Delta to Cut Up to 7,000 Jobs in 18 Months

loveyfly · 09-08-2004, 09:21 AM

http://biz.yahoo.com/ap/040908/delta_job_cuts_9.html

Delta Air Lines Announces It Will Cut Up to 7,000 Jobs in 18 Months and Reduce Wages

ATLANTA (AP) -- Delta Air Lines will cut up to 7,000 jobs, reduce wages and pull back at its Dallas-Fort Worth airport hub as part of a sweeping restructuring plan that could still leave it vulnerable to bankruptcy, company CEO Gerald Grinstein said Wednesday.
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The job cuts representing about 10 percent of its overall work force will come over the next 18 months, Grinstein said during a meeting with 300 of the company's middle managers.

There will be a 15 percent reduction in administrative overhead costs, including management cuts. A reduction in wages will announced by the end of the month, and employees will be expected to pay larger contributions for health insurance.

Grinstein did not specify which jobs would be cut, but did say some management posts would be included.

In addition, Grinstein said Delta will no longer use the Dallas-Fort Worth airport as one of its four hubs. Instead, Delta will expand its hubs in Cincinnati, Atlanta and Salt Lake City with redeployed aircraft from Dallas-Fort Worth.

Despite all of these measures, Grinstein said "bankruptcy is a real possibly."

"We're working hard and fast to avoid it," Grinstein said.

Atlanta-based Delta Air Lines Inc., the nation's third-largest carrier, has been warning investors for months that it may have to file bankruptcy if it didn't get deep wage cuts from its pilots. Management said on July 30 it needed a minimum of $1 billion in concessions from pilots to survive. Pilots had previously offered up to $705 million, then accused the company of acting in bad faith when it asked for much more.

Delta has lost more than $5 billion and reduced its work force by 16,000 in the last three years. The changes announced Wednesday are part of Delta's goal to save more than $5 billion by 2006.

"Given the severity of our financial situation, there are no guarantees for success and there is no time to waste," Grinstein said during the meeting. He said he still has hope for the airline's future.

As of June 30, Delta and its subsidiaries had 70,300 full-time employees and 842 total aircraft, regulatory filings show. Delta also has several regional carriers, including Atlantic Southeast Airlines and Comair, and a low-fare carrier, Song.

Besides the Dallas-Fort Worth hub targeted in the cuts, Delta has hubs in Atlanta, Cincinnati and Salt Lake City. Delta also is a major U.S. carrier to Europe.

"In the past, we are used to living from cycle to cycle," Grinstein said. "What we're now seeing is something that is so fundamentally different, there is no comparison to the past. What we are doing is building a new airline for the new era."

Last week, rival American Airlines and its regional affiliate said they would add 70 flights from Dallas-Fort Worth airport by summer 2005. American, the largest U.S. carrier and a unit of AMR Corp., said it would increase frequency of flights from DFW to 31 other airports in the United States and Mexico.

"This is our home and Dallas-Fort Worth Airport is a key to the long-term success of our company in an extremely difficult industry environment," said Gerard J. Arpey, chairman and chief executive of both American and parent AMR.

http://www.delta.com

Kristie · 09-08-2004, 02:40 PM

well, I knew the DFW hub would close.. DH was told that long ago which was why he switched over to ATL...

it's too bad that so many jobs will be lost but some of those management jobs really weren't needed, so we'll have to see what happens in the future. Hopefully, they can get the money they need in reducing the costs that can be reduced (without layoffs first)...

but i'm surprised that there was no mention of "well, the DL pilots won't give in to our super outrageous concession demands, so this is what we have to do to compensate".... i was waiting to see some type of mumbo jumbo like that!

that REALLY Suxs for the DFW folks, that's going to be a lot of lost jobs.. I wonder if they'll offer to have them work at one of the other bases or what not? I wonder if American would be willing to hire those folks on then or what?

Any word on when the actual hub will close? I've heard Jan 31st 2005 is the final date???? I wonder if they'll keep the regional guys there though to ferry in between hubs?

roz · 09-08-2004, 09:19 PM

Actually, if you listen to the webcast, he began with an demand about the pilot pension plan and threatened bankruptcy unless that was settled by the end of the month. I believe he wants to end the no notice option of retiring to change it to 120 days.

