat enhancements while mindful of the new security environment.
• Disciplinary protection: because the very rare bad actors adversely affect other pilots and ALPA as well as the company, we thought it was in our mutual best interest to revert to the prior contract's language on the lookback period [3-5 years] for discipline. However, we are open to discussion on this subject, like others.
• Changes that add costs or restrict the company's ability to generate revenue: Limitations on profit sharing with foreign carriers and code-sharing with other carriers, regional jet employment, and anything else that limits our ability to become viable must be on the table for consideration. Again, it's not intended to be punitive; it's simply reflective of the marketplace and the financial situation we're in.
• The Company's proposal for a flexible cap to 85 hours is to enable pilots to make up some of the pay loss from the pay rate reduction, and likewise other changes would allow reserves to fly beyond the 65-hour guarantee.
• The Company's proposed changes to post-retirement medical benefits are not a "B-scale." They simply conform to benefit plans that non-pilot employees have.

There is a real commitment to provide an upside. Jerry gave his personal assurance in writing to pilots that the Company "is committed to the principle that the people of Delta must have an opportunity to share in any success their sacrifice helps makes possible. As he communicated, "we are already working on a combination of equity, profit sharing and some type of incentive tied to productivity." The Company gave ALPA a profit sharing proposal in January, and last Friday told ALPA it was developing a new profit sharing plan and an equity plan and would have the new profit sharing plan to them shortly. The Company reiterated to ALPA its commitment to both. Because of the comprehensiveness of the plans being considered, some components of the equity plan cannot be finalized without Board and shareholder approval. This has been communicated to ALPA.

We agree the pilot group alone cannot save Delta. Again, as Jerry assured in his letter: "Other stakeholders will be a part of the solution." We are working hard to restructure debt, renegotiate aircraft leases, and reconstruct our relationships with vendors and suppliers. Disclosing particulars at this sensitive stage could have real and profound negative repercussions - it simply would not be prudent to do it.

We share common ground. We respect our pilots. We both share the goal of preserving the pilot profession and the careers of Delta pilots - and all of our employees. And we will continue to conduct our discussions with ALPA in a businesslike manner.

As Jerry stated, "as we tackle together painful and difficult issues, there are few good options and no easy choices." This isn't going to be easy, and it must be kept in perspective. Management's motivation has always been and remains to avoid bankruptcy and rebuild a viable airline. We are working hard for an out-of-court solution. Smart planning, good faith negotiations, and responsible leadership are required. So, too, are cool heads and cooler rhetoric. I know I can count on you to conduct yourselves accordingly.



Talk about "spinning" the facts. Escepially the one about raising the cap as a benefit for the pilots.

Let's see...take away offline JS and cause restrictions in DAL pilots ability to JS as a side effect. So much for commuting - but wait - since they are working more to offset their pay cuts they won't have time to commute. Oh, I forgot, since they are giving away their job protection by abandoning scope, they won't have jobs so the whole JS/commuting/pay cap thingee doesn't matter any way. Yes the senior ones will be affected too - since they are going to get fired for offenses from 5 years past or die from lack of health care immediately after they retire.

 

[General Lee]

Jim,

This memo was originally dated July 13th, and then was changed to Aug 4th. Hmmm. Sure, it seems interesting---and I think Dalpa can see through a lot of it. The jumpseat thing is ridiculous. We won't give that up.

DLslug,

You are correct as always. We won't take this ship down--someone else will. We will sacrifice to get it done---and it may be the last night too. This may be another way to squeeze the creditors also.


Miles,

Re-read DLSlug's post. He is correct. Not many of us live with extra cars and huge boats----maybe a few at the top with 30 years at the company---and they should be gone now. You should be sad that the days of making a great living with extra money to possibly spend after the bills are paid may be coming to an end. If the other employees are jealous at Delta---maybe they should have gone through flight training also.

Bye Bye--General Lee

 

[USCtrojan]

Ch. 11

You guys missed my point. Five bucks says they're going to be filing Ch.11 regardless of what the pilots give back. If you're going anyway, hold on to the cash as long as you can.

I agree with ferlo. Has anyone considered that maybe GG's "new" plan involves "restructuring" in bankruptcy? This way he needs no cooperation of labor. He needs a judge, but I'm certain labor will have no impact on that. Ch. 11 here we come.

 

[InclusiveScope]

So ASA and CMR are part of the problem?

Here are comments from the DFW DALPA LEC newsletter. I'm sure the General will clear this up......

"Delta Goes to Bankruptcy Court" - A fictional tale
[This article appeared in the last issue of the DFW Round Up, before Delta's pilots offered their latest concession package.]

