Delta Air Lines to Build Heavy Maintenance Facility in Queretaro, Mexico

[topDawg]

....I didn't say DL is a panacea.... I have simply said that DL's model has done a better job of retaining jobs and increasing pay post BK than any other legacy carrier's contentious traditional labor model.
Further, the 10 people you have cited either have not believed that a union could change the situation or else they can't find a majority of DL employees who agree with them that is a necessary step.

It is that simple... quit trying to pin on my that I think every DL employee is happy and doesn't want to see things differently.

In the absence of enough employees who are willing to vote in unions, those employees will have to figure out how to work within the system that exists and which is generating better financial benefits for DL employees as a group than are other airlines.

I suspect also when earnings are released next week and the $175 million in profit sharing hits home, that a lot of people who might otherwise have something to complain about will suck it up. An average of more than $2000 per employee for just one quarter is nothing to sneeze at. The only other airline that has reported financial results for the quarter that include profit sharing was WN and their profit sharing for the quarter amounts to less than 1/3 of what DL employees will pocket.

your kidding right? plllleeeaaasssseeee tell me this is a joke? your going to compare Delta's profit sharing to WNs....how about we bring up WN vs DL pay and other QOL of life? r does that "not count" as per your normal

 

[topDawg]

Yes they do.

"Partial" outsourcing already happens in DTW & MSP. MCO had Comair handling a large portion of flights until the pull down of the mini hub there. DFW was a hub, and of course was outsourced as part of Operation Clockwork (or whatever it was called). LGA has M/L workers working part of the operation w/the Shuttle vendored out. JFK has parts of the operation outsourced as well. I agree with you that ATL would likely be the last to see large portions farmed out (though DGS does have a significant presence there), but no one's immune....

to add on to this. (And a few more things)
1) DFW did go DGS while it was a hub. After 7.5 but before it was shut down. Plan was for SLC/LAX/ATL/CVG to fallow.
2) Delta has been very, undelta, with Dallas. (and the first sign of change) They have nearly no mainline employees at the airport. The norm use to be to keep a line station, a FA base(or a AFP) and ramp. None of this has been done. truly sad. Still have a lot of friends that live in Dallas and fly to ATL 4-5 times a week for work. Some of which could likely hold a spot in a small line station.
3) Hope you don't hate me for my AFL-CIO comment kev.
4) few things for WT.
4a) DGS is growing, and growing quickly in TOC. They have been adding A&Ps in the hangar (while mainline guys get forced out.....) and the back shops. Like ASMs...the engine shop is magically staying mostly free. Amazing how much ass kissing Delta does to those guys.
4b) you keep saying me and kev can change things....its not nearly as easy as you say. Delta has a little bit of a history of removing those people....you know, 2 sec late to work. "oh well.....". Plus, Kev has an easy job....I would happen to have a up hill battle due to fear from delta plus the engine shop and the stupidy that blames Eastern on the IAM and people like you who think what they think about the AMFA. Its nearly an impossible task...tell some turn over happens and people look across the way at Southwest. Be like the old days when EA was around.

and josh your pretty much right on about 7.5.

and one more for WT.
check out the real story from EA. Youll find that when the IAM owned 25% and pretty much took over for lower level management they made money. A true story on how labor can in fact work with the top end.
[background=rgb(27, 55, 76)]Part 1 [/background]http://www.youtube.com/watch?v=MSSPAM3vauw&feature=player_embedded
[background=rgb(27, 55, 76)]Part 2 [/background]http://www.youtube.com/watch?v=mya5HUDOWX0&feature=relmfu

Kev...you may like the links too.

 

[737823]

The thought of writing about an ATL outsourcing would likely make Kelly Yamonouchi's (sp?) head explode.

She must be the ATL equivalent of Terry Maxon at the Forth Worth Star Telegram? It seems all Terry covers is AA, must have a cozy relationship with their PR department...

It's marginally better than a fully outsourced station (of which there are plenty, of course). The biggest issue is that as benefitted positions are vacated, they are being replaced with Ready Reserves. Any net growth in a station's numbers is achieved the same way.

DL does a decent amount of ground handling for other carriers. I'd like to see more. I'm going off memory here, but for AS, he handle them in:

BOS/AUS/DFW/EWR/HNL/IAH/MSP/STL/TUS. Maybe SAT as well?

Some of those are above wing only, and some are above & below both.

We also do F9 in:

FNT, MSN, and PIT. IIRC, PIT is above & below wing. FNT & MSN are below only.

There are others as well (HA is one in a couple places), but w/o looking, I'm not sure which ones...

In Asia, there are a lot of M/L employees- certainly NRT jumps to mind. No ramp, though. Same story with Latin America/The Caribbean (SJU being an exception).

In Europe, there aren't as many, if any at all, outside of a station manager. Pretty sure there aren't any in CDG, & AMS was handled by KL for NW. Not sure who does it now. LGW was outsourced a long time before the merger, and I have no clue about LHR...

