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

[yoyodyne]

Never said that I liked or agreed with any of it at any airline. It all equals American jobs lost to cheap labor, that can't read the overhaul literature in many cases.

And this is because people keep voting in people to the Congress and perhaps to the executive, that have ONLY the interests of the corporations.

I do recall someone saying something to the lines of : "Corporations are people my friend.."

If you keep electing these people, don't complain about the results.

 

[wings396]

And you know how I vote or who I voted for? Doesn't look like any of your votes have changed the trend either.

 

[WorldTraveler]

Doesn't look like any of your votes have changed the trend either.

which once again should call for a review of what is working and what isn't. If the legislative channel and organized labor aren't getting the job done in terms of keeping jobs in the US, then figure out something that does.

Never said that I liked or agreed with any of it at any airline. It all equals American jobs lost to cheap labor, that can't read the overhaul literature in many cases.

And it is that type of elitist mindset that is why labor doesn't win the argument.

There are HUNDREDS OF MILLIONS of people outside of the US who are fluent in English including in places where these MROs operate. And you also can't say with any certainty that US airline employees are fully fluent in English either,.
Unless you have hard data to show that US airline employees have superior linguistic ability that translates into better work, leave the issue alone.

At this point its only a couple of bays, and Delta does x amount of work in house, but that can easily change. IMHO, its a disgrace for ANY American based company to be associated with a facility in Mexico, or anywhere else outside of the US. I know a lot of companies do it, and I try to avoid thier products, GM included especially after their government baiil out. Within a few years, Delta could decide to triple the size of this Mexican facility, and nobody can do squat to stop them.

and I would presume Mexico is your target because that is where DL does part of its maintenance but whatever other locations that other airlines use are not?

Let me have you look at the charts on page 9 of the IATA link again.

DL spends less on maintenance outsourcing than any other large airline (as of 2009, the most recent report) including WN - who has outsourced more maintenance that many of the network airlines despite trips thru BK.

The campaign to keep maintenance in the US is valiant.... but you might want to bark up the trees of other airlines besides DL first.... you have a lot more to gain.

And since you and others miss the concept that aviation is a global business and US airlines actually do work for other airlines, most notably DL. DL has Tech Ops customers that span the globe.

While you argue about how much maintenance DL should keep in the US, DL is actually bringing more business to the US (and DL's shops) than some airplanes spend on maintenance overall.

Did you pick up on that chart that DL INSOURCES as much revenue to Tech Ops as US outsources? Looks like DL is doing its job to keep maintenance jobs in the US - but it could sure use some help from its peer airlines.

 

[yoyodyne]

And you know how I vote or who I voted for? Doesn't look like any of your votes have changed the trend either.

I know how I vote, and that is all I can do.

 

[wings396]

It's a global business, but you know damn well why the airlines have resorted to going out of the country for their mtc needs. Cheap labor, and it enables them to reduce their own headcount. I don't really have to spell it out for you do I? Same crap with outsourcing res and ramp work. It's been monkey see monkey do with cutting away at decent airline jobs, but being that you were management, I have to remember how you view it.

 

[WorldTraveler]

I get the whole outsourcing argument... I just find it more than hypocritical to argue against what DL is doing when other airlines do far more outsourcing - and little to no insourcing.

The simple fact is that DL is far less of a problem than other airlines - and creates jobs through insourcing.

And a labor contract didn't create that insourcing revenue or put DL in the best position among large US airlines w/ respect to the amount of revenue outsourced.

Those are the cold, unemotional facts; how those cut across anyone's philosophies is immaterial.

The only bias I have is for successful strategies that succeed at keeping jobs in the US, not rhetoric that can't be supported by actions.

 

[Glenn Quagmire]

What is unchanged is that DL IS NOT moving the TOC

I did not say they would move the TOC. I think that they may eventually move some of the work from the TOC and downsize it. The problem with the concept of increasing the IT or F gates is that the waste treatment plant is on the west end of the TOC. They could do away with the plant if they outsourced the engine overhaul plating operations (and the site is clean). Getting rid of plating/plasma spray operations (as well as paint) to Mexico makes sense from an economic standpoint. They would also have to move the test cells (not all that difficult).

