Sobering words from Delta CEO Grinstein

Ah, they're still negotiating in the media. I believe the pilot union wants to see a business plan that involves more than just cuts in pilot wages. They want to make sure they're not being singled out and punished for managements, er, mis-management. Can't say that I blame them.

BTW, Doug will more than likely lock this one to keep away the urge of saying things he's not allowed to.
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its hard to establish credibility when you take a 6 million dollar bonus for simply DRIVING YOUR COMPANY INTO THE GROUND.
 
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its hard to establish credibility when you take a 6 million dollar bonus for simply DRIVING YOUR COMPANY INTO THE GROUND.

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Of course that guy is down the road. This is another guy.

I'm a little surprised that the general opinion is this is wholly a mis-management issue and that no other factors are playing in the industry upheaval.

Keep in mind that back in the mid 90s Delta had a CEO who tried to guide the company into a position to compete in a LCC environment. He got shown the door after employee grumbling. It seems the only leadership anyone accepts is leadership that finds a way to fix things without sacrifice form "me".

Well, that should get the thread shut down.
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Well here the pilots response in the AJC.

http://www.ajc.com/business/content/business/delta/0604/17pilots.html

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In a hint of progress toward a crucial pay cut pact, Delta Air Lines' pilot union says it is ready for a fresh round of negotiations. But the union also wants the ailing carrier to be talking with other suppliers and backers as well.

Union leaders made the decision after hearing from their investment banker and other advisers and getting fresh financial data from the airline during a three-day leadership meeting in Los Angeles..................
 
After reading that article and others by analyst I was wondering when ALPA was going to see the picture of the company is really hurting financially. I dont always buy what the company says because I know they BS with the best of them but the numbers you see from other places all seem to be close. I am glad the union finally got there "new" information. I dont want the pilots or the company to do something that in the long run will screw both.
 
I would love to comment, but cannot say it better than this, from a 767 Captain, on the DALPA board. I hope he does not mind my copying his comments unattributed.

"At what point do you just come out and call it as you see it? Is it a misrepresentation, a half-truth, a mis-speak, or just an outright lie? You know, those "Full Pay to the Last Day" bag stickers Gerry is so "tired of seeing". I signed in early, did a tour of the bag room, and lo and behold, not one to be found. I'm so glad everyone ripped them off their flight kits as soon as his Gerryness deemed them verboten throughout the Reich.

If a man will lie about something so fundamental as that, why should you trust him and worse yet, what else is he capable of? He could have said he "heard about them", or "someone told him", but no, he saw them. In fact, he saw so many of them over such a long period of time that he was "sick and tired of it". Are you sure you were looking at Delta pilots Gerry?

Yesterday Gerry spoke to the press and said his comments on the previous day's conference call were taken out of context. Delta was in better shape than was reported and was in no immediate danger of an imminent BK filing. What he should have said was that I was making comments to scare my employees and manipulate people to put pressure on the pilots to surrender their contract. You media people should be able to make the distinction between the BS I tell the employees and the BS I tell you. Now that crude oil futures are dropping and the gas prices at the pump are following suit, Gerry wants to make his last push prior to the summer numbers coming out.

To review where we are, let's start when Rip Van Grinstine woke up from his 17 year nap and noticed that Delta had a problem. He took over from the guy he was paid a 777 Captain's annual pay to bring here. He ordered a six month review of the operation because he didn't know where we were. He did however know the exact amount of concessions the Delta pilots had to underwrite this yet to be determined operation. With these new G-Scale wages, Delta would somehow survive to do something in the yet to be determined future. Now that we are soon to be entering the 7th month of the 6 month review, what has changed? Gerry doesn't like RJs but we continue to buy and deploy them everywhere, including 2+ hour legs. SWA will get a 14% raise in September. Gerry wants a G-Scale 767 Captain to make less per hour than a SWA 737 Captain will in 2 months. Or less than twice of what a Comair RJ Captain does. That's going to be a hard one to justify. How about our $20 Billion debt that is actually made up of both debt and long term obligations? If you count the $2.5B to acquire Comair and ASA, the $750M for the strike, $5.5B in RJ costs and leases you realize that half of that "debt" number is tied directly to DCI. The same DCI that provides less than 20% of our revenue.

