Originally Posted by
tsquare
We are underpaid. That is a fact. We are being paid as if we were still in danger of liquidation.. I do not argue that point.
Good. That would be a hard point to argue. (Although I'm sure Sailingfun, Slow, or Alfa would give it a try.)
Originally Posted by
tsquare
My opinion is that we (Delta) are not alone in the industry. Some people seem to think that we can go out and magically get a 50% pay increase with no repercussions wrt DAL and the rest of the industry. That is naive. AMR is in bankruptcy, and if you do not believe that that has an effect on us then that is even more naive.
Now that is where you go off the rails IMO. There is no rule in business that says the costs of an employee group at one company have to equal the costs of the same employee group at another company. SWA is a good example of that. They pay their pilots almost 50% more than Delta pays its pilots doing comparable flying. Yet SWA is profitable and has consistently been profitable.
Some companies consider higher compensation to be a strategic advantage. They recognize the many intangibles that help the bottom line when you attract the best people to work for you and they are motivated (and rewarded) to give you and your customers their absolute best.
Originally Posted by
tsquare
Sure, you can look at the RASM/CASM etc etc etc... numbers and make it work to suit your argument if you discount the fact that DAL exists as a money making entity - and here's a flash news item - it exists because the shareholders see fit to invest in Delta. You above all should know this relationship. Would YOU as an investor put your money in DAL is you saw profits declining by 50% because of a single labor groups' new contract?
I wouldn't invest in an industry (or a company in an industry) that has lost more money over its history than it has ever made. So to answer your question... No. I wouldn't invest in DAL stock whether it paid its employees top dollar or its employees worked for free.
Now, as far as what other investors (who are dumb enough to invest in airline stock) would do. I think it is up to Delta management to make decisions that are in the best interest of the business. A big part of running a quality, successful company is taking care of your employees who in turn take care of your customers. It's up to management to make the right decisions for the business and then, if that raises questions with some investors, communicate the reasons for their business decisions and sell the investors on what we are doing to maximize the quality and long term success of this company. It's not a hard case to make. That's what the "Director of Investor Relations" is for.
Originally Posted by
tsquare
Shareholders couldn't care less about labor as long as their costs are in line. I am fine with that, it is just business. And again, because forum readers have very short attention spans, I am not making management's argument for them. I am looking at this from a business perspective.
Respectfully, I submit that you are looking at it from only the cost side of the business equation. There is much, much more to running a business than controlling costs. Don't get me wrong. Cost control is important. But it is not the end all and be all of running a business. IMO there has been way too much focus on cost to the detriment of doing what is in the best interest of the business and its customers. We're in the era of "bean counter management." It's a fad that, unfortunately, we are having to live through right now. I generally don't do predictions... but I predict that one day this era of over infatuation with cost (to the exclusion of other equally or more important things) will be used in business textbooks as an example of a colossal failure and a clear example of how not to do it.