NWA/DAL Merger may go ahead dispite pilots

[NuGuy]

NWA/DAL Merger may go ahead despite pilots

http://online.wsj.com/article/SB120493646810421039.html?mod=yahoo_hs&ru=yahoo

Heyas,

The beginning of the article talks about how little headway has been made since talks restarted, and how a voluntary agreement might not be reached.

However, the meat of the rest says that the investors want their payday, and that there is increased "chatter" among the large, private investors to go ahead a do the deal without a agreement.

To quote the article:

"There is no evidence such a proxy battle is afoot, but there is chatter among some big investors that Delta management is abrogating its fiduciary responsibility by insisting on a premerger agreement with the pilots"

Some of the private investors said "Such an agreement isn't required by law or either union's contract, so the airlines could go ahead with a deal
and force pilots to sort out seniority later".

I assume this to mean that the contract "trinkets" would be off the table and an arbitrator will be in.

Make no mistake, when "private investors" make comments like this in the WSJ, it's a shot across the bow. If RA won't do the deal, they'll bring in someone that will. Hopefully he didn't burn any bridges at United Health Care before he left.

Popping the popcorn and opening a beer for the sh!tfest this is about to become...

Nu

 

[Schwanker]

Maybe UAL will make a play on DAL - Creditors Anxious

Little Headway in Delta-Northwest Talks
By SUSAN CAREY and PAULO PRADA - WSJ
March 8, 2008

Informal talks among pilot leaders from Delta Air Lines Inc.
and Northwest Airlines Corp. over the past week failed to
produce the breakthrough needed for the two airlines to move
ahead with their plans for a merger that would create the
world's largest airline, said people familiar with the
talks.

Some progress was made during four days of discussions in
Washington on how to integrate the Delta and Northwest
pilot-seniority systems, and the talks are expected to
continue. But combining the seniority lists may be so thorny
a proposition that no agreement is possible, a person said.

That scenario is raising pressure on the airlines from some
of their key shareholders. Some investors who embrace the
idea of a merger are losing patience and believe Delta and
Northwest should proceed without a pilot accord on
seniority. Such an agreement isn't required by law or either
union's contract, so the airlines could go ahead with a deal
and force pilots to sort out seniority later, some investors
said privately. That is the how past airline combinations
have typically occurred.

Increasingly, Delta shareholders are making their
displeasure known to the airline's top management, according
to several investors. When Delta left bankruptcy-court
protection last year, its investor base was fairly
concentrated and included a large number of hedge-fund
investors eager for the quick returns they believed a merger
could provide. Over 20% of the company's shares at present
are owned by hedge funds, according to FactSet Research
Systems Inc.

Under Delta's governance rules, 40% of the holders of its
shares could require the company to hold a special meeting
at which the board could be removed by a majority vote.
There is no evidence such a proxy battle is afoot, but there
is chatter among some big investors that Delta management is
abrogating its fiduciary responsibility by insisting on a
premerger agreement with the pilots, said a person familiar
with shareholder sentiment.

A Delta spokeswoman declined to comment, except to say the
carrier won't enter a transaction unless it is in the best
interest of all of its stakeholders, including employees,
customers and shareholders.

Delta and Northwest want to enter into a labor-friendly
merger in the interest of avoiding worker squabbles and
integration problems that have plagued other airline
combinations and to smooth the deal's path among opponents.
Any deal is certain to hit resistance from some members of
Congress and could face opposition from antitrust
regulators, consumer advocates, other unions and
communities.

The companies especially want their most powerful employees,
the pilots, to be behind them, as a quick integration of the
pilot groups would lead to immediate savings and
efficiencies that would bring value to the merged entity,
said people familiar with their thinking.

That led the two carriers to work out a common labor
contract with sweetened terms for the 11,000 pilots
including pay raises, equity in the combined company and a
voting seat on its board. But getting pilot assent on the
all-important issue of seniority -- which governs which
planes they fly, how much they earn and their career
advancement prospects -- has been a bigger challenge,
especially in the compressed timeframe in which Delta and
Northwest negotiated the merger agreement. Without a
seniority plan, the economics of the new labor contract
might not be viable, said a person familiar with the matter.