Also today, ALPA endorsed changes to pension plans recognizing that the traditional defined benefit plan is a dinosaur in the airline industry as well as most industries.

Since only the pilots are unionized they don't have to offer anyone else anything. If they do, it's strictly voluntary with no moving costs associated.

It's a shame. It is, unfortunately, commonplace in this industry. Bases change and close all the time.

lucky81698 · 09-10-2004, 09:14 PM

Not that it really matters in the big scheme of things, but technically Delta has 2 unions. The dispatchers are also unionized.

It is a shame that so many people will lose their jobs and other like Denise and her family will be displaced.

Kristie · 09-11-2004, 01:15 AM

I haven't had time to try and find it, but where would I find a link to the webcast? I haven't heard it and would like to hear myself just how that statement comes across....

Anonymous · 09-11-2004, 06:47 AM

It's on the delta website under investor relations/webcasts. 17 minutes into it, he prefaces his launch into the new initiatives with the comment that unless the pilot's retirement plan is resolved by month end, bandruptcy is the only option.

roz · 09-11-2004, 09:02 AM

Oops that was me. Somehow I got logged out!

roz · 09-20-2004, 08:32 PM

GG threatened bankruptcy if the pilots didn't give relief on the retirements. Here's the latest. But will he file anyway?

http://www.forbes.com/facesinthenews...&referrer=

http://biz.yahoo.com/ap/040920/delta_5.html

Kristie · 09-21-2004, 02:53 AM

yup, i've heard that too... I wonder if he will.. if he does, it could mean the end of his bonus plan as well....

lots going on - talks about pilot retirements as well.. seems that if the pilot union doesn't give in to the pilot retirement agreement, GG will also use that to take DL into bankrupcy.. how far can this guy go to pit everyone against everyone?! sheesh...

roz · 09-21-2004, 11:47 PM

Yes Kristie--it will now go to the rank and file to vote--But those who are junior and furloughed are really ticked off at this! But those who are furloughed have no vote! Delta is setting a precedent and I hope that everyone recognizes it for what it is!

It's just the posturing that makes me wonder whether GG is intending to file Chapter 11 anyway. After all, there are a lot of other vendors that fall victim if that happens.

If the only way to compete is to file Chapter 11 so you don't have to pay your bills, then management should be drawn and quartered! Delta management had an advantage over the competition post 9/11. They squandered that, coupled with no diaglogue with Unions. They should all be fired wth the standared severance packages!

I fly lots on company business. I am not impressed with any of the "majors" any longer. The LCC's offer a comparable and, unfortunately, often better experience (but not AirTran--in my experience--I'm not ever flying them again). I wish the majors could figure it out--they don't seem capable!

