How do you learn from NWA-Republic merger?
 

One nagging question in the MPR newsroom involves the lessons learned from the 86 Republic/NWA merger.

There appeared to be friction between pilots and merging seniority lists during that time period (the operative word is "appeared"). Some told us of different sets of pay scale instructions floating around the new merged company.

So what did that experience teach pilots when it comes to these mergers?

Mike Caputo
MPR News
[email protected]

"Experience teach pilots" - ROTFLMAO!!!


You've got a lot to learn about this...



Kevin

Mike-
There is still friction to this day from that merger.
And "friction" is putting it mildly.

You asked a great question. But I think the reason this thread has received so few responses is that explaining pilot contract and seniority issues to an "outsider" is incredibly difficult. The complexities are daunting and if you don't understand some basic jargon and shorthand terminology it can be even more time consuming to try and fill you in.

If you're really interested in learning all the minutia of pilot seniority integration fights and joint contract negotiations, I would suggest a phone conversation or better yet a face to face discussion over a few beers. Its just too much to type in a forum post.

Thanks...
 

Thanks Chuck...

I'm interested in doing that. You have my number (651) 290-1081. There is really a desire to try and communicate what happened 20+ years ago and what could be drawn from that.

I'm sure it's complicated... and yet for a state and region (the Twin Cities) that has so much at stake... it's worth getting into

Mike,

I don't know who Check Essential flies for, but I fly for NWA and am an original Northwest guy - commonly referred to as a Red Book pilot. I'd be glad to discuss this with you on this forum and give you the facts, and if you're interested, my personal opinion of what happened 20 years ago as well.

Carl

Mike-
Carl is the man you want to talk to if you want specifics on NWA/Republic.
Be sure to interview a "Green Book" guy as well though. (just not at the same time) :eek:

Actually Check, it would be fine to interview us at the same time. I have a lot of "Green Book" friends whose company I really enjoy. We'll never agree on the outcome of the seniority list, but that's OK. They're still great folks.

Carl

Best of all worlds... from a reporter's POV
 

Carl:

In all honesty, I think that our reporters -- and the listening public -- would learn a helluva lot if a Red Book pilot and Green Book pilot were interviewed together. We would have the strength of different views... we would have the historical perspective to inform this latest story... and we would have a kind of nuance.

What I mean by that last comment is that often issues are discussed in the press in "white hat, black hat" terms.

Or the media, in its zeal for "conflict", creates an us-vs.-them storyline. I don't subscribe to this approach (and thankfully, I work in a place that doesn't either). I think people are smart enough to understand the nuance... that you can have a differing point of view and still be civil... that you can have plenty of common ground while having a different stake in the game.

So... all that being said.... would you be willing to try a sitdown with us? Let me know... my email is [email protected] and my phone number is 651-290-1081.

If you call or email ... I'll need a sign. Maybe (in Murray-Spackler fashion) you can start by saying "....IT"S IN THE HOLE..." I don't know.

Mike Caputo

Throw a Blue Book in there as well, I am sure they will have an even different point of view. They got to watch the two sides differ...

Even better...
 

I would also put it out to the broader group... would pilots who are red, green or blue be willing to give us a lesson on the pitfalls and opportunities (if there are any) in merging. Let me know at the email or phone number above.

I know the feeling about the media... I'm sensitive to it. We're going to try to do this right - at least that's an effort from Minnesota Public Radio and American Public Media.

i got to watch it almost every time I flew from ANC to NRT. Most times I just slid my SO seat back and turned up my ipod!!

Ugly..

Mike,

If it is all the same to you, I'd prefer to do it right here so that the Delta guys who are interested can hear the history as well.

So let's begin. In 1986 Northwest Airlines and Republic Airlines had roughly the same number of pilots. Northwest fleet consisted of 747-400, 747-200, DC-10, 757, and 727. Republic fleet consisted of 757, 727 and a very large number of DC-9's. NWA purchased Republic for 880 million in cash for 100% of the company's shares. Pre merger price of Republic stock was 4 dollars per share. Purchase price was 16 dollars per share.

Between 1969 and 1979 Republic hired over 1200 pilots. In that same time frame Northwest hired none. Republic's merger proposal was date of hire which would have put 1200 pilots senior to every Northwest pilot hired after 1979. Northwest's merger proposal was a rather complex ratio that would have put a number of Republic pilots with earlier hire dates behind Northwest pilots with later hire dates.