External hiring may only be to RR positions but doesn't DL move people into FT/PT roles or are these movements few and far between? I can see how it is an area of concern for you especially coming from many years at NW with scope and other things bargained for. Other than the stations that have transitioned to third party handlers, has DL forced anyone out of FT position to RR? At least if they are letting people in the PT/FT roles stay that it is the right thing to do but I imagine the stations that were transitioned probably had many senior higher paid FTs and this way their way to get them to leave, I could be wrong. You do realize that all across this country compensation and benefits are being changed, its no different than colleges using adjunct professors replacing tenured faculty upon retirement or grandfathering legacy benefit programs for some employees.

I'm glad the in sourced work is good for you guys. In BOS they do a very nice job handling AS, there is a separate counter with the AS signage, kiosks, bag sizers, etc but the people behind the counter are in DL uniforms. Always uses the same gate, A18, unless both PDX flight and evening SEA flight are on the ground at the same time. The evening is a busy hour in that terminal, several international flights leaving and the usual evening rush of people trying to get home especially at the end of the week.

That's too bad about the large European stations, I guess with the JBV it is more economical to have KL and AF handle those stations, DL probably does the same stateside. Also, pretty sure DL no longer serves LGW. They consolidated to LHR over the years as slots became available from Open Skies, dropped the ATL and CVG routes in the past few years from Gatwick.

Josh

 

[737823]

Just wanted to note two things.
1) the UAL thing. Is it better than RR? well the question is what do they get other than the $10 an hour. If they get days off, 401K, flight bens, heath care? then hell yes. If its just flight bens and pay...then one would have to look at what the move up is like. IE is it like RR where, thats what youll do forever(unless your in ATL) or do they flow up fairly easy?
2) the second question was how many have dumped a hub, the 2nd largest to complete outsourced below wing?
AA (and all union carriers) have SCOPE that allows some station to be contracted out. IIRC AA's was 10 flights a day or something like that. Delta, however has cities like RDU as DGS that would never float at UAL or AMR.....with or without BK. WT things that rampers should be happy about this though...which is the main problem.

The UAL position has benefits and is of course IAM represented. My point though is how much better is that arrangement than RR? Look at what the benefits cost and for someone working 20 hours/week at that wage it would be much of their salary. I know you guys place a large value on the representation. Kev posted weeks back that DL does not cross utilize while NW did extensively. Maybe the economies of scope to be gained don't materialize and it depends on the station and volume of flights. It will be interesting to see in the new UAL agreement if a similar RR program is introduced like at DL and HA.

Josh

 

[Kev3188]

Just wanted to note two things.
1) the UAL thing. Is it better than RR? well the question is what do they get other than the $10 an hour. If they get days off, 401K, flight bens, heath care? then hell yes. If its just flight bens and pay...then one would have to look at what the move up is like.

The difference is that the UAL positions are benefitted ones, and while the entry rate is low, they move up the pay scale, unlike RR's at DL who never move off the first step...

Delta, however has cities like RDU as DGS that would never float at UAL or AMR.....with or without BK. WT things that rampers should be happy about this though...which is the main problem.

Exactly! I've said it before, but it bears repeating; When DL puts M/L on the ramp in a place like CLT or RDU, then maybe I'll take their talk of "insourcing" seriously. Until then, it's all lip service intended to delude the masses.

oh and i want to add...the reason the TWU and AFA are doing a joint union. During the last run they would have had the votes with the write ins. Once this election happens go ahead to expect to be laying on the floor crying.....yet another evil terrible union will "take over"

I'm not sure the AFA will be able to recover from A] The absolute demonization they faced at the hands of DL, and B] Their actions post-election. Time'll tell, I 'spose, but I think the IAM drive has a better shot w/in IFS (mainly due to the latter)...

Two things. For real....stupid and a very low blow.
part two....me thinks your being bad on the net....something tells me you wouldn't say this to an ex NWA AMTs face.....

He wouldn't. IMO, this was simply a not very well thought out post designed to provoke GQ.

3) Hope you don't hate me for my AFL-CIO comment kev.

I do not.

4b) you keep saying me and kev can change things....its not nearly as easy as you say. Delta has a little bit of a history of removing those people....you know, 2 sec late to work. "oh well.....".

^This^

Some like to think that any single person can just waltz into the GO and affect change. It doesn't work that way; especially if you're platform runs counter to what the company wants.

Plus, Kev has an easy job....

I should be so lucky!

As for the video, I watched it a few weeks ago. It's excellent (Frontline's one of my favorite TV shows, BTW). The most telling part to me is the section where the employees had real empowerment for awhile, and it's almost immediate positive effect on the operation. Trust people to do the right thing, and they almost always will. Treat them like they're stupid, and they'll go out of their way to prove you right. Sad that our company has opted for the latter in many areas.

For those that are PMNW, compare/contrast the autonomy you had to get the job done w/what you have now...
[background=rgb(255, 255, 255)]


[/background]

 

[Kev3188]

She must be the ATL equivalent of Terry Maxon at the Forth Worth Star Telegram? It seems all Terry covers is AA, must have a cozy relationship with their PR department...

The same! Lol.

External hiring may only be to RR positions but doesn't DL move people into FT/PT roles or are these movements few and far between?