After earlier efforts to find common ground on seniority
came to naught, Delta and Northwest last month canceled
plans to call board votes and announce the merger deal. The
pilots resumed talks only early this week after a lengthy
break, a fact that caused deflated Delta and Northwest
shares to gain ground, though Delta's shares were down 61
cents, or 4.5%, to $12.89 in 4 p.m. New York Stock Exchange
trading Friday, while Northwest's shares were down 73 cents,
or 5.3%, to $13.13.

The talks are informal and aimed at determining the basis
for a deal acceptable to both sides. Whatever is agreed upon
wouldn't necessarily be binding on the two pilot groups.
Neither of the groups, both members of the Air Line Pilots
Association, would comment on the talks.

 

[NuGuy]

Increasingly, Delta shareholders are making their displeasure known to the airline's top management, according to several investors.

Heyas Schwank,

Yup. Make no mistake...the money men want their money. Keeping them from their cash is like trying to keep a lion from a limping antelope....it's just not something you want to try to do.

This is exactly the scenario that was predicted by many at NWA. Management plays nicey nice, throws some peanuts on the table and sees if you can get the monkeys to type out Shakespeare. If not, take them in the back, put them down, and move on...there's WAY too much money at stake.

Makes an interesting scenario, if you are into that sort of thing:

1) Make a deal, keep the improvments on the table, but have to accept something your pilots may not.

2) Don't make the deal, lose whatever improvements you might have gotten, and wind up with something worse, SLI wise, in front of an arbitrator

3) Try your game at UAL, whose pilot group is as old as the NWA guys and MUCH crabbier due to what they've been through.

Funny thing...you don't hear anything about anyone pressuring NWA to get the deal done. In fact, the reporting has almost been exclusively on the DAL side of things.

When it comes right down to it, Anderson is an employee just like everyone else. Either he will pull the trigger, or be moved out in favor of someone who will...Steenland maybe? Argh...

Nu

 

[Noserider76]

And when there is no agreement there will be no payoff for the pilots. You guys have a huge amount to lose there. Us...not so much.

This merger has always been about the hedge funds and institutional investors. Maybe if they push this they'll get to see what 7500 pissed off employees, who decide whether a wheel turns, can do to their investment.

If they do succeed on forcing a merger I can see it now. US/AWA part II. 2 years from now the DL guys are negotiating a new contract. 4 years from now the NW side of the fence will be. We'll still have separate call signs and a special salute for each other. I've always wanted to work for a completely disfunctional company. Now may be my chance.

 

[FDJ2]

Funny thing...you don't hear anything about anyone pressuring NWA to get the deal done. In fact, the reporting has almost been exclusively on the DAL side of things.
Nu

There's not much pressure on NWA because NWA can't and isn't calling the shots. NWA management was muscled out early on. If there is a merger, the headquarters will be in Atlanta, the management will be Delta, the ticker will be DAL and you'll be buying a new double breasted uniform.

 

[NuGuy]

And when there is no agreement there will be no payoff for the pilots. You guys have a huge amount to lose there. Us...not so much.

And thus, yet again, the famed DAL arrogance is displayed.

The truth is that the NWA guys have NOTHING to lose other than an abortion of a SLI, crippled career advancement, some cheap trinkets and a career full of obnoxious us vs them mentality.

Pardon me if I don't get all weepy at losing the chance to get displaced to NYC or ATL.

Your management is more than welcome to walk way. You let yourselves in, you can let yourselves out. We have other guests, but it looks like your "ride" (IE moneymen) might be getting ansy. You might be stuck here.

But assuming this deal is forced upon us, the SLI will be arbitrated, and a new contract negotiated in section 6.

After talking with our guys, an arbitration, which was off the table, is looking like a far better option than the ridiculous "generous offer" from your side.