The arbitrator's decision was short and to the point:

The list was straight date of hire. (Personal thought: prior to the merger, my seniority number was about 1200. After the seniority integration, my new number was 3750 even though we both had roughly the same number of pilots. When I saw my new number I actually had to sit down because I felt ill). The arbitrator's decision continued:

Due to the vast imbalances created with a date of hire list, conditions and restrictions are included. A snapshot of each airline's fleet was taken and a certain number of pre-merger seats were protected as follows:

1. Certain pre-merger NWA pilot seats were protected to be bid only by Northwest pilots for 20 years. Any growth above the protected seats will be shared on a 1 for 1 basis for 20 years.

2. Certain pre-merger Republic pilot seats were protected to be bid only by Republic pilots for 20 years. Any growth above the protected seats will be shared on a 1 for 1 basis for 20 years.

3. No bump - No flush protections.

And that was it.

My progression to my position today happened about 2 years later than the projections showed would have happened without a merger. Due to the subsequent purchase of additional wide body aircraft by NWA after the merger and the requisite growth sharing, over 500 former Republic pilots have retired as Captains on the 747, DC-10 or A330. When the 20 year fence came down in 2006, the top 400 pilots on the NWA seniority list were former Republic pilots. Today the top 229 pilots on the NWA seniority list are former Republic pilots.

All of the above are the dry facts (except for my parenthetical views). A lexus/nexus search for the arbitration award of Judge Thomas Roberts will yield the award for you to read for yourself.

This should get the discussion started if anyone is interested.

Carl

Carl, that's a pretty compelling argument for coming to an agreement, rather than submitting it to an arbitrator.

Thanks for that post Carl.
I think I figured out that I don't want to go anywhere near a date of hire with fences solution. What a mess. No wonder there's bad feelings if you guys have been living with that thing every day for 20 years.

Check Essential,

While it's hard to be completely objective on this, I have to agree with you. Republic got the seniority numbers, and Northwest got the fence protections from being displaced. Seniority numbers can't be arbitrated or interpreted. A series of conditions and restrictions CAN be parsed and dissected by one side who seeks to gain adavantage after the SLI.

My "objective" advice to Delta pilots is to fight hard against any SLI that is so unbalanced that it requires complex fences. Maybe fences for a year or two but nothing more. Whatever the pilot's final seniority number, it should speak for itself.

Carl

I'm still up for beers.

And, Carl, this is such incredible information to a novice who needs to get a handle on things. Thanks

CVG,

Actually I don't agree with you. I think our arbitrator did an incredibly difficult merger pretty well despite all the whining you hear. He took two airlines with a huge disparity in pay, aircraft size and dates of hire, and managed it so my career upgrade path was only delayed by two years while nearly 1000 Republic pilots retired off widebody aircraft due to shared growth.

Not all arbitration is horrible. It's just that so many folks simply cannot empathize with another group. That's probably why arbitration was invented.

That said, I do wish our groups could have done this deal outside arbitration. It would have been such a terrific kick start to the process of turning a shotgun wedding into a real family.

Carl

You're most welcome Mike, it is my pleasure. I'm under great time pressure these days, but I'll do my best to answer your questions objectively.

Carl

Now Carl...you've made 17 posts since yesterday evening. Time pressure? Really?

:D:D:D...Our more senior wide body guys get alot of time off!! At least we used to!

It seems to me that if there's still "whining" after 22 years, the arbitrator did a lousy job of merging your lists.

The Western and Pan Am pilots were merged by relative seniority, by equipment. This protected everyone's position; there were no major upheavals, no one's career suffered, and there were few hard feelings. We certainly don't have separate camps of pilots within Delta, with none trusting the other.

Which group you're in- Original Delta, Pan Am, or Western, doesn't even merit a mention in the cockpit. It may come up in conversation, or it may not. Either way, it's a non-issue.

If you think that disparate pay was a complicating factor in the merger, consider that, at the time of the Delta/Western merger, a Delta L1011 engineer earned more than a Western DC10 captain. There were some problems (the Western guys' pay came up in stages, rather than at once; a bad policy, IMO), but overall, we became one team after the merger.

Carl,

Just to set the record straight, NWA did NOT have 747-400's in their fleet in 1986. The aircraft didn't fly until 1988, and didn't enter passenger service with NWA until Feb 1989.

