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Mike Stark on Delta's situation...(Part I)

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SoBeFlyer

Member User
Joined
Apr 21, 2004
Posts
55
Recently forwarded for information to DAL Flight Attendants, and written by Mike Stark - a mid-career, Delta 767 Captain and independent financial advisor has written several essays of interest to all Delta employees.

Dear All,
All truth passes through three stages.

First, it is ridiculed.
Second, it is violently opposed.
Third, it is accepted as being self-evident.

-- Arthur Schopenhauer (1788-1860)

Sometimes a leader needs to say, "We made a mistake. Now let's fix it."
Those simple words can go along way towards healing.

Having followed our plight closely since 9/11, I now ask, how is it
possible we don't have a deal yet? It felt like we were finally getting
close. Why chance alienating the entire pilot group when the pump was
finally primed for action? Folks who I've watched remain calm over the
past three years were truly upset and disappointed by the latest turn of
the screw.

How many family's lives do we continue to adversely affect with each day
that passes?

Everything written in this space has been to help provide information to
those who refuse to believe Delta Air Lines could fail or file for
Chapter 11 protection. And in particular, many of the good people we
serve as clients have appreciated a balanced voice on their behalf.

Again, I am not pro-ALPA. I am not pro-management. I am pro-Delta like
most of us.

_____________________________________________________________


What Happened Last Week?

If Flip Wilson were still alive today he might suggest, "the devil made
me do it".

Last week we all witnessed a crescendo of frustration by both ALPA and
the company. Captain John Malone's letter to the pilots was strewn with
anger from beginning to end and rightfully so. The company was suddenly
piling on, thereby derailing the fragile process of good faith efforts.
The response from management was equally pained with pent up frustration
as Captain Joe Kolshak's memo tried to soften the angst with some quick
damage control.

You can couch this any number of ways and point fingers at different
folks, but the truth is, ALPA and those in positions of power - have
squandered the opportunity of time. There is no one else to blame
except ourselves. We rolled the dice and lost. It's gotten worse, not
better -- with the high price of fuel, decreasing yields, tougher
competition, and greater cash outlays than anticipated.

Between January of 2002 and January of 2004, the pilots and the company
had ample opportunities to reach an agreement and enable us to remain a
serious competitor. The concessions would have been less, bankruptcy
wouldn't be an issue, and we would have been focusing on our customers
and the competitive marketplace vs. infighting on the inside. But there
is no sense in dwelling on the past. We must look forward to solve our
issues.

Now the pain will be greater or suffer the dire consequences of even
higher concessions in bankruptcy - on the order of $1.2 billion+ -- if
the industry analysts' assessments are close and United, USAir and AMR
are any indicator. Like Evita; the creditors, investment bankers,
lawyers, and debtors-in-possession will cry not - for the pilots. Nor
will Congress, the White House, or most American households.


The Tipping Point

We are at the tipping point. We lose if we file Chapter 11. Every one
of us. Not because of events and issues we didn't see coming. We will
be losers because we waited so long to take positive action - choosing
instead to play the usual, age-old politics of labor vs. management
while Atlanta was burning - for the 2nd time in its history.

Neither side should expect to get everything they want. Otherwise, we
lose far more of the intangibles - spirit, dedication, camaraderie,
respect, and determination. What have we learned from United, USAir,
American, Eastern, Braniff, TWA, and PanAm and 150 others who have
tanked since Southwest started flying in 1971? Nothing? Anything?

Our competitors love the fact we can't get our act together. Every week
that passes provides the opportunity to get the noses of their aircraft
a little further under the tent. At a time when we should be motivated
to work together against our competitors, we are competing against
ourselves -- and stumbling miserably.

Our cash position is precarious and dwindling. We now cannot weather
another terrorist attack, higher oil prices, increasing competition, or
a downturn in the business cycle. We need deals with everyone and we
need them yesterday. The pilots' contribution remains the biggest
chunk. Others must join the effort but the pilots clearly should lead
the way. The right stuff means little if we can't do it when needed
most.



Clarity

We need clarity and definitive leadership from Jerry and ALPA and we
need it now.

Jerry came to us and said point blank, "I'm your last, best hope." Guys
like myself have laid it on the line and supported Jerry's position in
the hopes of getting a deal sooner than later. Now we discover some of
the company's shenanigans at the bargaining table and look like fools
for trying to afford Jerry the trust and support he needed.

The company must stop the perceived gamesmanship. I realize they hired
a tough negotiating firm and you can't fault them for that - but maybe
it was a mistake in this environment. Maybe we just needed Jerry
himself to make the calls, re-build the trust, and follow his gut
instincts with some help on the inside from folks who understand the
airline business and the pilots.