Few and far between, unless you want to go to a place like LGA or ATL...

Other than the stations that have transitioned to third party handlers, has DL forced anyone out of FT position to RR?

They haven't done that...yet...

At least if they are letting people in the PT/FT roles stay that it is the right thing to do but I imagine the stations that were transitioned probably had many senior higher paid FTs and this way their way to get them to leave, I could be wrong. You do realize that all across this country compensation and benefits are being changed, its no different than colleges using adjunct professors replacing tenured faculty upon retirement or grandfathering legacy benefit programs for some employees.

I certainly recognize the shift in employment models, and while I have no delusions about the RR program going away, I definitely think it needs some balance. It's rampant unchecked growth is what concerns me most.

I'm glad the in sourced work is good for you guys. In BOS they do a very nice job handling AS, there is a separate counter with the AS signage, kiosks, bag sizers, etc but the people behind the counter are in DL uniforms. Always uses the same gate, A18, unless both PDX flight and evening SEA flight are on the ground at the same time. The evening is a busy hour in that terminal, several international flights leaving and the usual evening rush of people trying to get home especially at the end of the week.

That's too bad about the large European stations, I guess with the JBV it is more economical to have KL and AF handle those stations, DL probably does the same stateside. Also, pretty sure DL no longer serves LGW. They consolidated to LHR over the years as slots became available from Open Skies, dropped the ATL and CVG routes in the past few years from Gatwick.

NW & KL did a sort of "swap" of jobs as part of the JV, with most positions in the US becoming NW, and vice versa in Europe. If we even have the ex-ATL flight to LGW left, I'd be surprised- I just used it as an example...

The UAL position has benefits and is of course IAM represented. My point though is how much better is that arrangement than RR? Look at what the benefits cost and for someone working 20 hours/week at that wage it would be much of their salary. I know you guys place a large value on the representation. Kev posted weeks back that DL does not cross utilize while NW did extensively. Maybe the economies of scope to be gained don't materialize and it depends on the station and volume of flights. It will be interesting to see in the new UAL agreement if a similar RR program is introduced like at DL and HA.

Cross utilization can be wicked efficient. Why DL refuses to adopt it is beyond me. I guess they prefer to add line item expenses (3rd party ramp, cleaning, etc.) to a station's budget instead of looking to offset the fixed costs...

 

[WorldTraveler]

This thread has become quite active in the past 24 hours and with additional comment from Dawg and Josh’s participation, it is worth taking a 40,000 foot view of the current discussion ONCE AGAIN in light of the videos and refocus what the key issues are in the industry – and at Delta.
First, Dawg, THANK YOU VERY MUCH for the two Eastern links…. They should be required watching for everyone on this forum. At least once a year. The whole thing.
The reason is clear – EA became the largest US carrier that fought the hardest to unsuccessfully adapt to deregulation – and as the video notes – many of the reasons that was so started long before deregulation.
The reason why the videos should be required watching is because the themes come up over and over in the industry and are still key issues.
It is so relevant to Delta because DL and EA were archrivals in the south…. And the two carriers took VERY different paths – with very different results. I was hired by DL in the midst of the EA crisis, was at work at DL the day EA shut down for good, and have watched how DL has reacted to EA’s grounding and the same issues that the video raised as they affected DL, EA, and other carriers.
EA’s crises played out on DL’s doorsteps and many DL employees’ opinions of labor-mgmt relations were shaped by watching what was happening at EA; DL hired many ex-EA employees who vowed they would never support a union again. DL benefitted greatly from EA’s problems and now operates from many of the same gates at ATL and other airports that EA once used.
It is also highly noteworthy that labor-mgmt conflict at other airlines is shaping another generation of DL employees who look at labor-mgmt conflict at AA to a great extent, and other airlines to a lesser extent, and have to put a very high price on the freedom from labor-mgmt conflict that is part of the traditional DL employee relations model.
The videos should be required watching for AA employees because there are so many common themes between what EA and its employees experienced and what AA employees are experiencing, in part because AA mgmt appears to be taking the same track regarding restructuring and adaptation that EA did – which was notably different than what DL has done.