See http://www.boeing.com/commercial/747...ilestones.html

kmpflyer

Mike-
It'd be my pleasure to buy you a beer but I'm a Delta guy. That's why I suggested you talk to Carl if you wanted to concentrate on specifics of NWA/Republic from 1986. I just know the basic facts of that merger and that's about it. Carl or another Northwest guy could give you a lot more details and history and what its been like to work under the arbitrator's order.

I'll tell you this - I think the Delta and Northwest pilots will come together this summer and solve this problem. This and other Internet forums may make it sound like there's no hope but the truth of the matter is most of this stuff is posturing to get the advantage in the end game. Its my understanding the two negotiating committees weren't really that far apart when talks broke down. The line pilots at both airlines want this thing solved amicably. There's a lot of money to be made with this combination of airlines. Very little domestic overlap, so there's not much downside risk for junior pilots worried about their jobs and huge international synergies which have the potential to add a large number of the big jets we all want to fly. Truly the world's first global airline. Both pilot groups will benefit and we know it.

Its just my guess but I don't think your listeners in Minnesota need to worry about any significant economic disruptions as a result of this deal. The CEO's desk and a handful of the high-level bean counters might be moving to Atlanta but not much is gonna change at the MSP airport. In fact you will most likely see some growth and more jobs as a result of this.

kmpflyer,

You are right, thanks much for the correction. We were the launch customer and ordered the airplane in 1985 if memory serves, but that is not the same as having it on the property. Thanks again for the correction.

Carl

Do you really mean that the success of an arbitration is best defined by whether or not there is "whining" 22 years later? We'll all have to admonish the arbitrator that we will consider him a failure if there ends up being any future complaining. :eek:

By the way, was the Pan Am and Western integration done by an arbitrator, or was it just agreed to by the parties given that Pan Am and Western were on bankruptcy's doorstep? It's been so long I've forgotten.

Carl

That's not the best definition of successful arbitration, but it sure is a good indicator of poor arbitration if there is grumbling and hard feelings 22 years after the fact. Either those who are whining are habitual complainers, or they have a legitimate gripe. I'm guessing that it's the latter.

Western and Pan Am were both negotiated SLIs.

Could be a teaching moment....
 

I suppose this is where I get a little annoying, but here goes...:o

I think you are right that this conversation should happen here. But I see news as "education" and I would like to teach lessons provide by those who can serve as teachers. You have some worthwhile lessons to impart. And it might reach a broader audience of both NWA and Delta employees to boot.

Just a request to consider chatting with me.

I think that is a big part of the problem here. Delta pilot's recent experience with mergers were with parts of airline's that were about to be liquidated. If the Western and Pan Am pilots felt that a specially formulated ratio was unfair, who cares. They had no leverage and it would have been easy for Delta to just say "take it or leave it." The mergers with NWA have all been arbitrated even though Republic Airlines in 1986 was an airline in dire financial straits. At the time of the merger's announcement, Republic stock price had dropped to $4 per share. The financial distress notwithstanding, NWA felt that Republic brought a terrific hub in Detroit and Memphis along with a large fleet of 100 to 125 seat aircraft which NWA did not have. Thus the merger was not done on the pretext of buying a competitor that was on death's door.

I think a lot of NWA folks think that Delta still thinks the merger should be done with the same ratio strategy used for airlines that were about to be liquidated. That perception is insulting, and it shows by the reaction of the NWA MEC after negotiating with DAL.

Carl

Mike,

I've had a bit of experience with media interviews during our many strikes at NWA over the years. Please don't take this personally, but overall I found the experience distasteful and not very constructive. I spoke "on background" a number of times to reporters only to have my identity revealed to management and other media sources. Not to mention a large number of misquotes - which is always the worst part.

There are a ton of smart people on this forum that I'm sure would interview very well, but I'm a little burned out on it.

Carl

Your recollection of the facts is wrong in the case of Western. That airline was a growing, thriving airline at the time of the merger. Your attitude of "who cares" says a lot.

NWA's perception that they bring have some kind of "premium" over Delta pilots is insulting, and it is shown in their lack of ability to negotiate a deal (any deal).
NWA wants to count "shells" parked in the desert, rather than active jobs brought to the table.
NWA wants to count jobs created by the Delta staffing formula as something they brought to the table.
NWA wants to count A330 payrates as premium over 767 rates, even though they didn't bring those (or higher rates for the 744 and 742) to the table. It's that "premium" thing again.
NWA wants to capture all "their" attrition off the top, but doesn't want to be held to the same standard off the bottom when the DC-9's and 742's are parked.
NWA thinks that their pilots are entitled to Delta growth, but Delta pilots aren't entitled to NWA positions with 24.E.10.
NWA thinks that the greenbook seniority list inversion due to the Roberts award isn't a problem. That's because they'd all fill in the unfenced Delta 777 while the Whale was protected.