 

[WorldTraveler]

thank you for clarifying, but these are your exact words

I am sure WT will pan this as a brilliant move, while Southwind will be completely confused since this is not covered under his talking point checklist.

This is not good news for the TOC in Atlanta. It sounds like this is the beginning of the wholesale move of that operation across the border.

Not only have I not panned the Mexico JV as a brilliant move, but I have argued as to why DL is not only doing a better job of limiting the amount of maintenance outsourcing but also growing its presence in the MRO space, which is EXACTLY what the Mexico project is bout.

The heart of the TOC, including the engine plants, is on the west side of the TOC complex which includes the water treatment plant. Given that engine MROs are the most profitable part of the operation, it would be impossible to move part of the TOC - the part that generates the highest margins in order to accommodate more terminal space while leaving the hangars on the east end which would be the easiest part to move - even if they are the newest buildings in the complex.

If the west end of the TOC goes, the whole thing is gone, and the chances are very high that those jobs will not end up in another location in the US if DL is forced to move.

The very part of the TOC that is most desirable for expansion of the terminal facilities is also the part of the TOC that provides the greatest revenue from insourcing, in a strategy that DL has done better than any other airline to preserve US based maintenance jobs.

 

[2ndGENAMT]

WTs link

http://www.iata.org/workgroups/Documents/MCTF/Form41_Report_FY09.pdf

IMO if you look at the world fleet growth it just seems to me that the airlines are gearing up for future maintenance need.. They are machines and will break!!

 

[Glenn Quagmire]

My apologies. I stand corrected.

The wholesale move would be the airframe overhaul/HMV first. If that goes well then why not the engine overhaul?

EO brought up the gate thing. I had never considered the gate expansion, so I tried to see how that would fit. You are correct in that if they move the engine overhaul, the hangars left would likely be relegated to a line drop in/light check operation where that much space would not be needed. CO runs a similar operation to that at IAH.

I hope for my Delta friends (non-scab) that this does not happen.

 

[topDawg]

Actually, Glenn, I didn't real the statements you cited with pleasure - and have to keep the same sense of "uh-oh" front and center in mind. There is enough of a history of maintenance outsourcing among US airilnes to not allow anyone to let their guard down.....

I'm not sure this is as big of a deal as it might seem.
​lol and this is what will lead to a lot of people out of a job. Just like the "study" to send HMVs and JT8s out. Just like them saying they wouldn't close Dallas....it has the best numbers in the system. They couldn't fit all the Tampa work in Atlanta. etc. etc. etc. Does anyone here know what the definition of insanity is? How many times does it take?

- previously, DL said the investment (IIRC) for the maintenance joint venture would be $45M. If that number is correct, it doesn't come close to building facilities anywhere near the size that would be needed to significantly compete with - let alone replace - the TOC. Can it be more than a couple bays? 7 bays....thats all of the PSV bays plus 2. ie all of the *big* work done in Atlanta would fit with extra Bays
- your quote left out a key qualifier that was put in the original sentence "lower maintenance costs without compromising the very high quality work that Aeromexico provides Delta." That sentence does not mean, and probably should not be accurate construed as meaning that DL will send any more work out the door than it already does; it might not even mean more work for DL than what AM already does. Why? If AM does the HMVs so well(and they don't. but thats for another day) but what will stop them from learning how to do PSV?
- previous press releases about the maintenance joint venture said that the purpose of the maintenance JV was to allow DL and AM to profitably bid for MRO work which neither can do fully on their own today - either because of a lack of capabilities on AM's part or costs above levels to be profitable on DL's part for airframe overhauls. As has been noted, DL does insource airframe overhauls now, but only as part of larger maintenance contracts. This partnership should allow DL to bid on larger maintenance contracts but leave the airframe overnhauls to AM while allowing DL to do more engine and component maintenance.
so now the Airframe guys should be happy for the engine shop........AGAIN. "hey you lose your job....but we will still do Engines!!"
- DL already sends alot of airframe overhaul work to Asia where the cost of just getting the plane there is much, much higher than it will be to Mexico - and labor rates in Mexico are lower than they are in SIN and HKG, places where DL sends overhaul work today.
You are a Delta PR beast. "hey yours getting screwed....but now it should cost delta less to do so....wooooooohoooooo. GMAFB
Is there the risk DL could send more of Tech Ops over the board? Anything is possible.that seems unlikely. Since DL already runs the largest airline MRO in the Americas, doubling the size is no small feat. Given that DL already keeps a higher percentage of its work inhouse than any airline except AA - who is itself in the midst of a major process to outsource work - DL would have to move an aweful lot of work away from DL employees to reach levels comparable w/ the rest of the industry.but your not looking at the airframe side. Yeah stuff like overnights will still be done in the US, but the big thing Delta still has is PSVs(think C-check) and it is now very possible they send that to Mexico now. That would wipe out a good bit of the hangar floor.