In the same breath, ALPA has to be straight forward with the pilots
about what's required to survive -- in terms of both dollars and bodies.
Are we negotiating the whole contract or just trying to concede the cash
to avoid a crisis? Are we truly trying to get a deal done or not?

No more games. No more posturing. No more rice bowls. No more egos.
No more slick negotiating tactics. No more psychological warfare. We
understand the problem.

The company is killing every ounce of trust and hope that remains among
the pilots - at every level. And the rest of the employees are feeling
heavy, increasing stress from the day to day uncertainty. Who here
thinks this is healthy for company morale?

It's unconscionable that we are willing to accept the destruction of our
proud culture - 75 years in the making. Long term success comes from
companies with a shared set of values, customs, and beliefs that have
been nurtured since the company was founded.


An Honest Broker

Delta's pilots can handle adversity if dealing with an honest broker.
They are a resourceful group of scrappy survivors - many of whom have
faced much greater life threatening challenges in military service to
their country (and spouses). They do the right thing when needed. In
fact, that's precisely why they were hired in the first place.

(Continued)
 
Part II

It is inconceivable what is taking so long. What are the real
motivations and expectations? Why continue to joust and damage the
trust with petty deal breakers?

The pilot's wages are too high. OK - we all agree - and they are going
to come down dramatically, somewhere between 25-35%. It was nice while
it lasted, but the market doesn't -- and won't -- support those levels
anymore.

But don't come out and praise the pilots for the past seven decades as
the best in the business with every letter from Ops and every Chief
Pilot and then say they now need to get used to being paid in the middle
of the pack.

Do we also seek mediocrity in performance, productivity, and safety?
We'll get it -- and more -- while dismantling the best airline in the
business and the spirit of its loyal employees - in every position - not
just the pilots.

We are losing excellent people we never thought would leave. And I
don't mean the executive corps shown the door by Jerry. I'm talking
about the folks we all know who make the machine hum from day to day
with their work ethic, attitude, and knowledge. Who can blame them? Is
that what we want? A company-wide drain of the best and brightest while
we horse around and act like spoiled children - with an odd sense of
entitlement?

Is the company also angling for union busting? I don't believe so. But
ALPA may unwittingly choose that path by leading the Delta pilots to the
slaughter house where we will find even higher concessions, more
furloughs, gutted work rules, and a loss of key retirement benefits via
Chapter 11. Maybe the pilot group will look around after it's too late
and question if it could have been handled differently.


AMR, UAL, or USAir - Choose Your Poison, But Choose It Well

This shouldn't be hard to assess. There are three current and very
transparent models to choose from - American, United, and USAir. Which
one looks best? -- while we still have a choice to control our own fate.


Consider the following items below as a minimum we can expect if ALPA
and the company fight the good fight all the way into Chapter 11. It
won't matter who gets to the debrief room or the whiteboard first.
There will be no winner and here's why:

1. One of the largest shareholders of Delta stock is the employees via
the 401k. If we file for bankruptcy the stock value goes to zero. A
kick in the teeth we didn't anticipate.

2. The creditors, lawyers, and investment bankers will ask the court
for over $1.2 billion in concessions from the pilots and probably get
it. No? Then USAir, United, and AMR must have completely different
cost structures and business models.

3. The pilot retirement plan and work rules as we know them today --
will be gutted.

4. 500-700 more pilots will be furloughed on top of the 1060. Do the
math. Explain how we raise the cap to 85 hours, double the reserve
utilization and expect anything less. This should not be a secret no
one is willing to acknowledge or talk about. It is the reality we face
and must deal with instead of pretending it will go away. Delta is not
on Santa's route this year. Get competitive, grow the airline - and it
gets better sooner - but not before.

5. If another wave of senior pilots sense Chapter 11 is imminent with a
potential loss of the Lump Sum they will exit the pattern swiftly,
leaving the viability of the flight schedule in jeopardy. Aircraft will
be parked and passengers will bookaway. Both Jerry and ALPA need to
assure the group at the top - 55 and older - that their current planned
benefit is not in danger -- with no BS or caveats -- and they need to do
it very soon. September 1st is fast approaching and guys are getting
increasingly nervous with each news release or rumor.

6. If the gap between the company and the pilots is a few hundred
million - why are we willing to spend the same $200-300 million on fees
for attorneys and investment bankers in bankruptcy? 98% of attorneys
give the rest of the profession a bad name (a little humor). Someone
please help me here. As Voltaire said hundreds of years ago, "Common
sense is not so common".