Judge: Ok, let’s get these proceedings started. I understand you are the attorney representing Delta Air Lines, and that Delta Air Lines is seeking protection under the chapter 11 of the federal bankruptcy code. Is this correct sir?

Delta's attorney: Yes your honor. Here are the required documents and evidence.

JUDGE: As you are aware, in order to grant bankruptcy protection, the law requires that your company must have done everything reasonable in its power to prevent a declaration of bankruptcy. Furthermore, this court must be presented with a viable business plan to ensure this situation does not happen again. I must now review actions by Delta Air Lines leading up to this situation. Please state your case.

DL: Your honor, for the past three years, Delta has suffered major financial losses and a dramatic increase in debt. We are now in a position whereby we cannot pay the debt service given our current revenue and costs. We feel, the primary culprit of our financial situation is pilot salary costs and we seek relief from the pilot contract.

JUDGE: That's it? Just the pilots?

DL: Uh, yes your honor.

JUDGE: Well looking at your quarterly financial reports for the past 7 years, it appears you have let your debt level to swell up to around 20 billion dollars, which causes roughly an annual debt service of a billion dollars per year. So I'd like to see where all this debt came from. First, I see that your company engaged in a 2.5 billion dollar stock buyback program. How much is this worth now?

DL: Um, virtually nothing.

JUDGE: You also spent over 2.5 billion dollars purchasing Comair and ASA?

DL: Yes. Both these companies were subcontractors of ours previously. In the case of ASA, there was quality control issues we felt could be better managed if we owned them. As for Comair, by outsourcing to them so much work, we allowed to become a monopoly in our Cincinnati hub. We were afraid they could become a competitor, or be purchased by one of our competitors.

JUDGE: OK, I also see that your management then went on an aircraft spending spree, buying hundreds of regional jets for your Comair and ASA Delta Connection division at a cost of an additional few billion dollars. I hope these planes are a wise investment. Are they are cheaper to operate?

DL: Well not exactly. These regional jets have a seat cost of around 16 to19 cents per seat mile whereas our existing mainline jets cost about 9.5cents.

JUDGE: So then I hope they attract more passengers. They are more comfortable, right?

DL: No, they are smaller, offer no first class, no overhead storage, and you have to be a contortionist to use the lavatory. But they sure beat flying a turboprop. We believe we can we create greater demand due to higher frequency when we replace mainline flying with these jets.

JUDGE: So you offer more of a product your customer doesn’t truly prefer?

DL: Yes, but they are profitable.

JUDGE: Well how can that be when they cost almost twice as much to operate?

DL: Oh that's easy. Delta mainline subsidizes them by purchasing their airplanes, paying for their facilities, providing marketing, as well as reservations, distribution, etc. etc. Basically, we pay all their fixed costs.

JUDGE: Well how would Delta mainline be doing if Delta Connection was actually paying their own expenses?

DL: Well it doesn’t matter, we are all one big company and all the money goes into one big pot, so to speak.

JUDGE: Then how do you know if the regional jets are truly profitable?

DL: Um, I'll have to get back to you in about four to six weeks on that one.

JUDGE: And if all your money goes into one big pot, how is it you figure that your mainline pilot costs are your problem?

DL: Look, we need to get our costs down and this is the easiest expense to go after, OK!

 

[General Lee]

I read that two months ago. That was great.


Bye Bye--General Lee

 

[DLslug]

InclusiveScope:

I did'nt see this one...really funny.



Hey General, thanks. I was just trying to make a point and I guess we are on the same page. Cheers!!

All for now,

DLslug

 

[General Lee]

DLslug,


No, you and I could be brothers! Take it easy.


Bye Bye--General Lee

 

[DaveGriffin]

DLslug,


you and I could be brothers!

Bye Bye--General Lee

GL and DLslug, take it outside dudes, this is NOT a gay chatboard.

 

[General Lee]

Dave,


This isn't the Navy! And I didn't say we were "buttock" brothers! But hey, I do work out!! (alone) (with weights----man, I have to always put these extra clauses so people don't get the wrong impression)


Bye Bye--General Lee

 

[DaveGriffin]

Dave,
I do work out!!
Bye Bye--General Lee

I knew it. You and DLslug need to get a room.

 

[General Lee]

Dave, you make me laugh....Thank you for that. Time to get into my jammies....Oh, I shouldn't have said that....


Bye Bye--General Lee

 

[michael707767]

Heard from a friend that one of the concessions the company wanted was the cockpit jumpseat....... What the heck is that about?? What does eliminating the use of the cockpit jumpseat have to do with returning to profitability?

Just my humble opinion, but the part about the jumpseat was a counter to ALPA's request for jumpseat flowback. In the end, we will end up with exactly what we have today