Oops, that's not perception. That's the reality the Delta MEC negotiated with. That's insulting. NWA wanted to address all their concerns. They didn't care about Delta concerns. And when it came to deal deadline time, the NWA MEC administration didn't negotiate. They went on vacation.

I think a bunch of former Western guys would disagree with you about their airline's health and future.

Yea but I've never heard anyone complain about either of those acquisitions. Even the PAN AM guys I flew with were content. If they weren't upset by the negotiations then that smells like success to me. Especially when juxtaposed against the arbitrated list and fences that caused so much rancor at NWA. Most conversations I had over the years with my NWA friends would degenerate into a green book, red book, blue book discussion. It's a non-issue over here because we never got lazy and let a bureaucrat handle our issues for us. I'd prefer we not start now.

I think that is a big part of the problem here. There are two ways to reach an agreement between two groups having divergent goals: the traditional, adversarial way, where the stronger entity wins, and the cooperative way, where both sides seek an agreement that addresses their respective needs.

NWALPA typically resorts to the former method; DALPA typically uses the latter.

Which is more effective? I'll leave that for you to decide. One way to judge the effectiveness of each method is to compare our contracts over the years. You be the judge.

You are making every bit of that up Slow. That's a rant that I will bet cannot be backed up by a single piece of evidence.

And to think you said something earlier that I wholeheartedly agreed with.
Hmmmm maybe there's still hope.

Carl

I think you missed my point. I don't think it was laziness that prevented arbitration, it was the fact that Western and Pan Am had no leverage due to their financial condition. TWA had no leverage against AMR...same reason.

Carl

CVG,

That's just ignorance of history on your part. And the way you spliced that half sentence out of my post gives new meaning to lack of context, but that's OK. Not too many people understood why all the strikes happened at NWA. It was because of something called the Mutual Aid Pact. It meant that if an air carrier suffered a strike, other airline managements would come to the financial aid of the carrier that was struck and actually give them cash. NWA managment realized that money could be made, so they routinely walked out of negotiations with all labor groups KNOWING that the law allowed them only one option - which was to strike. After about the fifth time this happened, other airlines got wise and lobbied congress for an end to the Mutual Aid Pact. Congress quickly agreed.

By not caving in to our management's draconian salary cuts back then, we held the line on not having a bad pattern affect the rest of our ALPA brothers. We lost a lot of income because of that, but we felt that the line had to be held.

Carl

CVG,

I'm not so sure I'm ready to take a lecture about being adversarial from a pilot group that didn't even have reciprocal jumpseats until the mid to late 90's.

Is it possible that DAL has the great contract that you have because of the many strikes NWA and others went on in the past?

Let's not forget that Delta pilots attitude of "cooperation" back in the 90's was not highly viewed by ANY of the other airline pilot groups. Why?

1. You negotiated a 2% pay cut right before DAL made record proffits.
2. You had no jumpseat privilges for the rest of the industry.

Maye you were a little too cooperative then, ya think?

A few years ago you guys went crazy preparing for a strike for the concessionary contract and for the potential U.S. Air merger, and I was proud of you. Both times you were very effective. But, that wasn't too cooperative, was it?

So, if you want me to be the judge, I would say that your cooperative approach did not work too well in the 90's. I hope it works out for you now. But I would ask that you not judge others who choose not to be cooperative. Different situations require different methods.

Respectfully,

New K Now

Maybe you should challenge your modified merger committee (the one after Laz was replaced at the table) to provide you the evidence.

Ask them. If they tell the truth, you'll retract your statement above.

Just FYI.. we couldn't even use our OWN jumpseat without management's permission until then. We hated it, and knew that other airline pilots looked down on us about that, but we also didn't feel like it was worth what little negotiating capital we had at that time to even get it for OURSELVES, much less other airlines... Sorry about that, but unfortunately that was the way it was then...

Ts,

Absolutely no need to apologize. Just had to make a point to CVG. You guys kicked but the past few years. We are all on the same side. :)