Let's also remember that all of the other airline mechanics had contracts which their employers through out in BK or have walked away from systematically. you just can't help it can you. Question....what is it going to be like to see Delta rape its MX side without a judge? What will be your go to punch line then? "uh well at least it didn't happen all at once"

DL has the lowest maintenance costs in the industry by CASM. DL has the ability to build on what it does well instead of throwing the whole ball of wax out the door.

Remain guarded? absolutely. worried? probably not necessary.
This and the influx of DGS at the hangar (plus the lack of 5th week of vacation) could very well drive TechOps to a union.

how about you help me out with a document from YOUR CURRENT EMPLOYER's WEBSITE that shows the loss of a key MRO customer and the resulting difficulty for DL in meeting its MRO goals. I'm not sure which customer that might be....which is why I am asking.
NA,WO and Ryan International.
The idea from the OP was that the TOC seems ripe for further shrinkage based on the opening of the Mexico facility. I don't see it, esp. since a qualifying phrase was left off the end of the original sentence.
Because your completely blind dude. You really think this will be good for the airframe side of TechOps? At best it likely means the MRO work goes to Mexico. At worst it could mean the basic end of any heavy work done by Delta. Why don't you ask some fo the guys that moved from the hangar floor not to long ago just how happy about it they are. Other than the stupid "it will save Delta money" crap.....you can't tell me how this is good for the guys in the hangar.
Perhaps there is more evidence that is there that I am not seeing.... I am asking you and Glenn among others because you have insight. I simply would like to see that insight.
because you don't want to see it. A 7 bay hangar in Mexico and you need them to spell it out for you? really?
Just because Tech Ops CASM has increased doesn't mean that outsourcing is the answer. no but that seems to be the go to thing Based on the rest of DL's business plan, they are reducing CASM by INSOURCING work that was outsourced,I'm sorry....but huh? like what? which seems to me to be exactly what needs to be done in light of a shrinking industry- and DL's need to reduce capacity to keep matching capacity to the fares that support DL's costs. As Europe's future is as tenuous as ever, that seems all the more necessary.

One other note on Europe, E.
DL has shifted European capacity from ATL to JFK and that is likely to continue w/ the opening of the new JFK terminal. As Europe continues to struggle - and it will under just about any scenario for several years - the chances that DL's int'l operation at ATL will be smaller than today are fairly high.

Question for you WT. If things go bad, this little group has a customer or two drop out what do you think Delta will do? Let those brand spanking new bays in Mexico sit empty or find Delta work for them to do? They WILL have a lower cost than TechOps. It may not start off bad, but if that thing isn't a 10+ bay complex with Delta HMVs/PSVs done there and TOC being a few bays over at the ford plant in 15 years I'll give you 5 bucks......of course....I'll be unemployed so i hope you will take IOUs.

 

[Kev3188]

The simple fact is that DL is far less of a problem than other airlines...

No one said it was the exclusive domain of DL; this thread just happens to be discussing them. A lesser problem =/= no problem.

This and the influx of DGS at the hangar (plus the lack of 5th week of vacation) could very well drive TechOps to a union.

It wouldn't surprise me. BTW, is the loss of 13's as big of deal down there as people are making it sound? Might be another straw on the camel's back...

 

[WorldTraveler]

good to see you back, Dawg. And thanks, Kev, for sticking with the conversation.

