Gil West promoted to EVP and COO

[WorldTraveler]

thanks... I was quite certain the number was there and was glad you brought it forward.

WN's $228M divided by 44,831 active full-time employees doesn't come close to the amount of profit sharing that DL active employees DL gained.

DL employees earned $506M in profit sharing. DL doesn't report how many mainline only employees it has on its SEC filings (it will come out in other DOT filings) but DL reported almost 78K consolidated employees. If you can tell us the number of employees DL has in its subs, we can calculate it, but it is very easily 5K employees.

It doesn't matter what is in WN's contracts. DL employees on average are getting a profit sharing check that is on average close to 20% or almost $2000 larger.

What WN paid in the past doesn't matter today.

I don't have the statistics in front of me, but DL employee profit sharing was higher than WN's on a per capita basis last year - not hard to see given that you note they almost doubled it over the last year while DL's only went up about 40%.

I didn't say that WN employees would be leaving DL. just disputing the notion that WN employees are gaining what the company saves in increased outsourcing.

 

[Glenn Quagmire]

What WN paid in the past doesn't matter today.
 

 
Excuse me? I am not sure how you calculate wages and in-the-pocket pay, but if a company pays $10 per hour more for years, that absolutely makes a difference. Doing the math on the LUV profit sharing, it would appear that if the profit sharing were shared equally across all employees, they would get very close to $5,000 per employee. The link above doesn't indicate how it is calculated, so I will have to use that. I suspect that it is a percentage share, as most companies use a similar formula. 
 
 
This is what I was able to find from an earlier (2009) statement:
 

The Company has defined contribution plans covering substantially all its Employees. The Southwest Airlines Co. Profit Sharing Plan (Profit Sharing Plan) is a defined contribution plan to which the Company contributes 15 percent of its eligible pre-tax profits, as defined, on an annual basis. No Employee contributions to the Profit Sharing Plan are allowed.
 

 
According to the link above, they have been getting profit sharing since they were hired, or 1973, whatever came first, since they have yet to have a year where they did not have a profit. That means non-linear wealth growth for the average LUV worker if they invested in conservative to modest vehicles.
 
I don't know how you can "say" with a straight face that "What WN paid in the past doesn't matter today". Face it, Delta is new to the profit sharing game and they have a long way to go to wage parity with the top 3 in paying A&P Mechanics. If it were not for the TWU and the IAM dismal negotiating failure, mechanics wages would be considerably higher, even at non-union Delta. 
 
As I said earlier, and you ignored, look for Gil West to act on that vendor management experience under his belt. 

 

[WorldTraveler]

I'm not arguing nor have I denied that WN mechanics have higher wages. I am arguing against your point that WN has shared its outsourcing savings with its employees. WN outsources 50% more of its total maintenance dollars than DL and WN mechanics don't proportionately make that much more in salary.

The profit sharing side issue is yet one more issue to show that WN employees are not at the front any more. Yes, they have had profit sharing for a longer period of time that has paid out but they are not pulling down as much as DL employees for at least 2 years. DL employees are getting more pay raises as well.

The notion that WN employees are at the top of the industry and no one else can catch up is not supported by reality.

There is not an analyst in Wall Street that has stated that DL cannot continue to generate profits. DL's profit sharing is not a flash in the pants experience. DL has fundamentally changed the way the business is run and has distinguished itself from its network peers which will continue to allow DL to grow its profits far faster than its peers.

You can argue that Gil West will use his experience to increase outsourcing but the reality is that nearly all of DL's peers are increasing outsourcing of ground personnel at a far faster rate than DL. There is no N. American airline (or anywhere in the western hemisphere for that matter) that insources as much maintenance as DL does. Unless you want to argue that DL is going to start outsourcing FA jobs or other areas that are now under his control(I presume In-Flight is now under his control), then there is no basis that you have presented or taht I can see that he is more of a threat based on what he did in the past, which I'm not denying existed.

