757Driver

Spoken like a true management/hedge fund wanna-be.

Herkflyr

Odds are if CAL merges you will learn about it the way most mergers go down: it will come as a surprise when you read the morning paper that you have already merged, without one nickel for any employee. If your merger model is any different than that, you can thank the DAL MEC, and no other entity, for changing the whole labor approach.

Herkflyr

Nope. Spoken by someone who thinks that sticking fingers in ears, head in sand so deep that it is creeping past the small of his back, and screaming "la la la" is not necessarily an effective strategy. It doesn't work well on anonymous message boards, however.

757Driver

Edited for Content

Scoop

[quote=757Driver;363887]Sorry DAL types but I completely agree, 17% increase over 4 years. Is this the big reward for all of your givebacks?

Why the heck didn't you tell management to dust off the old proposal or its sand pounding time.

757 Driver,

First off - the NW MEC saw that the original deal died with their attempted seniority grab. Next look at the big picture. The DAL MEC just set a new status quo for mergers - Labor from all airlines can now hope to be involved from the start. Instead of slamming our deal start working on raising the bar on the whatever deal comes your way.
By the way 17% in todays environment is pretty good. And increased pay rates for the 737-700, and oh yeah 3.5% of 17 billion, and don't forget sick leave improvements.
One final thing - What has labor ever received for every prior merger in history? What did USAIR get? I think we just did CAL a huge favor if there is a merger in your future.
Scoop - It aint perfect but its a start.

757Driver

Scoopster,

You do bring up some good points but I still think way too much was left on the table by you guys and a lot "scooped" up by management. Make no mistake on these mergers, the biggest winners are always the overpaid management guys as well as the lawyers and bankers.

I truly do wish the best of luck to both Pilot groups but I did expect much more.

DAL4EVER

757Driver,

Have you read any details of the TA? How about that this is an interim contract with the joint one to come. This TA takes us back to pre-LOA 46 or bankruptcy rates. It means a 777 CA will earn $225/hour. That means this is what FedEx has in their industry leading contract. And again, this is an INTERIM contract. The joint one will negotiate off that. We couldn't do a joint contract with NWA in this time frame so we will now have that time. I'd rather negotiate off that than take nothing and have that be the benchmark.

Why don't you thank us for returning a pax carrier to pay levels above $200/hour. Now you can show us how its really done when you take on UAL. That deal will probably be announced by the end of the week. And if it is, will they even include CALPA or UALPA. I haven't heard if there's any negotiations going on between you guys.

757Driver

Guess I'm hoping we'll do much better than that.

DelDah Capt

757Driver,

The mergers in the airline industry are going to start falling now like tumbling dominoes. You'll have your turn in the barrel soon enough and I wish you luck. You may not understand it now, but the strength of pilot labor groups going into these mergers has been improved by what DALPA did. You'll be able to point to this precedent and say that you want your piece of the pie in the merger. I really don't think you understand that that hasn't happened before. I'm not sure if I'll vote for this thing until I see the details and what it means in the long term, but the fact that we have anything to vote on when in a normal merger scenario we'd get a whole lot of nothing is pretty remarkable.

Of course you could tell your management that you want to do it the old fashioned way and forgo any contract improvements. I'm sure that would show managment how 'hard' you are.

HVYinRESERVE

Read the portion toward the bottom... Will NWA pilots get rid of this guy already! We can get this done for both pilot groups' benefit but not with leadership like that!