The three of us - and others - have discussed many of these same things many times before. The definition of insanity is to continue to argue the same points expecting to move someone to the point of view which they have resisted multiple times before.

So, let me ask you a couple questions...

Why didn't DL shut down the TOC or cut it to the bones, as you describe they could do, during BK. They dumped alot of maintenance capacity in peripheral cities. Why did they choose to concentrate maintenance in ATL instead of just gutting the whole thing. Others cut far deeper in BK. NW said it was worth outsourcing virtually the whole operation? Why?

Why doesn't AM - and a whole lot of other airlines and MROs - do half the stuff DL Tech Ops does. Why did DL choose to keep those functions while others ditched them? Why does DL send out work on some engines but keep others in-house - and then use that capability to insource?

Why haven't DL employees - esp. in Tech Ops - chosen to unionize before? They haven't for, what, 80 years? Why is today different? Same answer largely fits for DL's other non-union employee groups.

The answers to every one of these questions are the same cold, non-emotional reasons that I mentioned above. It has nothing to do with whether you two do your jobs very well (I know you do), whether you are outstanding people (you are), whether I would personally would love to sit down for a beer and burrito with you - I would.

I await your responses.

 

[Kev3188]

So, let me ask you a couple questions...

Why didn't DL shut down the TOC or cut it to the bones, as you describe they could do, during BK. They dumped alot of maintenance capacity in peripheral cities. Why did they choose to concentrate maintenance in ATL instead of just gutting the whole thing. Others cut far deeper in BK. NW said it was worth outsourcing virtually the whole operation? Why?

Can't speak for the DL side, since I wasn't there. IMO, NW regarded AMFA as a threat that had to be extinguished. I'd also note that Anderson commented several times that we (NW) "weren't in the maitenance business." (paraphrasing) I wonder what changed his mind? Same with several other key players in that dismantling that are now in ATL.

Why haven't DL employees - esp. in Tech Ops - chosen to unionize before? They haven't for, what, 80 years? Why is today different? Same answer largely fits for DL's other non-union employee groups.

Because DL isn't the company it once was in regard to how it treats employees. They've gotten a lot of mileage out of the "history" and "family" code words, but I'm not sure how much longer they can continue to do so.

Specifically with regards to the merger, NW mechanics were working under an imposed term sheet. DL mechanics were not. As I've noted before, the difference was huge, and no AMT in their right mind would've agreed to work under the former while waiting out the Section 6 process. Now that everyone is aligned, it's a different story.

BTW, with regards to moving the TOC, it's at least been discussed.

http://www.ajc.com/news/business/airport-projects-abound/nQTbc/

From the link:
"The airport’s biggest tenant, Delta Air Lines, also is looking ahead. CEO Richard Anderson said last week the airport could also expand by adding Concourses G and H, with Delta moving its hangars in that area to former Ford plant land the airport acquired last year."

 

[737823]

At this point its only a couple of bays, and Delta does x amount of work in house, but that can easily change. IMHO, its a disgrace for ANY American based company to be associated with a facility in Mexico, or anywhere else outside of the US. I know a lot of companies do it, and I try to avoid thier products, GM included especially after their government baiil out. Within a few years, Delta could decide to triple the size of this Mexican facility, and nobody can do squat to stop them.

How's that working out for you? Last I checked US is the largest Airbus operator worldwide, and operates fewer US built Boeing aircraft than your network peers (AA, DL, and UA). The fact is we live in a global economy and corporations would be foolish not to tap into these opportunities, they have a fiduciary duty to their stakeholders to do so. Calling many air carriers yields reservationiste off shore, many good you and I purchase are assembled abroad or contain significant part contents from abroad too. I drive German and Japanese automobiles, never purchased or leased an American make.

It's a two way street foreign companies are beginning to show an interest in US manufacturing once again in right to work states. Airbus is building their facility in Alabama which will be more cost competitive than their France operations, Caterpillar (a US company) shuttered a plant in London, Ontario, Canada to relocate to Georgia. United Technologies (Otis elevator manufacturer) has similarly moved work back to the US from Mexico.

Josh