09-08-2004, 09:21 AM	#1 (permalink)
loveyfly Member Join Date: Sep 2004 Location: St. Louis, MO Posts: 14 Recipes: Thanks: 0 Thanked 0 Times in 0 Posts	Delta to Cut Up to 7,000 Jobs in 18 Months http://biz.yahoo.com/ap/040908/delta_job_cuts_9.html Delta Air Lines Announces It Will Cut Up to 7,000 Jobs in 18 Months and Reduce Wages ATLANTA (AP) -- Delta Air Lines will cut up to 7,000 jobs, reduce wages and pull back at its Dallas-Fort Worth airport hub as part of a sweeping restructuring plan that could still leave it vulnerable to bankruptcy, company CEO Gerald Grinstein said Wednesday. ADVERTISEMENT The job cuts representing about 10 percent of its overall work force will come over the next 18 months, Grinstein said during a meeting with 300 of the company's middle managers. There will be a 15 percent reduction in administrative overhead costs, including management cuts. A reduction in wages will announced by the end of the month, and employees will be expected to pay larger contributions for health insurance. Grinstein did not specify which jobs would be cut, but did say some management posts would be included. In addition, Grinstein said Delta will no longer use the Dallas-Fort Worth airport as one of its four hubs. Instead, Delta will expand its hubs in Cincinnati, Atlanta and Salt Lake City with redeployed aircraft from Dallas-Fort Worth. Despite all of these measures, Grinstein said "bankruptcy is a real possibly." "We're working hard and fast to avoid it," Grinstein said. Atlanta-based Delta Air Lines Inc., the nation's third-largest carrier, has been warning investors for months that it may have to file bankruptcy if it didn't get deep wage cuts from its pilots. Management said on July 30 it needed a minimum of $1 billion in concessions from pilots to survive. Pilots had previously offered up to $705 million, then accused the company of acting in bad faith when it asked for much more. Delta has lost more than $5 billion and reduced its work force by 16,000 in the last three years. The changes announced Wednesday are part of Delta's goal to save more than $5 billion by 2006. "Given the severity of our financial situation, there are no guarantees for success and there is no time to waste," Grinstein said during the meeting. He said he still has hope for the airline's future. As of June 30, Delta and its subsidiaries had 70,300 full-time employees and 842 total aircraft, regulatory filings show. Delta also has several regional carriers, including Atlantic Southeast Airlines and Comair, and a low-fare carrier, Song. Besides the Dallas-Fort Worth hub targeted in the cuts, Delta has hubs in Atlanta, Cincinnati and Salt Lake City. Delta also is a major U.S. carrier to Europe. "In the past, we are used to living from cycle to cycle," Grinstein said. "What we're now seeing is something that is so fundamentally different, there is no comparison to the past. What we are doing is building a new airline for the new era." Last week, rival American Airlines and its regional affiliate said they would add 70 flights from Dallas-Fort Worth airport by summer 2005. American, the largest U.S. carrier and a unit of AMR Corp., said it would increase frequency of flights from DFW to 31 other airports in the United States and Mexico. "This is our home and Dallas-Fort Worth Airport is a key to the long-term success of our company in an extremely difficult industry environment," said Gerard J. Arpey, chairman and chief executive of both American and parent AMR. http://www.delta.com

09-08-2004, 02:40 PM	#2 (permalink)
Kristie Admin/Owner Join Date: Jul 2003 Location: Scottsdale, Arizona Posts: 6,631 Recipes: Thanks: 7 Thanked 17 Times in 17 Posts	Re: Delta to Cut Up to 7,000 Jobs in 18 Months well, I knew the DFW hub would close.. DH was told that long ago which was why he switched over to ATL... it's too bad that so many jobs will be lost but some of those management jobs really weren't needed, so we'll have to see what happens in the future. Hopefully, they can get the money they need in reducing the costs that can be reduced (without layoffs first)... but i'm surprised that there was no mention of "well, the DL pilots won't give in to our super outrageous concession demands, so this is what we have to do to compensate".... i was waiting to see some type of mumbo jumbo like that! that REALLY Suxs for the DFW folks, that's going to be a lot of lost jobs.. I wonder if they'll offer to have them work at one of the other bases or what not? I wonder if American would be willing to hire those folks on then or what? Any word on when the actual hub will close? I've heard Jan 31st 2005 is the final date???? I wonder if they'll keep the regional guys there though to ferry in between hubs?

09-08-2004, 09:19 PM	#3 (permalink)
roz Jetgirls Ol' School Member Join Date: Oct 2003 Location: Philly Posts: 2,252 Recipes: Thanks: 0 Thanked 6 Times in 6 Posts	Re: Delta to Cut Up to 7,000 Jobs in 18 Months Actually, if you listen to the webcast, he began with an demand about the pilot pension plan and threatened bankruptcy unless that was settled by the end of the month. I believe he wants to end the no notice option of retiring to change it to 120 days. Also today, ALPA endorsed changes to pension plans recognizing that the traditional defined benefit plan is a dinosaur in the airline industry as well as most industries. Since only the pilots are unionized they don't have to offer anyone else anything. If they do, it's strictly voluntary with no moving costs associated. It's a shame. It is, unfortunately, commonplace in this industry. Bases change and close all the time.