Fundamentally different approaches to running an airline

At the end of the 2[sup]nd[/sup] video Robert Reich, former US Labor Secretary and economist, asks a very key question: “What is the point of the American corporation? Is it just to move assets around to maximize revenue or does the corporation represent a network of obligations that, working together, create wealth?”
Various mgmt groups in the airline industry have obviously taken different approaches to that question…. Lorenzo and Texas Air (including EA) took an adversarial approach to labor relations to maximize profits while other carriers, notably CO, post BK 2, DL for most of its pre-deregulation life until the mid 90s, and then again post NW merger, as well as WN have taken much more the approach of a “network of mutual obligations”
LOOK AT THE TRACK RECORDS of carriers who have used each of these two approaches and it should be obvious that the “network of obligations” model has succeeded for more stakeholders – including employees – than the “maximize profitability by shifting assets around including thru confrontation” model.
CO had a 10-15 year period when it was at the top of the industry – but part of why CO sold out and why it couldn’t continue the momentum was because CO’s success came in part because its labor costs (not wage rates – a distinction made in the EA video multiple times – they are not the same thing) were lower post-BK than were its peers. By the time CO merged w/ UA, it had lost much of its labor cost advantage and was facing a competitive environment far beyond CO’s capabilities, in part because of the DL-NW merger and because DL was focusing enormous attention on NYC, a market which other US network carriers had largely ignored for the same 10-15 years in which CO built NYC into a superhub in the largest aviation market on the planet. CO’s story, while worth studying, was one of a capitalizing on opportunity when it could BUT CO COULD NOT ADAPT and SURVIVE LONG-TERM – and that is absolutely key to the discussion.
WN was created out of a concept of labor peace and marketing genius - along w/ some financial brilliance as well, esp WRT to hedging in the 2000s - that has allowed WN to grow to become the largest and most successful low fare carrier. But there remain a lot of people who extrapolate WN’s success in the past onto what will happen going forward. WN is a mature airline - they charted their strategic moves to arrive at their current size JUST as cost and competitive pressures began to limit their ability to do what they did in the past. WN can’t and won’t be in the future what it was in the past. WN is very well-run and will adapt, but WN is becoming far more like a legacy carrier in its costs - including high topped out labor costs - and its operations – more hub-like w/ more presence in key markets. WN employees will simply not see the same level of wage and benefit growth they have seen in the past; in fact, WN will have to attack some of the same employee salary and benefit growth issues that the network carriers faced years ago… WN’s labor costs are on track to far exceed those at the network carriers in a few years and WN cannot generate the revenues and efficiencies necessary to cover those costs.
We can talk about AA and UA and US … the trend is obvious that AA is taking a very aggressively, EA/Lorenzo approach to restructuring that will make it very difficult to expect any labor-mgmt cooperation for years to come, if ever. UA is really DL’s closest competitor now but they continue to hold onto the BK-imposed contracts because they would wipe out all of their current earnings if they brought their employees, esp. the pilots, up to DL levels of pay. US already knows this and their mgmt no longer even pretends to have any desire to raise US employees’ pay levels – unless they can tap into a huge new source of revenue that will change the economics for US. As I have noted before, US is dwarfed by larger, more powerful network competitors but also does not have costs low enough to be a low fare carrier, of which there will be fewer and fewer in the industry.
DL is the only remaining legacy carrier that has had a largely peaceful relationship w/ labor for its entire period, that has successfully grown its network size while keeping employee pay at the front of the industry for most of the time, and has benefitted long-term from the failures of other carriers while also being strategically aggressive enough to win in the marketplace against carriers large and small.
Let’s look at some key points from the EA videos because they highlight why DL is different and has succeeded and why other carriers continue to be unable to accomplish what DL is doing.
The implications for DL employees – including Kev and Dawg – are enormous based on an understanding of these key principles.
The video accurately notes that EA struggled repeatedly with debt, fare wars and the competitive environment, and labor-mgmt efficiency.
EA’s debt grew rapidly during early deregulation in part because EA took the tact of placing the then-largest order for new aircraft in the industry. Other competitors did not spend near as much on aircraft as EA did, including DL. EA struggled for years to pay for its aircraft, including obtaining the financial benefit from that purchase. EA’s problems were compounded because fuel prices dropped after they had spent billions on new aircraft. AA employees should focus very carefully on this discussing regarding debt and aircraft purchases. DL has not only been far more conservative financially but now has the ability to neutralize a significant part of the cost advantage other carriers such as AA gain from new aircraft though operation of the refinery which will lower DL’s fuel costs and justify keeping older aircraft longer, keeping debt levels lower.
EA continually struggled to compete with low fare carriers – and ultimately Lorenzo’s strategy was to try to turn EA into a LFC and buy others – People Express and Texas Int’l – in order to reduce the impact those carriers had on EA. Attempts to transform network carriers into low fare/low cost carriers have largely failed in the US and acquisition of low fare carriers by network carriers has always resulted in the failure of one or the other of the two long-term. AA employees should once again read this paragraph carefully.
EA’s inability to keep costs low enough to compete w/ low fare carriers resulted in endless wars with labor in order to cut costs that was capped w/ Lorenzo’s reign and the final “war” that ended in EA’s failure. The EA-style confrontational, contentious labor-mgmt model to cut costs is the normative model in the US airline industry .

