PROFIT SHARING REVISITED

FACTS CONCERNING PROFIT SHARING IN DISPUTE
BASTIAN CLARIFICATION DEEPENS CONFUSION



Ed Bastian has been on a near three week trip traveling the system explaining the good news on Delta’s horizon. We all appreciate his up-beat assessment of our future, and the strength that he sees growing within us, both financially and to some extent operationally.

However, there seems to be some confusion about the subject of profit sharing. Many of us have been curious about what sort of formula was used to determine how profit sharing was calculated. Delta’s recently released formula lacks clarity and precision. Here it is: (Delta’s annual pre-tax profit up to 1.5 billion x .15) x (your earnings/overall earnings) = your payout….and, if Delta’s annual pre-tax profit is more than 1.5 billion, 20% of the amount over 1.5 billion.

I’m just a simple country boy but doesn’t there seem to be a missing mathematical step in that process? There is no number that can be derived from that equation. Don’t worry though; Ed says that the number will be roughly 5% of your gross 2007 annual earnings. Take his word for it. Trust him. No need to call in a math professor.

We recently reported our 3rd quarter profit statement and Mr. Bastian proudly proclaimed that 160 million dollars had been set aside so far this year for profit sharing disbursements. There are roughly 48,000 employees at Delta; over 6,000 of them are pilots. Try on this mathematical equation. The 42,000 non-pilot's salary averages, if you include all strata, roughly $50,000. Since the year is 3/4 complete, that average is $37,500. Ed’s 5%, your ‘profit sharing’, is $1,875. Now, multiply that by the 42,000 non-pilot employees and the amount comes to almost $79 million dollars.

Simple math tells us that $81 million dollars in profit sharing is going to the pilots and somebody else, besides us. The pilot’s group (and somebody else) gets half and we get the other half. 6,600 get 81 million and 42,000 split up 79 million. The pilots (and Officers of the Company) have a contract and we don’t. They have representation, we don’t — and the numbers show it.

When Ed Bastian talked to our employee group, he was adamant that the previous blog article concerning the disbursement was inaccurate. We stand by the figures.

Because the pilots have a contract, they are guaranteed 15% of all pre-tax income up to $1.5 billion and 20% above $1.5 billion. Our guarantee? Well, we’ll just have to trust Ed. When we are told that we are all in this together and the money is co-mingled, don’t buy it for a minute. We have no guarantee, no way to verify, no way to challenge and no way to get what we truly deserve. We are being given a set bonus that has nothing to do with the amount of the profit. It is ‘shut-up’ money. They are hoping it will quiet down the union activity company wide. They are mistaken.

Do not be upset with the pilots. They are doing what we should. It pays to organize and negotiate for a better deal. Heartfelt seminars and glowing predictions about the bounties we are about to receive are nothing more than pie in the sky. We need to challenge the rhetoric and stand up like men and women who want to participate in our successful financial future. We need to unionize.