09-10-2004, 09:14 PM	#4 (permalink)
lucky81698 Jetgirls Ol' School Member Join Date: Jan 2004 Location: 1 Posts: 868 Recipes: Thanks: 1 Thanked 2 Times in 2 Posts	Re: Delta to Cut Up to 7,000 Jobs in 18 Months Not that it really matters in the big scheme of things, but technically Delta has 2 unions. The dispatchers are also unionized. It is a shame that so many people will lose their jobs and other like Denise and her family will be displaced.

09-11-2004, 01:15 AM	#5 (permalink)
Kristie Admin/Owner Join Date: Jul 2003 Location: Scottsdale, Arizona Posts: 6,631 Recipes: Thanks: 7 Thanked 17 Times in 17 Posts	Re: Delta to Cut Up to 7,000 Jobs in 18 Months I haven't had time to try and find it, but where would I find a link to the webcast? I haven't heard it and would like to hear myself just how that statement comes across....

09-11-2004, 06:47 AM	#6 (permalink)
Anonymous Jetgirls Member Join Date: Jul 2003 Posts: 230 Recipes: Thanks: 0 Thanked 0 Times in 0 Posts	Re: Delta to Cut Up to 7,000 Jobs in 18 Months It's on the delta website under investor relations/webcasts. 17 minutes into it, he prefaces his launch into the new initiatives with the comment that unless the pilot's retirement plan is resolved by month end, bandruptcy is the only option.

09-11-2004, 09:02 AM	#7 (permalink)
roz Jetgirls Ol' School Member Join Date: Oct 2003 Location: Philly Posts: 2,252 Recipes: Thanks: 0 Thanked 6 Times in 6 Posts	Re: Delta to Cut Up to 7,000 Jobs in 18 Months Oops that was me. Somehow I got logged out!

09-20-2004, 08:32 PM	#8 (permalink)
roz Jetgirls Ol' School Member Join Date: Oct 2003 Location: Philly Posts: 2,252 Recipes: Thanks: 0 Thanked 6 Times in 6 Posts	Re: Delta to Cut Up to 7,000 Jobs in 18 Months GG threatened bankruptcy if the pilots didn't give relief on the retirements. Here's the latest. But will he file anyway? http://www.forbes.com/facesinthenews...&referrer= http://biz.yahoo.com/ap/040920/delta_5.html

09-21-2004, 02:53 AM	#9 (permalink)
Kristie Admin/Owner Join Date: Jul 2003 Location: Scottsdale, Arizona Posts: 6,631 Recipes: Thanks: 7 Thanked 17 Times in 17 Posts	Re: Delta to Cut Up to 7,000 Jobs in 18 Months yup, i've heard that too... I wonder if he will.. if he does, it could mean the end of his bonus plan as well.... lots going on - talks about pilot retirements as well.. seems that if the pilot union doesn't give in to the pilot retirement agreement, GG will also use that to take DL into bankrupcy.. how far can this guy go to pit everyone against everyone?! sheesh...

09-21-2004, 11:47 PM	#10 (permalink)
roz Jetgirls Ol' School Member Join Date: Oct 2003 Location: Philly Posts: 2,252 Recipes: Thanks: 0 Thanked 6 Times in 6 Posts	Re: Delta to Cut Up to 7,000 Jobs in 18 Months Yes Kristie--it will now go to the rank and file to vote--But those who are junior and furloughed are really ticked off at this! But those who are furloughed have no vote! Delta is setting a precedent and I hope that everyone recognizes it for what it is! It's just the posturing that makes me wonder whether GG is intending to file Chapter 11 anyway. After all, there are a lot of other vendors that fall victim if that happens. If the only way to compete is to file Chapter 11 so you don't have to pay your bills, then management should be drawn and quartered! Delta management had an advantage over the competition post 9/11. They squandered that, coupled with no diaglogue with Unions. They should all be fired wth the standared severance packages! I fly lots on company business. I am not impressed with any of the "majors" any longer. The LCC's offer a comparable and, unfortunately, often better experience (but not AirTran--in my experience--I'm not ever flying them again). I wish the majors could figure it out--they don't seem capable!

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