DL’s differences

I have said many times and will continue to say that DL’s approach to running its business is different from other airlines with distinctive that are rooted in its history and has resulted in a stronger, more stable airline compared to DL’s peers and that strength and stability HAS benefitted DL employees.
Debt - DL has long been more fiscally conservative than its peers, as noted. Its current plan to do 2/3 of its of fleet restructuring with used M90s and 717s says that DL will spend the least amount of money on aircraft to get the job done… and does not buy the notion that the latest technology is necessary in order to successfully compete, also demonstrated by its decision to push the 787s ten years past the delivery dates NW signed for. I’m not sure why some people don’t see it, but ability to manage debt at a corporation is no different than in your home or in a country. DL is reducing debt to levels closer to levels (size adjusted) similar to WN while its network peers are taking on more and more debt. The result in five to ten years should come as no surprise… .DL will grow while other carriers will continue to fail.
DL’s focus on keeping debt at a minimum is the same as its focus on being the lowest CASM network carrier on comparable routes. Air transportation is more commodity than anything else… the lowest cost producer will win. Low fare carriers will focus their efforts on other carriers if you are the lowest cost carrier; the lowest fare network carrier will be able to move significant revenue away from other network carriers. DL has grown its revenue over the past 10+ years largely due to DL’s commitment to those principles.
Notably, DL and NW shared very common goals regarding both debt and cost when they merged. NW’s culture was dramatically changed by the leveraged buy-out which straddled the company with enormous amounts of debt – and which required breaking many of the industry labor standards in order for NW to survive – and that is exactly what the LBO was intended to do: transfer wealth from labor to the debt holders in a classic example of reshuffling of assets to produce more wealth, exactly as Robert Reich spoke about in the EA video.
By the time of the merger, DL and NW had almost identical labor CASMs and very similar balance sheets, adjusted for their different sizes. DL’s financials were weakened by the competitive changes of the early 2000s while NW’s still showed signs of stress from the LBO decades earlier but NW fared better post 9/11.
Competition w/ low fare carriers. DL decided early during deregulation that it had no choice but to compete aggressively w/ low fare carriers. FYI, Josh, Leadership 7.5 was an attempt by DL mgmt to reduce DL’s CASM to 7.5 cents/ASM, the same level WN had at the time. 7.5 also came a few years after the Pan Am asset purchase which cost DL billions of dollars while they restructured the new to DL Atlantic operations all during the Gulf War.
From an employee standpoint, 7.5 hit ACS hard, esp. the ramp…. More on that later. But the pilots also signed a contract – not willingly – to use the 737-200s to form Delta Express, DL’s attempt to defend its position in Florida under a concessionary contract that would have either seen massive pilot layoffs or retaining the 737 pilots working at low rates. DL Express led to Song – which was more targeted at JetBlue but the theme was the same – DL intended to aggressively protect its markets from low fare carriers and it would obtain the labor costs necessary to do so.
The results of DL’s aggressive approach w/ low fare carriers is that DL has had less low fare carrier erosion of key markets than has any other network carrier.
DL’s growth at LGA is in part targeted at B6; DL is adding more than enough capacity at LGA in markets which can be flown from LGA to accommodate many of the local passengers B6 now carries from Manhattan. DL’s focus is clearly to regain the share it lost to B6 but also to move passengers from B6 at JFK to DL at LGA, the preferred airport for inside the perimeter markets from NYC.
WN and DL continue to live in relative peace and focus their competitive efforts on other carriers instead of themselves.
The key principle is that DL has aggressively adapted to the reality of the changing marketplace… and DL’s employees have had to make changes in order to adapt, changes that most unions would not have supported. But DL’s financial and strategic success is due in very large part to it adaptation to the marketplace – and its use of its labor flexibility to adapt.
And number 3 is labor-mgmt peace and cooperation. Despite confronting a lot of challenges which other airlines simply ignored, DL has maintained a far more cooperative, peaceful relationship with its employees than has just about any other legacy airline. That is just the reality. And DL will JEALOUSLY guard its ability to adapt to the market using its labor flexibility……

Part 2 to follow with more specific responses to the issues raised in this thread.

 

[WorldTraveler]

Part 2
When looking at the specific labor issues that Dawg and Kev and others continually raise, let me highlight and break out a few basic principles that govern DL’s labor relationship TODAY.
Some of these are brutally honest but they need to be said if we are going to address the issues… they are MY observations but I believe they are accurate.
First, like it or not, but DL recognizes that the pilots are the most critical group to allow DL to achieve its strategic and financial objectives. DL has clearly made the decision that it will increase the pay of pilots where it needs to in order to achieve its objectives… and no longer believes that every pay raise the pilots get should be matched in percentage terms by raises among other workgroups as it once did. DL decided w/ the NW merger to obtain agreement w/ the pilots before the merger. There is a different relationship between DL and the pilots today than there is w/ other workgroups… brutal as it may sound, that is the reality.
Second, DL does not really want to create an environment for most employees to stay around for a 30 year career as was once the norm in the industry. No offense to any employee or group, but most airline jobs do not require a 30 year length of time to obtain proficiency nor is there any significant incremental benefit in having a 30 year employee over a 10 year employee. However, even among topped out, FT employees, the cost of that employee soars in the final 10 years or so of a 30 year career due to health care costs and retirement obligations (less so now that DB plans are not offered). DL has aggressively offered early out packages to incentify high seniority people to leave but, make no mistake, that DL is not incentifying any employee to stay to the full 30 year, age 52 or higher career that was once the norm. That principle is significantly at odds w/ union objectives. The 5[sup]th[/sup] and 6[sup]th[/sup] week of vacation were removed in part to make it less and less comfortable for DL employees to settle in for that last 10 years while continuing to see increased benefits.
Third, DL is not the least bit focused on protecting future jobs at the expense of losing its ability to compete long-term. DL is highly focused – and has done a better job of protecting CURRENT employee jobs than other airlines that have tried to meet union objectives to protect CURRENT and FUTURE jobs – yet have failed at both at other airlines in comparison to DL.
Fourth, DL’s labor model is built around labor flexibility and has been before Dawg or Kevin – or I – ever worked there. DL has used flexible staffing models including RR YEARS before other airlines could unions to agree to such strategies. Flexible staffing is not going away and will likely only increase as DL creates an even “more flexible” flight schedule which does not create the same need for staffing year round and from one day to the next as existed for years.
Those are the harder principles to digest but there are positives as well.
Fifth, DL has done a better job of creating a partnership w/ its employees than have many other airlines. DL mgmt’s engagement of the employees to buy the Spirit of Delta and then to fight off the US takeover attempt is the stuff most CEOs dream about. DL’s relationship w/ its employees including its unionized pilots is head and shoulders better than at other carriers because DL tries to keep them involved in the issues regarding the company that matter to employees in a more direct and communicative relationship than perhaps any other network airline does. DL regularly surveys its employees and knows what concerns them, helping to address employee concerns and counter the notion that a union is necessary to fix problems.
Sixth, DL creates a mindset of efficiency that drives its ability to win in the marketplace. As Kev notes, DL is insourcing at ACS just as it does in Tech Ops. Being larger drives efficiency and can make the difference in making an operation more competitive financially. DL employees, including in Tech Ops, understand the drive for efficiency and how that makes the difference in whether they not only keep their work but often times insource work that might be done elsewhere.