The last thing to talk about is "imminent fear of BK being used to make the pilots negotiate". The pilots have always been willing to negotiate, not capitulate. Ask yourself this: Once Gerry gets this prized pilot deal he speaks so highly of, how is he going to pressure the unsecured creditors to restructure anything? He keeps saying he wants us first, meaning we underwrite all the risk the unsecured creditors take by waiting to see what happens. They will have no incentive unless we start "Fear of BK Part 2". I think ALPA is engaging the creditors and this latest meeting may bring them to the table, but isn't that Gerry's job? He wants us down close to a CAL contract so that NWA has to come down and then mergermania can start. That's the only logical reason for him to pull numbers out of his arse yet doing very little substantive to change the operation of the airline.

It's just my opinion, I could be wrong. If you disagree with me, just call 1-800 GERRYREALLYLIKESPILOTS."

And now, back to your regularly scheduled programming.
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After reading that article and others by analyst I was wondering when ALPA was going to see the picture of the company is really hurting financially. I dont always buy what the company says because I know they BS with the best of them but the numbers you see from other places all seem to be close. I am glad the union finally got there "new" information. I dont want the pilots or the company to do something that in the long run will screw both.

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I think the ALPA leadership is well aware of the situation Tim. There is nothing going on now that is inconsistent with the findings of their earlier analysis. Especially given the sharp rise in fuel prices and the contiuing yield weakness.

I'm still surprised that very little coverage has been given to what Duane Woerth, the head of ALPA said a few weeks ago. He conceded that the industry was sick and that consolidation, that would result in the loss of jobs for some ALPA members, was the only medicine that would save the remaining AL:PA jobs. He asked the government to get out of the way and let it happen. This is stunning from the head of ALPA and shows they do not have their head in the sand.

On the other hand, John Malone, the head of Delta ALPA is in a very tough position. I don't think he feels he can bring anything close to the company postion to the pilots and get them to approve it. Unfortunately, voting on contract issues is a pretty recent change at DAL ALPA. It couldn't have come at a worse time.

This will be a rocky ride I think. That's why I'm leaving. Flying my last flight next Wednesday. So Doug moves up another number. So he's got that going for him.
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And no spraydown for me. I've made it this long without hitting a wingtip (knock of wood).
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It's called "Negotiating in the Media 101".

Seen it before, certainly see it again.
 
flyover are you retiring or just getting out? I know ALPA is aware of whats going on. Trust me I dont think the company has been honest with the pilots or non union employees. I was there during the Ron Allen 7.5 disaster. I saw him take our customer service to a new low. I am sure Mr. Woolman has rolled over fews in the past 10 yrs. If I was you I wouldnt want to freely give up 30% either. I had to no choice when it came to benefits. I had to pay to protect my family. All I am saying is that it seemed for many months now ALPA was saying that the company wasnt in that bad of shape. Now Leo lied to everyone involved. He changed his story every other day. Whatever suited the crowd he was with. The letter I was talking about and if I can get a copy of I will post it the Capt was saying that Delta could sit on its hands if the union didnt talk and then file Ch 11 and there wasnt much the union could do about the contract and the judge would make a decision on how much you guys gave back..I am sure it would be more than what the company is asking
 
Doug welcome back

I agree both sides will do this until someone gives in.

I think that what most of the non union folks see is that we have given up our money (benefit wise) and pilots havent. I know that you have a contract to follow. I am just saying that is the geneal feeling throughout the company. I am sure here in the not so distant future we will be taking a paycut. There are rumors of how much but I know what rumors can do.
 
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Doug welcome back


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Thanks!

Kind of weird speaking English all day!
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I am coming off Supertug deal at the end of July. Long story but they are messing it up personnel wise. I will be over at the north end of A concourse as a bag point driver. Maybe be can finally meet for lunch or coffee
 
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flyover are you retiring or just getting out? I know ALPA is aware of whats going on. Trust me I dont think the company has been honest with the pilots or non union employees. I was there during the Ron Allen 7.5 disaster. I saw him take our customer service to a new low. I am sure Mr. Woolman has rolled over fews in the past 10 yrs. If I was you I wouldnt want to freely give up 30% either. I had to no choice when it came to benefits. I had to pay to protect my family. All I am saying is that it seemed for many months now ALPA was saying that the company wasnt in that bad of shape. Now Leo lied to everyone involved. He changed his story every other day. Whatever suited the crowd he was with. The letter I was talking about and if I can get a copy of I will post it the Capt was saying that Delta could sit on its hands if the union didnt talk and then file Ch 11 and there wasnt much the union could do about the contract and the judge would make a decision on how much you guys gave back..I am sure it would be more than what the company is asking

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Retiring Tim, 10 years early.

