Wednesday, March 21, 2001
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Wednesday, March 21, 2001 |
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Figuring out who killed the 'Delta family' By DAVE HAMRICK I'm no expert on Delta Air Lines, but I know more about the company than the average person knows about the average big company. As a reporter covering news at and around Hartsfield International Airport for a couple of decades, I've had occasion to talk to and be around some of the company's bigwigs in the past, and I've spent some time around the rank and file covering press conferences, new airplane roll-outs and other events. I've also had a number of friends who worked there. The story of Delta has always been fascinating. Naturally, a reporter is skeptical about the hype. When the news releases talked about the "Delta family" and trumpeted the high morale and great relationship between workers and management, one tended to nod and think, "Yeah, sure." But when all the airlines were facing tough economic times and the inevitable strike rumors several years ago, the workers at Delta made a believer out of me ... they went out and bought the company an airplane, just to show their solidarity. It was a magnificent gesture. No, getting one new airplane didn't lift Delta out of the economic doldrums, but the psychological effect on management, workers and stockholders had to be tremendous. Delta workers were proud of the fact that their company kept their pay and benefits near the top of the industry without the need for unions, contract negotiations, strike threats and all that. In my conversations with pilots recently, I can't help but notice that things have changed. When some of the old-timers say that their current strike threat is "not about the money," I truly believe them. There's a bitterness there that can't be attributed solely to the heat of negotiations. What happened to the Delta family? Your guess is as good as mine. If you talk to the pilots' union, they'll tell you that the old leaders went out and the new leaders came in with a completely different attitude. They started playing hard ball and that old family feeling went away. Talk to some of the managers, I'm guessing, and you'll be told that it's the growing union influence that's to blame. Here we are facing uncertain economic times and yet the pilots' union is about to strike, even though the company's contract offer would continue the tradition of keeping the pilots at the top of the heap. From what I've seen and heard, the folks on the ramps and in the ticket lines aren't feeling very familial toward either group. They were already mad at the pilots, and if there was any of that old family feeling left, it may have departed when the company announced a 6.6 percent raise for its CEO, Leo Mullin, and five days later workers got a lengthy memo from CFO Michelle Burns calling for belt-tightening to get through the economic slowdown. Mullin's raise, which bumped him up to $795,000 a year (plus all kinds of stock options and other benefits), was based on "job performance" and the salaries of his peers. And the rank and file have got to be wondering how a 57 percent drop in revenue over the last six months qualifies as "job performance" worthy of such a big raise. As I've written about this threatened pilot strike, I've been quick to dispel any idea that I'm jealous of what they make, and I'll make that same point in Mullin's case. If you can convince the board you're worth it, God bless you. I'm happy for you. Maybe he's worth it. Maybe company profits would have been down 80 percent instead of just 57 if somebody else had been in charge. But if he's such a hot shot manager, how come he couldn't figure out that the timing of this announcement is on a par with a guy who asks his wife for nookie right after making a crack about her weight? And think what a boost it would have been to morale if he had announced instead that he was going to delay his raise as long as the company faced tough times. Then, "We're in this together" wouldn't have such a hollow ring. Whatever happened to the Delta family mystique, it seems to be gone. Now the pilots and management are playing hard ball, and that's just the way it's going to be. But what the pilots have to decide is how hard it's wise to push, and when it's wise to stop. Revenues are down $300 million to $350 million for the March quarter. How much is attributable to the economic slowdown and how much to the fact that customers are avoiding Delta for fear of the strike, no one knows. Can the company withstand a strike? Probably. The question is whether it will ever fully recover. And what's the future of those fat paychecks if it doesn't?
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