A letter from the NWA MEC Chairman to the pilots of ALPA Councils 1, 20, 54, 55 & 74
TO: All Northwest Pilots
FROM: Dave Stevens
DATE: April 14, 2008
In the wake of the Delta-Northwest merger announcement today, I am writing to update the Northwest pilots. I will start by giving you the conclusion. Since January 2008, we have been working hard to put together a cooperative merger between the Northwest pilots, Delta management and the Delta pilot leadership. Agreement on the terms for a cooperative merger was in all stakeholders’ best interest in better times, with oil below $90 per barrel. With oil over $110 and an economy facing recession, and given the recent activities of the two managements and the Delta MEC, a merger with Delta may no longer be in the best interests of all Northwest stakeholders, including the Northwest pilot group. Northwest Airlines has strong standalone prospects given its cash position (best of the legacy carriers) and the flexibility of the NWA fleet, among other things. We are in a good position to weather the potential economic storm.
As a quick review, we started exploration of a cooperative merger with four key requirements from NWA MEC Resolution 08-01:
1. Creation of a profitable merged company with sufficient market presence and network scope to provide a stable platform for growth and sustainable profits;
2. Fair and equitable seniority list integration;
3. Collective bargaining agreement for the merged company with substantial improvements; and
4. Share in the equity of the merged company.
A cooperative merger provides a win-win formula for labor and management. By achieving a joint contract and seniority list prior to the effective date of the merger, revenue synergies and cost efficiencies are generated immediately (worth many hundreds of millions of dollars per year), and a portion of this economic upside could go to the pilot groups in the form of contract improvements and equity.
Since January, we have met with the Delta pilot leadership and Delta management in three extended efforts to accomplish the above requirements. By the end of the second session, we had accomplished requirements #3 and #4. However, we were unable to reach agreement on #2, an equitable seniority list, which is essential to accomplish #1. There was a great deal of collaborative effort expended by the Delta pilot leadership and Delta management to convince us to accept inequities in a seniority list in return for improved economics in a joint contract. As you know all too well, seniority is forever while economic provisions can be short lived.
The first two negotiations took place in New York City with oil below $90 per barrel. While we achieved agreement on a joint contract and equity and made progress on a seniority list, we did not achieve an equitable seniority list. The third negotiation took place in Washington, D.C., and while more progress was made on seniority, a seniority list agreement was not reached.
The seniority negotiations broke down over the Delta pilot leadership’s desire to include aircraft options, not just orders, in the seniority integration ratio. We were not willing to adjust the seniority integration ratio in favor of Delta pilots based on options, particularly when such options were unlikely to be exercised, other than as replacement aircraft, in the worsening economic environment. There were additional problems concerning calculation of the number of active pilots at each carrier and staffing assumptions for the future. The resulting difference in our respective positions on a ratio was substantial. The actual breakdown occurred when, in response to my suggestion that we both compromise and bring that to our respective MECs for their consideration, we were advised that the Delta pilot group could not move off their last ratio proposal.
As we had several times before, we then suggested to the Delta pilot leadership that we agree on expedited arbitration of the outstanding issues by a date certain. The result of an expedited arbitration would have been functionally the same as an immediate negotiated agreement since there would have been one seniority list and a joint contract in place on the transaction effective date.
By use of this process, much of the transaction risk would have been taken out of the merger and additional funds would have been generated to pay for one-time transition costs. In the uncertain world of airline economics, this was a key consideration. When two airlines merge, they attempt to realize the benefits of the created synergies before they run out of cash on hand to pay for the transition costs. In our current environment, there is no more money to borrow and airlines have few assets left to encumber.
Unfortunately, the Delta pilot leadership rejected arbitration, whether expedited or not, as a means to resolve the seniority list dispute. From that point, Delta management, the Delta pilot leadership and Northwest management chose a different path. NWA management proposed a traditional merger to Delta management. Then Delta management entered into bilateral negotiations with the representatives of the Delta MEC. The representatives of the Northwest pilots were excluded from the negotiations. Inexplicably, the Delta pilot leadership reversed its position. They are now willing to arbitrate the seniority list issues under ALPA merger policy. At the same time, they abandoned the joint pilot contract approach and have, instead, agreed to a Delta pilot contract amendment which will increase the pay and benefits for only Delta pilots. The Northwest pilots are excluded from the economic benefits. Both managements have cooperated in this change in course.
Yesterday we met with Delta CEO Anderson, President Bastian and EVP Campbell. At that meeting, we suggested that they delay the merger announcement and spend a short period negotiating a joint contract with a focus on their harmonization issues. This suggestion was rejected in favor of the plan they are currently pursuing. In explanation, they said we were out of time to negotiate prior to a merger announcement date (despite the fact they found two weeks to negotiate a deal with the Delta pilot leadership).
As a result, there will be seniority arbitration in a traditional merger process and it may take a long time. The Delta pilot leadership may choose not to cooperate on a joint contract for the benefit of the Northwest pilots while they seek an agreement on seniority that favors the Delta pilots.
Now we reach the question your MEC considered at its meeting yesterday – Should the pilots, employees and customers of Northwest support this merger as it is currently contemplated? The managements are betting on the merger models of old: Pay the employees of one group less and focus on lowering costs (instead of many of the revenue synergies that are far more likely to improve the bottom line); hope for cost savings going forward from employee division with no concern for the dis-synergies caused by labor dissatisfaction. The point has already been made to us by Delta management that they already have a "B scale" at Northwest, and that they will need to maintain it by phasing in harmonized wages. Mergers based on this model have never worked well, but trying to make this work at $110/bbl fuel, with a looming recession and no access to credit markets, is putting everything at risk.
One can only conclude that the Delta pilot leadership and Delta management have made an arrangement to try to disadvantage the Northwest pilots economically and with respect to our seniority. No pilot group is going to put up with this. No amount of money can sustain a carrier which creates this level of discord. This is a recipe for failure. Under these conditions, Northwest Airlines and all the stakeholders, including the pilots, other employees and customers, are better served by a standalone airline. Under these circumstances, it is Northwest’s best option, with its strong international and domestic route structure, a flexible fleet, an order book with fuel-efficient aircraft and the best cash position of any legacy carrier, to remain an independent carrier.
Your MEC reached this conclusion with reluctance. We were very close to concluding a truly cooperative merger which would have served the interests of everyone. We regret that an agreement was not obtained. However, the past is past. The Northwest pilot group now has to face a difficult future. As hard as a standalone course may be in these economic times, it is our judgment that it carries less risk than the merger path which now lies before us. For that reason, we will be turning our efforts to stopping this merger. Over the course of the next few weeks, we will be sending you more information on the MEC’s plans. Look for a road show schedule to be posted soon.
Fraternally and in Unity,
Dave Stevens
MEC Chairman