Labor unions unhappy with Delta dealby Tim Nelson, Minnesota Public Radio
Airline executives today sketched out terms of Delta's acquisition of Northwest Airlines. But the course the merger takes is also in the hands of the people who fly the planes, carry the luggage and pour the coffee.
St. Paul, Minn. — By the end of this year, nearly 90,000 people will be working for the combined airlines, thousands of them in Minnesota.
How many thousands, though, is the key question for Northwest employees. Right now, the company has about 34,000 workers, and about one-third of them work in Minnesota.
Airline officials said today they expect no reductions in "front line" employees. But Delta vice president Mike Campbell said at a New York news conference that there will be cuts elsewhere.
"On the administrative and management employees, where there may be some overlap, we are going to have some voluntary programs and attempt in every way we can to avoid involuntary [layoffs]," Campbell said. "But at the end of the day, there may be some involuntary [cuts] on the management and administrative [sides]."
The two companies will also have very different relationships to their remaining workers.
Fewer than one in five Delta employees are unionized, all of them pilots, while at Northwest, about three-fourths of the employees belong to a handful of unions.
Representatives for the flight attendants and ground workers unions have expressed their opposition to a merger. Combining with a larger airline could threaten their union status. Delta flight attendants have a union vote scheduled to start next week.
Northwest ground workers are worried about their retirement benefits, which include one of the last pensions in the industry.
The airlines are trying to sweeten the deal, though.
Delta executives said that non-pilot employees in the U.S. would get a 4 percent equity stake in the new airline. Delta pilots have already bargained for a 3.5 percent stake in the new airline, as well as a 3.5 percent wage increase after the merger.
Northwest pilots are a different matter. They have long been aware of the looming acquisition and had preliminary, but unsuccessful, negotiations aimed at smoothing the landing for a potential merger.
Gary Chaison, a labor studies professor at Clarkson College, says the Northwest pilots are the key sticking point in the deal.
"The difficulty of merging airlines is not necessarily combining routes or gates, but it's in combining the seniority lists of their employees," Chaison said. "Seniority to a pilot is extremely important, because it determines what they fly, and when they fly and where they fly. When they combine these lists, some pilots will feel like they're getting the bad end of the deal."
"It's going to be a very contentious issue here, and they haven't resolved these problems," Chaison continued. "But they're hoping that the pressure of the merger, and the significance of the wage increases promised to the workers, will be enough to encourage them to resolve any problems."
Northwest pilots already say privately that their Delta colleagues gave in too quickly and should have bargained harder.
In public, they've actually been even harsher. They say Delta's management is trying to take advantage of them.
"No pilot group is going to put up with this," wrote union chairman Dave Stevens in an e-mail to members. "No amount of money can sustain a carrier which creates this level of discord."
Stevens said at an afternoon news conference the airlines are trying to play the pilots off against each other.
He pointed out that his union is the only bargaining unit that hasn't been promised a stake in the new carrier.
"We're in a high-risk scenario right now. No one has seen fuel over $100. There isn't any more money to tap," said Stevens. "I find it very difficult to understand why you don't get the contract -- take the risk out of it, and get the contract and the seniority done in advance."
Northwest President Doug Steenland, though, made it clear in a call to Wall Street analysts that the acquisition is going forward -- with or without the pilots' approval.
"ALPA has a very specific merger policy, that the collective bargaining agreement of both airlines obligates both the airlines and the pilot groups to follow," Steenland said. "And if the two pilot groups cannot -- on a voluntary basis -- get there, there is a very clear roadmap and a very clear precedent as to how this arbitration process would work to integrate the seniority lists."
Airline executives said they still hoped to reach an agreement with the pilots for a single contract and combined seniority lists by the time the deal closes in the next six to nine months.
- All Things Considered, 04/15/2008, 5:24 p.m.