RUMORS AND PROMISES

FINANCIAL GIDDINESS VANISHES
BASTIAN TO CUT COSTS


Is it just a dream, or does it seem that everything went to hell economically for us overnight? Only 3 short weeks ago, Ed Bastian our President and CFO, was apoplectic and almost giddy about Delta’s future prospects. Today he is busy sounding the warning bells. What gives? How could our situation change so drastically in such a short time?

Everybody knows that fuel is up, but Ed and Richard should have realized that fact when they were traveling the system a few short weeks ago. All the economic trends were pointing downward, but yet we were hearing nothing but great news. As a matter of fact, Mr. Bastian boldly predicted that our yearly profit would hover around a Billion dollars (when he was estimating what our ‘profit sharing’ might come to), with a projected 4th quarter operating profit of around $400 million.

Now we are hearing that the 4th quarter operating profit will be “flat or a minus 2%.” What’s really confusing is that Ed Bastian was recently named the CFO of the year. A Coca-Cola executive awarded him the honor saying “our honoree has demonstrated visible leadership and delivered sustainable results this past year.” You’ve got to wonder whether or not the award was a local honor or national honor. At any rate, one wouldn’t call missing a 4th quarter prognostication by $400 million a “sustainable result.” Perhaps they will ask for the award back.

Don’t worry; Ed has a plan to make up the $400 million shortfall. The Combined News Services is reporting Ed as saying “cost cuts will be key to helping Delta deal with higher fuel prices.” He also suggested that there could be “job cuts.” YA THINK? Wow, want to bet none of us saw that coming?

To make matters worse, rumors are swirling all around us. Everyone has heard them, and you can’t think that adding to the fever by repeating them enhances the dialogue. However, haven’t you ever wondered about the origins of Delta rumors? Where do they come from and why do they have a nasty habit of coming true? A cynical person might begin to think that Delta management starts their own rumors to see how they float, and if no real opposition arises, they incorporate them.

We all hope no more cities will be contracted out. It would be a mistake of monumental proportions. One only has to look at the disaster that Seattle has become since our ground operations went away. Millions of dollars of loss has occurred in aircraft damages alone, not to mention the fall off in customer service. Short-term monetary gain is no justification for contracting out cities. The move always results in long-term damage both financially and in reputation and professional services.

Why is it that rumors have a habit of coming true but promises and commitments made by Delta to us hardly ever make it to our billfolds? Does industry standard pay seem like a distant dream that will never really happen unless we make it happen? Commitments, policies and promises are not always honored but contracts have to be.

Every airline is feeling the pinch of higher fuel costs and tightening economic realities. The difference for them is that because of their union contracts, they know what their profit sharing is based on. They know what they will be paid today, tomorrow and next year. They have an understanding of what their combined benefits will be…do you?

We are again at the mercy of people we hardly know and who haven’t worked at Delta for very long. They have all recently cashed in millions of dollars in equity with their restricted stock. They have millions more waiting for them in stock options — with more restricted stock and performance based stock rewards. All us poor working folks have are promises and commitments that carry no real value. Try getting a loan based on Delta’s promises.

We can win this IAM campaign. We must win this campaign. With your help and the expertise the IAM brings, we will prevail. Contact us at: iamaw.org to get involved.