Taking a chance with an arbitration? Sure...but considering the DAL table postion, and the relative strengths/size/fleets/staffing/stock swap of the two airlines, it's a good bet we can do better.

Unless, of course, you guys don't like the arbitration results...but the good thing is that you'll already have a roadmap of how to "fix" that.

Nu

 

[NuGuy]

There's not much pressure on NWA because NWA can't and isn't calling the shots. NWA management was muscled out early on. If there is a merger, the headquarters will be in Atlanta, the management will be Delta, the ticker will be DAL and you'll be buying a new double breasted uniform.

No question that will be the look AFTER the fact. And no, I won't be buying anything because that's covered in "our" contract.

But it's still the day before, and our management is still running our show. NWA is free to see DAL to the door and be no worse for the wear. CAL is still locked up, guys are retiring at 60 (or earlier), 787s are coming, the DHL contract got renewed and the DC-9s are STILL paid for (employing our pilots...not Comair's or ASA's).

OTOH, the list of other playmates for DAL is extremely limited. Good luck keeping the name, ATL, OR the zoot suit with UAL.

Nu

 

[Noserider76]

And thus, yet again, the famed DAL arrogance is displayed.

The truth is that the NWA guys have NOTHING to lose other than an abortion of a SLI, crippled career advancement, some cheap trinkets and a career full of obnoxious us vs them mentality.

Pardon me if I don't get all weepy at losing the chance to get displaced to NYC or ATL.

Your management is more than welcome to walk way. You let yourselves in, you can let yourselves out. We have other guests, but it looks like your "ride" (IE moneymen) might be getting ansy. You might be stuck here.

But assuming this deal is forced upon us, the SLI will be arbitrated, and a new contract negotiated in section 6.

After talking with our guys, an arbitration, which was off the table, is looking like a far better option than the ridiculous "generous offer" from your side.

Taking a chance with an arbitration? Sure...but considering the DAL table postion, and the relative strengths/size/fleets/staffing/stock swap of the two airlines, it's a good bet we can do better.

Unless, of course, you guys don't like the arbitration results...but the good thing is that you'll already have a roadmap of how to "fix" that.

Nu

No arrogance here. I was talking about the contract improvements that have been widely reported of which NW takes the lion's share. Not surprised you took the opportunity to accuse me of arrogance where none was meant, though. I can see you've been chomping at the bit for a fight. I notice you always mention other merger possibilities for NW while DL will be out of options. Why do you feel the need to merge with anyone?

The information we've gotten says that the completely ridiculous table position came from your side. Here's to hoping this mis-guided merger dies soon. Has there ever been a good one?

 

[FDJ2]

The truth is that the NWA guys have NOTHING to lose other than an abortion of a SLI, crippled career advancement, some cheap trinkets and a career full of obnoxious us vs them mentality.

Don't you already have that?

 

[NuGuy]

No arrogance here. I was talking about the contract improvements that have been widely reported of which NW takes the lion's share. Not surprised you took the opportunity to accuse me of arrogance where none was meant, though.?

Ahhh, the quintessential DAL pilot....blissfully unaware of his own arrogance. Thank you for so elegantly displaying the stereotype.

I notice you always mention other merger possibilities for NW while DL will be out of options. Why do you feel the need to merge with anyone?

No need at all. But if IS going to happen, it's nice to have a choice of dance partners.

The information we've gotten says that the completely ridiculous table position came from your side. Here's to hoping this mis-guided merger dies soon. Has there ever been a good one?

Oh, yea, you mean the one where we take all the top spots, fence the 744s AND staple 3000 DAL guys to the bottom of the list...the one that was LEAKED to the papers. Puh-lease, use your head...does that even pass the sniff check?

Just about every NWA guy here says that's not true (but don't take our word for it), yet your own people ADMIT that your team went not to negotiate, but to dictate the SLI (um, if you're sent to negotiate without any room to negotiate, that's dictating). Sorry, but that's NOT how it works in the real world.

And no, I'm not picking a fight. I'm doing the electronic equivalent of picking my nose, to see what goobers come out. Thanks for playing...

Nu