"Keeping score of old scores and scars, getting even and one-upping,
always makes you less than you are."
-- Malcolm
Forbes


P.S. As I was getting ready to hit send on this article, an e-mail came
in from one of our pilots in Cincinatti. He included a thought I felt
was appropriate for each of us to reflect upon, especially the
hardliners, who may never get it:


""Mike,

A friend of mine put our situation in perspective for me recently. He
said, "When we (as individuals) ask Delta for help in our personal lives
(time off for funerals, family issues or other crises), Delta never asks
us what we'll do in return or to provide a detailed analysis or plan.
But rather, without hesitation, they tell us to take care of our affairs
and come back when we're ready.

During the last 18 months, Delta has been asking us for our help.""



In closing, one can't help but heed the familiar words of Monty Hall:

"Ladies and Gentlemen.....Let's Make a Deal"


Take care.


Respectfully, Mike Stark
 
Can any non-Delta pilot have much sympathy for these guys...?

They're the last pilot group to come to terms with the "new" reality...
And meanwhile they've taken their money to the bank....
 
8vATE said:
Can any non-Delta pilot have much sympathy for these guys...?

They're the last pilot group to come to terms with the "new" reality...
And meanwhile they've taken their money to the bank....
Yes...I've got a lot of sympathy for them. It's their night in the barrel and it's no fun.
 
Part of that article reminded me of a great saying:

"The great thing about the stock market is that the most you can lose is everything."
 
Last week

Last week I had the opportunity if you want to call it that to fly 4 segments with Delta Airlines --both through Atlanta.

Frankly any luster is gone from travel on this airline and perhaps all the rest too. Certainly the service level was no better than I have received on the low cost carriers. The average age of the flight attendants on board was deceased. They did allow me to purchase lunch and drinks so at least food was available on the 4 hour segment.

The trip was from FLL to SAN and fare less than $500 round trip. Lasting some 5.5 hours, you do the math on what the seat went for per hour of flight.

Just getting to the flight was one of those cattle experiences for all time. We have made travel an unpleasant experience for all and as far as I can see, the old Delta is gone.
 
Gearup727 said:
Delta's problems are faced by all Americans who have been asleep at the wheel while the business and world situation has changed. The sight below is a great one for news you will not hear on CNBC, FOX or CNN.




http://www.netcastdaily.com/fsnewshour.htm

I'm going to have to set aside an hour to watch John Dickerson, President & CEO
Summit Global Management, Inc. speak on "The Case for Investing in Water."




.
 
8vATE said:
Can any non-Delta pilot have much sympathy for these guys...?

They're the last pilot group to come to terms with the "new" reality...
And meanwhile they've taken their money to the bank....

We really don't need or want your sympathy. Interesting how hostile those in your own profession can be. Adapting to the "new" reality is management's job...and we have offered them adequate tools to works with. They chose not to capitalize on our offers. And, meanwhile, most of us have direct deposit. :)

Cheers.


DL_Infidel
 
Mike Stark also has an eye on his client's interests---and that doesn't mean he has a clear view of everything. Most people dismiss his comments immediately. I do.


Bye Bye--General Lee
 
General Lee said:
Mike Stark also has an eye on his client's interests---and that doesn't mean he has a clear view of everything. Most people dismiss his comments immediately. I do.
Bye Bye--General Lee
That doesn't surprise me. I think Mike Stark knows more about the business than the General does. Dismiss his comments if you want General, but you cannot dismiss the new reality. Mike has made some excellent comments - only the fools will dismiss them....
 
Inclusivescope,


Do you know him? I do. He is self centered and a "know it all."(let me just guess what you will say about me? Atleast I am for helping the furloughs!) He is also a brown noser and stood up in front of everyone at a Grinstein show and said "We should all do exactly what Gerry says...." Everyone almost puked. This is a negotiation---and our MEC does the negotiating. I am FOR pay cuts myself, and I want to help the company too. But, I don't have the "books" and neither does good ole Mike Stark. Do you Inclusive? Nope. But Dalpa and the MEC have access. Ask yourself again.....Does Mike Stark have the "books?" Nope. I will trust my MEC---and that doesn't make me a fool. You are a fool if you believe EVERYTHING Mike has to say.



Bye Bye--General Lee
 
Last edited:
General, you keep blindly trusting DALPA and your MEC, while ignoring what good that did for the gang at UA, or PA and EA for that matter.

One can only imagine how different this industry would be if some Econ 101 were required to pass your PPL checkride. Or perhaps your comm, as that's the point you decide to get involved in this silly game as a "career".
 
Also, I always love it when people who are smarter or have a better understanding are so quickly dismissed as being self-centered or know-it-alls.
 

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