Just because an exec used a strategy years ago doesn't mean they will use the same now. I have said the same thing about Parker and it is true here. When they actually repeat, then you can make the charge. Given that the industry has changed, the strategies may very well change as well.

 

[WorldTraveler]

Here is the earnings release for DL to match the one from WN.

There are several ways that the amount of profit sharing can be calculated relative to other expenses and in case DL spent a higher percentage on profit sharing than WN.

DL exceeded WN in the percent of total expenses that goes to profit sharing, profit sharing expenses as a percent of salaries and benefits, and amount of profit sharing per stated FTE. The last statistic is notable since DL doesn't publish a FTE number solely for mainline and yet even using the number of consolidated FTEs, DL profit sharing is higher even though only DL employees get DL profit sharing.

And we are still talking about just DL vs WN which is where the majority of the profit sharing in the US industry is happening. Tim Nelson noted that a number of DL's legacy peers have little to no profit sharing.

What Gil West is NOT going to do because the powers that be above him won't let him is mess with profit sharing which has been and continues to be a powerful motivator for DL people, just as it has been for WN. Not surprisingly, the IAM and others try to pretend that profit sharing isn't a major part of DL employee compensation.

DL employees know better. Much better.

 

[Kev3188]

Not surprisingly, the IAM and others try to pretend that profit sharing isn't a major part of DL employee compensation.

Can you show us where that has been officially stated? I've yet to see anything like that.

 

[WorldTraveler]

they never include it any total compensation and if they do it is usually not current - but neither are their other calculations either.

Further, they and you want to discredit profit sharing for DL employees as transitory and at mgmt whim yet label WN's profit sharing as rock solid and dependable, even though the level of profit sharing at DL has surpassed WN's on a per capita basis at least the last two years.

DL has transformed its business and is moving much more in the direction of DL's historical prederegulation model which WN also shares which was based on above industry average profitability and stronger financial metrics than its peers. DL's employees will benefit on a long-term basis.

 

[Kev3188]

that's nice, but not what was asked. Some specific examples might help. Also, can you show us where/how WN's PS plan is being discussed in the IAM campaign at DL? Thx in advance.

 

[WorldTraveler]

since you're retort will be "it's always someone else" I will just let you and anyone else read the thread and determine the appropriateness of the response.

If you're interested in having a discussion, we can do that.

Doesn't change that DL employee profit sharing has exceeded that of WN employees' on average for the last two years, that DL outsources a lower percentage of maintenance, and that WN hasn't used even close to what it has saved from its increased maintenance outsourcing with its mechanics.

Again, I am waiting to see some evidence that Gil West is going to use his experience in managing vendors to increase DL's outsourcing. Maybe he will. I don't have any evidence to say he won't but there is also no evidence to say he will.

You're welcome.

 

[Kev3188]

Translation: "I got nothin'..."

Carry on.

 

[WorldTraveler]

and if you do it shouldn't be hard for you to convince your coworkers of the threat that is about to hit them.

now THIS is what gets people fired up.

http://blogs.marketwatch.com/themargin/2014/02/10/outcry-erupts-after-danish-zoo-kills-healthy-giraffe-feeds-it-to-lions/

 

[Kev3188]

WTF is wrong with you? 
 
Seriously, get help.

 

[WorldTraveler]

You're the one blowing a fuse.... I'm cool as a cucumber.

Meanwhile, the evidence that Mr. West is going to be the undoing of DL employees can be found where?

 

[Kev3188]

Beng "cool as a cucumber" after linking to something so disgusting? That says all I need to know about your character.
 
Carry on.

 

[700UW]

He doesnt have any character, I wonder what he says to the peasants in Brazil?

 

[Force Majeure]

He doesnt have any character, I wonder what he says to the peasants in Brazil?

I would guess something like "Have you finished cleaning the yard?", or "is my dinner ready yet"?