Carl, I acknowledge - that was a bad use of words. What I meant to say was one was at the helm right up until the time DAL entered bankruptcy; then a different MEC Chairman was elected. How those two approached the job is a function of the circumstances each found themselves in.

The entire Delta pilot group had rose colored glasses on right up until the time bankruptcy was declared. The pension was heading down the toilet for several years while thousands left yet nothing was done. We kept getting contractually negotiated pay raises, while the corporation was losing billions. Disabled pilots have their disability payments for life, and even got their benefit plussed up when the pension terminated.

Bankruptcy was a bucket of ice water thrown in our faces, and in my opinion, the true wake up call. The new MEC and MEC Admin made the most of it, despite the horrible circumstances. Labor definitely loses, and loses big in every bankruptcy, but to somehow lay the blame on where we are at the feet of the union, is also to deny that 9/11 is the real reason.

 

I couldn't resist.

 

This is the best single post I've seen on the issue. You're spot on, sailingfun. Add in that DAL spent another $2 billion buying ASA and CMR.

 

Bill, DALPA has gotten incremental improvements, maximizing the limited leverage they had at the time. It's no where near restoration, and we need big improvements in the future. But you can't get what is unobtainable. You need look no further than APA, LCC, and now UCAL to see that.

DALPA could have taken the APA approach -- and gotten nothing.

Or look at UCAL now; those airlines are out of bankruptcy. UCAL ALPA is trying to maximize their value, but they don't have a lot of leverage to do that at the moment -- hence their lack of progress.

Making public statements, as DAL88 wants to do, accomplishes nothing. Ultimately, its negotiating leverage that gets improvements. And that leverage is a function of corporate profitability, union solidarity, industry peer comparability, and a friendly NMB. At the moment, those aren't as much in our favor as I'd like.

 

$2 billion?!? Wow! Talk about management EPIC FAIL.

 

Take another look from a wider perspective. Your pride in Delta is understandable, I feel the same way, but you have to look at facts objectively and sometimes question what a consultant paid millions of dollars to sell a reorganization tells you. Lets take a look at objective facts, you write:When bankruptcy was openly discussed and bankruptcy experts retained in 2001 one of the FIRST actions they took is to rob the cash reserves to fund bankruptcy proof bonus and retirement plans. This action hit the news a year later after the money was gone.
You have it right that he subsequently tried to exploit Delta's share volatility to further enrich the inner circle.

It always surprises me when a defendant pleas "incompetence" as a defense. When the defendant somehow was competent enough to secure his own pay in bankruptcy proof structures before every one else loses their butts, that indicates premeditation.

Frivolous wastes of cash, sold with the "new cost paradigm" logic, allowed control over cash burn. While McKinsey & Co., as well as the bankruptcy attorneys took their share without oversight.United's bankruptcy followed the exact pattern, with many the same consultants. For those who would rather watch than read:

Watch The Full Program Online | Can You Afford To Retire? | FRONTLINE | PBS

Changing World - Exploring The New Corporate Bankruptcy Strategy | Can You Afford To Retire? | FRONTLINE | PBS

One last thought. If Delta wants someone to fly an airplane, they hire a pilot. If Delta wants someone to run an airline, they hire an airline manager. If Delta wants someone to manage a bankruptcy, they hire a banker and a bankruptcy accountant. Now what the heck was on Mullin and Burn's resume?

ALPA, IMHO, can sometimes look at business with too narrow a perspective. Certainly the trip through bankruptcy forced them to look around, but still there is a lot of inertia which allows management to outmaneuver the association. The very insulated inner circle does know a lot, but no one can know it all. The Delta MEC publicly called out Mullin, Burns and Reid as liars, but your post suggests that many believed them and believed in them. I have a lot of respect for your position, but I disagree with your conclusions.

 

Then they spent another 11 to 12 billion on new airplanes and half a billion on a strike for a total cost in the range of $15 billion. Outsourcing an airline is expensive.

As of 2009, it was believed the FUTURE obligations under our fee for departure contracts was in the range of $25 billion. A number initially disputed, then subsequently quasi confirmed by one of ALPA's published scope experts.

I will repeat, outsourcing an airline is expensive.

 

I absolutely agree that outsourcing was one of the major factors contributing to DAL's bankruptcy, but perhaps not for the financial reason you mention. I suspect it likely saved DAL dollars, by paying employees, contractors, and everyone else involved peanuts.

But as my Daddy always said, "you get what you pay for".

When DAL started (and continues to this day) to label and sell the inferior product that every small jet operator provides as a DAL product, they cashed in on the DAL reputation that took a generation to build. That method worked..... until it didn't.

And now, the reverse is true. Delta has a horrible reputation among the flying public. Customer complaints are rampant. On a personal note, the vast majority of complaints I hear from friends, neighbors, or even strangers, when they complain about their last trip on "Delta", I come to find out they never actually flew on Delta. If we don't fix THAT problem, and I see no indication management has any intentions of it, you and I are liable to wind up back in BK.

 

PG,

You may be right, but it is more difficult to measure those factors.

Initially our association's economic analysis of outsourcing was a political tool to justify the denial of the Comair and ASA PID. Subsequently that tool was used to show credits for outsourced flying. This continued through bankruptcy as political grease to ease some very uncomfortable truths about the effect of disunity on furloughed ALPA members.

When it was clear the numbers had turned in favor of unity, D-ALPA refused to perform economic analysis even with multiple resolutions passed requesting that analysis be done. Mind you that policy REQUIRES economic analysis before negotiations, but the old bankruptcy numbers were deemed more than sufficient to negotiate our JPWA despite the enormous changes in our cost structure pre and post bankruptcy. In fact we never even looked at the various fee for departure agreements.

My question was "what if it turns out to be positive for both the Company and Association if we absorb Compass?"

One thing that appears to be a positive sign was that as Moak moved to national, economic analysis was done, although the numbers (to my knowledge) have not been released to our Reps yet.

Regardless of the data, I believe a union should fight for unity. It is likely the data supports a reversal in our scope strategy.

 

Sailing,

Good overall post except for the part that I bolded in red above. "Stigma?" Really? I personally think that ship sailed about 30 years ago in the US. Today after a businessman/woman bankrupts a company they just move on to loot and pillage the next company.

The BOD oversight in this county has failed. It is now basically a
"spoils" system and far too incestuous. When a company does well it is because of the genius and vision of a CEO who should then be richly rewarded. When a company fails the CEO could not prevent it and is thus also richly rewarded.

As has been said before, rewards are privatized and risks are socialized.
Anyway, good post, sorry about the thread drift.


Scoop