Seventh, DL focused on higher base salary than on benefits, contrary to what most unions negotiate in contracts. Higher salaries impact 100% of employees. Benefits are not used equally by all employees. Benefits are also generally cumulative and continue to increase even for topped out employees. DL does not want to see employee costs continue to increase and serve as a reward for senior employees to stay for a career – see above. DL’s benefits are in line with the airline industry or large corporations in the US.
Eighth, DL has succeeded at shifting more and more compensation to profit-sharing…. Yes, Dawg, DL’s total compensation will not top WN’s this year but when you factor in the possibility that DL profit sharing could surpass all other carriers for several years in a row, then profit sharing really does have the potential to not only incentify employees to make the company’s plans work – but also significantly to close the gap w/ the highest paid carriers, some of which like WN have no choice but to pull back on their current very generous compensation packages.
Ninth, DL uses a traditional management leads- workers follow model of relating to employees. Robert Reich in the EA video noted then and it is still true today that there is an uncomfortable relation that is created when expecting labor to assume mgmt roles or for mgmt to give up some of its traditional roles. ESOPs are great – but the airline industry has shown they have never worked. The video touted that, under the ESOP, operations were run w/o supervisors – but labor couldn’t adapt one more time to the financial realities that occur. That is exactly what happened with UA as well. ESOPs work great to create an environment of cooperation and address financial issues in the short-term but they are based on labor contracts which in the airline industry are very rigid and very difficult to change w/o great pain. DL has retained a largely mgmt-led company with labor participation in knowing what mgmt is thinking. Mgmt tries to create win-win situations for DL employees – as WN has done w/ its employees –but no one should think that DL or WN are employee led companies… they are led by mgmt.
Kevin raises the autonomy issue A LOT. I don’t know all of the details of the way NW operated but it was regarded to be one of the more entrepreneurial of airlines WRT to frontline autonomy. It was the exception. Few other carriers operate the way NW did, including DL. NW managed to create a culture that uses that value; DL has not and will not. I’m glad you enjoyed it, Kev, but it very likely will not be seen at DL or most other airlines.
Those are some key principles that govern the way DL runs… some are my opinions from years of watching DL but most are concrete, documented principles that DL has stated are core to the way it operates.
Make no mistake that there was a cultural divide that existed between DL and NW when the merger occurred and continues to remain in the minds of some PMNW people, including Kev.
I understand why he and others think the way they do, but it is also very real that DL’s model and principles do work and DL is not about to give up a working model – or specific components of it – in order to create a model that has NOT worked at many other carriers. The chances of DL changing the fundamental principles above are VERY SMALL.
I have gone to this detail to discuss key principles because it addresses many of the same issues that keep coming up over and over again but here are a key specific issues …
Specific issues
The NE Shuttles are a dying breed. I participated in the launch of the Delta Shuttle in Sept 1991 and the business is very different. DL has tried to adapt to make the DL Shuttle viable but the chances are high that DL and US cannot both continue to support the BOS-LGA-DCA Shuttles for many more years. DL had the option of moving the Shuttle at LGA to the combined DL/US terminals but customers said they want the convenience of the Marine Air Terminal and the Shuttle has remained a separate operation. The Shuttle is now a non-mainline operation using Ejets. It isn’t terribly surprising that certain parts of the ground operation are not operated by mainline employees. The Shuttle also practically includes the LGA-ORD which is also an Ejet operation.
The closure of the DFW hub happened very quickly right before DL’s BK and DL did in fact use the “biggest tools” it had at its disposal to cut costs even though DFW was a hub before. DFW remains a large non-focus city station for DL but it used the same staffing models DL would have had at any other station of that size at the time.
Kevin keeps the issue of the ramp very active on this and other forums but the reality is that DL has not changed its philosophy regarding the ramp since 7.5. DL has honored the PMNW medium city below wing mainline staffing in large part because DL doesn’t want to risk unionization compared to the cost savings.
DL’s commitment to retain the list of medium sized/non-hub non-focus cities that NW and IAM agreed to staff w/ mainline employees does not change what DL did or will do at its own similarly sized cities. The cost disadvantage of using mainline employees at those cities is much smaller than it was before the RR program was introduced, but the reality is that there are legacy paid (topped out FT) employees like Kev in some cities that make more than any contract employee ever will. Those cities – MIA, RDU, CLT, DFW – run well as they are but there is no reason to think that DL will increase its costs to open more mainline cities to DL ramp.
Almost all of DL’s international growth has been done post deregulation and in almost all cases, DL has contract employees both above and below wing. DL acquired a large group of employees in Germany with the Pan Am FRA hub but paid the fees and penalties (to the employees and to the governments) necessary to terminate those employees when DL restructured the PA operation. NW’s operation at NRT was largely built pre-deregulation and staffed w/ mainline employees who remain. DL and NW both have used partners to swap work since the creation of the joint ventures.
DL’s insourcing – whether in ACS or Tech Ops – comes because DL is using the capabilities it already has to maintain its own operation to provide services for a profit to other airlines.
RRs ARE DL employees…. Calling them “outsourced” is factually wrong, plain and simple. There are many employees in the US who do not have benefits; DL happens to have a blended benefit model – some job classifications get little to none such as RRs; PT employees get a bit more; FT employees have the full benefits package. Again, that notion is contrary to union negotiating tactics but it is IN LINE with what other companies offer.
DL does offer some of the most generous pass benefits in the industry including to EVERY employee type and to DCI employees … but notably Kevin does not use his pass benefits and does not consider those benefits to be of value even though it is precisely those pass benefits that are sufficient to incentify many people to work for DL. DL knows the labor market and also offers pay and benefits, even to RRs, that is sufficient to bring in enough people willing to work for what DL offers.
I don’t really get involved in the arguments about which union is better. Every one of them has done good things and succeeded in some situations while missing the mark in others. The real question is whether ANY of them can provide a superior employment package than what DL provides to its own employees who are not represented by unions. So far, DL employees who are in non-union groups have chosen to remain that way except for one or two small groups such as the meteorologists, IIRC.

