Delta President Says Job Cuts Coming

[Airbubba]

Remember the good ole days when Delta never furloughed? Delta is probably in the best shape of the U.S. majors. Last time they offered the pilots a choice of a pay cut or a furlough. Guess what they chose?

_____________________________________________

Delta job cuts coming, president tells workers

4:41 p.m. 9.20.2001 - A top Delta Air Lines executive Thursday acknowledged that the company will cut jobs, with details to be announced early next week.

"I can only be completely honest with you," President and Chief Operating Officer Fred Reid said in a taped message to workers. "We have absolutely no alternative to the heartbreaking requirement of reducing employee costs and headcount to stabilize our company and permit it to have a reasonable future.

"We are in a life or death situation," Reid added, "and the actions we take for the next six months will have a dramatic impact on our future as a great airline."

Most big U.S. airlines have announced large job cuts to offset a sharp drop in demand since the Sept. 11 terrorist attacks involving American and United airliners. Delta, however, had only said that it might consider job cuts.

Reid said management teams are "looking for the least painful way," such as voluntary leave or retirement programs, but added: "I can tell you honestly voluntary programs will relieve some of the burden but will not eliminate the requirement...to reduce headcount in the very near future."

Reid said Delta expects to get a proportional share of the $5 billion in immediate cash aid that Congress is expected to authorize, perhaps as soon as this week.

That aid will prevent bankruptcies at weaker carriers and help stabilize the industry but "on top of that we will be required to make further reductions commensurate with the drop in demand," Reid said.

He said Delta's lack of heavy unionization has enabled executives to explore other measures, such as changes in work schedules and procedures, to cut costs. He said they will reveal details of the job-reduction plan "early next week, hopefully between Monday and Wednesday."

"I promise you we will be as compassionate as (the crisis) allows," Reid said.
- Nancy Fonti


http://www.accessatlanta.com/ajc/business/content/092001.html/#cuts

[The Guvnor]

I warned you guys months ago that this sort of thing would happen when DALPA was after its insane pay increases - which have been draining Delta's reserves of over $40m per month.

My prediction now is that not only will there be furloughs, but if this continues for more than six months, massive pay cuts as well. Hopefully, this will get salaries back down to realistic levels again, as this has been one of the biggest problems the airline industry has had.

It will be interesting to see how flexible DALPA is with the work practice flexibility that will be required. Increasing utilisation of crews will help the situation tremendously.

Why do you think that airlines only have 30 or so days worth of cash (at best)?

[TallPopularHamster]

Does a virtual airline only have 30 days of virtual cash I wonder?

[Carbon Life Form]

Guvnor, if only we had your wisdom, gained laboriously through hindsight, none of the airlines would be having any problems now.

Their problems have nothing to do with an insane act of war by individuals on the lunatic fringe of humanity.

[Flare_you_fool!]

Guvnor's new talent----Clairvoyant.

[Flare_you_fool!]

Maybe not clairvoyant, Guvnor predicted that Mr Goodwin would be gone by Monday 17th of september. Although, I suppose if we wait long enough the Guvnor's uncanny ability to predict the future will be proved correct again.
Spooky

[whatshouldiuse]

Guvnor;

I've seen you post numerous messages here and not responded. However, I feel necessitated to respond now.


Whether you grasp this or not, this is not an Union issue. This is about the American public getting shell-shocked. I don't know if you've ever seen 2 airliners crashing into buildings 20 minutes apart killing at this time 5800 people unless you watched it on the news. I live here and it is devestating.


I live in NY and have gone down to the disaster site. The enormity of this disaster is something you will never, ever see on T.V.


Yet you have the gall to blame the Unions for the layoffs. Try coming to NY for a day and ask people here, including myself, why we don't want to fly.

The simple fact is most flights, after the weeklong backlog is clearing up, are going out at 20% to 40% full. Please let me know how the Unions are to blame for this ??


I'm not a nasty person, but this is one time where you really do need to get a clue.


Andy Morrell

[Ontheairwaves]

i can agree somewhat with the Guvnor that the Delta pilots did somewhat diminish the company's funds by demanding such high pay salaries but don't agree that that was the single issue for the company now having to lay off people.
I myself have fell foul of leadership 7.5 in the past and know what it is like to be just a number.
In the week following the WTC the company was still operating even though everyone including management and pilots/PSA's/reservation agents were still being paid...so can't just dump on the pilots but a lower salary deal may have given just a few more coppers in the kitty for that RAINY day....
Delta is a good airline and used to be a family airline....now it is just a corportation :)

[The Guvnor]

My point, if you remember, was twofold: first this recession was well on its way when the pay increase was given; and secondly, it cost Delta $40 million a month - money that it (and every other airline) could well do with. OK, so $40 million is a couple of day's burn with nil income, but even with the reduced loadfactors it would be very helpful at present - even if only to pay the increased insurance premiums.

Any way you cut it, giving pay increases to anyone when you're going into a downturn is mad - this is why I have always been a strong advocate of profitshare at all levels of a company. If the company does well - then so does everyone working for it. If things are tight, then everyone tightens their belts.

Even before last week's horrendous events, loads were way down - and ironically the small number of passengers on board all the aircraft involved demonstrates this. Now, of course, the situation just got a whole lot worse.

Ontheairwaves - agree with you wholeheartedly. Remember when Delta employees bought the company a 767? Somehow I don't think that's likely to happen again anytime soon...