Everyone can have opinions about the "true" state of the company. Personally I thought the original ALAPA financial analysis was pretty clear in laying out the future of Delta. But on the line many people I spoke to thought it painted a rosy picture. Goes to show you.

My main concern is that I don't think any company can survive in this environment unless everyone is pulling in the same direction. The threats to individual companies are external. Any energy spent fighting internal battles is wasted and extremely counter-survival. UAL is the poster child for that. And I don't see a basis for DAL getting back on track. You can lay it at management's feet I guess. I think Leo's leadership was terrible after 9/11. He should have come to the employees right away and educated them on what was at stake. And of course the bonuses were indefensible and broke all trust. But that's no excuse for individual employees and employee groups going self-destructive. Every one has to take responsbility for their own actions.

I was hoping Delta would be able to stand and fight. I was up for it. I don't see it happening now, and I sure as hell hope I'm wrong. Probably am.

BTW. I know 7.5 was a "disaster" but can you imagine where Delta would be now if we had stayed on Allen's goal of having competitive costs? I know it would have been tough. But given that the failure rate for airlines without competitive costs will be 100%, it would have been worth trying.
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Also, I don't think the coming financial restructuring at D is the apocalypse. Delta has some tremendous assets, especially ATL, LGA, JFK. Much of the company will survive consolidation, no doubt. But however they get there it will be leaner and meaner. I love the old Delta and will miss it but am excited about new opportuities. Maybe this old dog can do some new tricks (freight dawg?)
 
Well congrats on retiring. When is your last flight? Oh yeah dont let the city firetruck hit you plane like they did the retiring Capt a few weeks ago.
I like the old D also when thing were kept simple and everyone knew what was going on. The secrective crap is old. American seemed to tell there folks up front we need this or that and they got. Leo had no plan B and that is was was his downfall I dont care what anyone says. As far as the bonuses I wont even go there. We all felt the same pilot or not pilots. I imagine there well be quite a few consolidations of airlines in the next 5-10 yrs. I just wish the would offer me a package to retire. I need a 20 year package though..haha. I tell though I have been looking at other possiblities also. I not going to wait on Delta to make the decision for me
 
It's always the evil employees who need to take pay cuts. I would just once like to see the guys who say that outline what they have done before they ask their employees to take pay cuts, and what kind of pay cut they will be taking.

Seems to me that the smart thing to do, if you want to have good labor management relations, is to say, look, here is what we have done before we came to you. I'm open to new ideas, so tell me what else we can do instead of cutting your wages.

But nope, they just say, we need concessions from you.
 
Tony, Tony, Tony, but they teach in "Evil CEO School" that you always blame labor first and foremost.

Rainstorm shut down your main hub? It's big labor and their incredulous insistence on not flying in inclement weather. If the government would help crush organized labor, the airline could launch the aircraft into a thunderstorm and decrease delays.

Or if your flight is late, it's because labor is staging a work action.

Or if people don't want to buy your product because someone else is producing an better product at the same price, that it's labors fault.

Next time I get a poorly made Dominos pizza, I'm going to call up the franchise and tell them that their pizza chefs are making too much!
 
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Well congrats on retiring. When is your last flight? Oh yeah dont let the city firetruck hit you plane like they did the retiring Capt a few weeks ago.
I like the old D also when thing were kept simple and everyone knew what was going on. The secrective crap is old. American seemed to tell there folks up front we need this or that and they got. Leo had no plan B and that is was was his downfall I dont care what anyone says. As far as the bonuses I wont even go there. We all felt the same pilot or not pilots. I imagine there well be quite a few consolidations of airlines in the next 5-10 yrs. I just wish the would offer me a package to retire. I need a 20 year package though..haha. I tell though I have been looking at other possiblities also. I not going to wait on Delta to make the decision for me

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Absolutely agree with your last statement Tim. I'm definitely not being a hero by leaving. Like you I had to make my final decision based mostly on what's best for the family. If I was single I'd be going other directions (probably iinvolve something with pontoons in Alaska).

BTW I don't hink there is much secrecy anymore. Grinstein has no choice but to lay it out. The company is on a short time line to BK, he can only get hurt by BSing. Leo on the other hand kept painting a rosy scenario when he knew before 9/11 that yields were diving and our cost line was crossing our revenue line. I'll never understand that guy.

I misspoke, my last flight (with D) is next Thursday. Late. That's all I have to say about that. Nothing but good memories about everyone at Delta. So it will be bittersweet.
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I will be there next Thursday night.. I am still on midnight with the Supertug. Maybe I can get over that way and say hi and congratulate you on surving the airlines this long
 
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