Yes, Dawg, I have said multiple times that I write things here that I would not say in person… but that doesn’t mean I wouldn’t challenge a former AMFA member about the strategies of their union which did result in the loss of all jobs in a contest that NW ultimately won. In fact, I sat on an int’l flight in the past year next to a former NW-AMFA mechanic who now works for another airline and he has no hard feelings about what took place and acknowledges that the union did not fully estimate NW mgmt’s resolve.
Part of the reason why I continually say that Dawg and Kev do not represent the mindset of most employees is because they do not. Kev works in a PMNW station that would not have been staffed by DL mainline below wing based on DL’s post 7.5 staffing policies. Kev, you also appear to expect to be able to obtain the same job opportunities and protection in non-hub stations as DL offers in large/hub stations. DL ACS employees have understood for decades that progression has almost always meant spending time in a hub in order to move to FT and gain seniority. For many DL ACS employees, working in a small station as a full-time employee has come at the end of your career, somewhat as a reward for all the other crap that was endured for decades, moving around the country and working in large stations. That is not unique to DL in the airline industry. Expectations that small station opportunities should be the same as in large stations is not a value DL has ever embraced.
While there are clearly mechanics who would like to return to airframe maintenance, there are far more than have adapted to doing the work DL does want to keep – such as engine maintenance. The fact that DL treats those mechanics with kid gloves should not surprise you… that is where DL wants to focus its overhaul efforts.
I absolutely believe it is possible for frontline employees to change things at DL FROM THE inside. No, you are not going to walk into the GO and expect everyone to stop and listen to what you think should be done. But there are MANY DL employees who effect change using the mechanisms that DL has put in place ALONG WITH some outside of DL’s control (informal coworker to coworker relationships). But what I can assure both of you, Kev and Dawg, is that any employee who comes w/ a pro-union agenda will not be given the opportunity to be a part of the formal company-sanctioned change processes. It shouldn’t surprise you that DL is fiercely committed to its business model for reasons I noted above… They will not provide opportunities to any pro-union employees to influence other employees. You wouldn’t find that at any other non-union company and I’m not sure why you expect DL would give you the opportunity to effect change based on your pro-union platform.

What should be abundantly clear is that I have laid out a very firm belief that DL has a business model that works, that it has refined over time to meet ITS needs, which does provide a superior employment experience to the vast majority of employees who would work within whatever system they are given, and DL has no intention of changing the fundamentals of its model above.
DL execs DO interact with frontline employees far more than exists at other stations and frontline employees continue to have opportunities to constructively share their opinions with those who make things happen. DL does engage its employees in major employee-related policy exercises. I participated in several during my time at DL. They still do the same thing today.
Finally, let me reaffirm once again that the expression of my opinions is not a personal attack on anyone. I do happen to know Kev and thus know a bit more about the way he operates as a person than other people. But I have the same respect him for him as I do for Dawg and others. Dawg and Kev are both obviously intelligent, articulate, and passionate. I have long believed that it is possible to have very different opinions about key things with people and still interact as friends. That remains my belief.
I have spent A LOT of time writing today because I continue to believe that Dawg and Kev and others have enormous potential to accomplish what they want and improve the situation for DL employees – but there remain significant misunderstandings about DL’s key values – or a failure to acknowledge them and work within them.
I would only be too glad to see Kev and Dawg and others succeed at transforming DL – but I also know full well that they won’t succeed until they understand what has made DL succeed and why any transformation must take place within those values.

 

[blue collar]

I stopped reading about 30 lines down. But one quick question: if DL is providing the 'superior job experience', then why are they only looking to use a person for a limited amount of time and toss them out when they are used up? So DL would basically chew them up and spit them out on their terms? Not for nothing, but it sounds kinda slave labor-ish and not what I would consider the 'superior job experience'

 

[WorldTraveler]

Slave labor is involuntary and unpaid.
Delta employees make the choice to sign on with the company, come to work each day, and to leave when they want.

If you had kept reading, you probably would have read that there is a diminshed value to most airlines from a highly senior employee who is not adding much in additional capabilities that couldn't have been obtained in the first 10 or so years.
Employees are not chewed up and spit out... but they don't receive increasing incentives to stick around... and in fact are given significant incentives to leave early. About 2000 people just left w/ a package that provides up to 10 years of health insurance coverage after separation or until you reach medicare age... not sure all those details are right but that is the gist.... that is a costly separation that other airlines are simply not offering and is on top of the rest of the items in the separation package. I should have been so lucky.

MOST US companies do not want employees to expect to be hired for a lifelong career. It doesn't even happen in places like Japan that were famous for lifelong employment.


Kev,
I'd like to dig into the autonomy issue more. What kind of functions/decisions were you able to make in your same position at NW that you cannot make in a fairly similar role at DL? You can throw in a few other decisions/functions that other ACS people other than in your role have lost the ability to do. Also, please note what people (position) make those decisions/do those functions that you/your peers cannot now do.

 

[700UW]

Part 2

 

[737823]

Did you even bother reading what was posted?

Josh

 

[Glenn Quagmire]

MOST US companies do not want employees to expect to be hired for a lifelong career. It doesn't even happen in places like Japan that were famous for lifelong employment.

That is quite a bold statement. I am guessing that one of your dissertations was on US and Japanese employee motivation trends of the 2000's?

I would think that if a corporation offered a "superior employment experience", they would want that employee to think that they had a shot at a life-long career with that employer.

Maybe it is only me, but I am thinking that a "superior employment experience" would include knowing that I was valued as a long-term employee that was working toward the goals set forth by my employer. If that goal was to make sure that my employment was term limited, my enthusiasm would wane.

 

[700UW]

This thread started out about DL building a JV in Mexico, not how DL treats its employees, how the company manages the ramp, not how NW did things and DL does things, etc..

Not to hard to see it has gone way off topic.

Its not about DL in LGA and leadership 7.5 and every other topic that has been talked about here.

http://finance.yahoo...-150500636.html



Bolded text added by me

 

[WorldTraveler]

That is quite a bold statement. I am guessing that one of your dissertations was on US and Japanese employee motivation trends of the 2000's?

I would think that if a corporation offered a "superior employment experience", they would want that employee to think that they had a shot at a life-long career with that employer.

Maybe it is only me, but I am thinking that a "superior employment experience" would include knowing that I was valued as a long-term employee that was working toward the goals set forth by my employer. If that goal was to make sure that my employment was term limited, my enthusiasm would wane.

Your perceptions are not in line with the thinking of American business and neither are most unions who try to force a model which businesses no longer want or can afford.
Virtually no company is willing to hire a new employee w/ the expectation of employment for life and pay them with incentives that reward lifelong employment such as DB plans and increasing vacation accrual well into the 20th year and beyond of service.

The results are obvious - escalated attempts to remove union influence, the lowest percentage of union employees in the US - and decreasing, and increased attempts by unionized companies to remove as many employees as possible who expect to be retained for a lifetime.

There is also abundant evidence to show that companies which are forced into long-term commitments to employees often close those facilities and export jobs overseas... exactly what some here rail against.
Business needs to be provided an environment where business can grow the economy with American workers w/o creating a financial commitment that spans for decades into the future. If the company can succeed, the company will grow and survive. If employees can adapt, they will thrive in their careers.

Expecting a company to provide life long job security and compensation and benefits w/o commitment on the worker's part does nothing to provide long-term economic growth for the economy.

DL's policies reflect the change in the workplace but have retained more historic, full-time workers when compared to its peers, allowing them to leave voluntarily but providing incentives to leave early.