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How Delta Airlines De-Unionized 17,000 Employees...

Something I missed years ago that serves as an interesting lesson in union organizing, incentives, profit sharing and more follows...

When Delta merged with Northwest Airlines back in 2008, it set the stage for an epic battle. Northwest was heavily unionized, but at Delta, only the pilots and flight dispatchers belonged to labor organizations. A series of elections would determine whether Delta, which employs 75,000 people, would succumb to organized labor — or whether former Northwest employees would lose their representation.

Delta obviously wanted to maintain the union-free status of it's company.  More on the specifics from Fortune Magazine's 2014 Most Admired Companies feature: Delta-Employees

"Step one was accomplished by forging the deal with Northwest, which exited bankruptcy the same day as Delta. His old company brought what Delta lacked -- a premium international franchise. But Anderson felt that to make the deal work, Delta's culture and practices had to dominate. The Northwest employees were virtually all unionized, and the big unions were hungry to use that wedge to bring the Delta employees into their ranks. "I was determined to keep most of Delta non-union," says Anderson. "We needed to maintain the direct relationship with employees."

Delta argued that its pay levels were higher than unions were commanding at other airlines, and that its work rules gave flight attendants and machinists the flexibility to work longer hours, and hence pocket more pay. Its generous profit-sharing plan, which now hands employees 10% of the profits up to $2 billion and 20% over $2 billion, also attested to Anderson's goodwill. In 2010 over 50,000 flight attendants, machinists, meteorologists, and members of other trades voted on whether to join unions. All nine elections went in favor of management. In one stroke, Delta effectively de-unionized almost 17,000 Northwest employees."

I've argued before that a union I could get behind is one that would push a lot of benefits and comp into a profit sharing plan - that way, the employees are truly incented to make the company successful.

Of course, that's not the way unions work.  The combined Delta/Northwest company voted no to unions in most workgroups, and 17,000 Northwest employees effectively got decertified.

How's that decision working out for them?  In February, most of Delta's now 80,000 employees got bonus checks equal to roughly a month's salary.  Sounds like a good decision.  The profit sharing plan was a cornerstone of Delta's pitch to it's non-union employees (the votes they had to dominate) during the election.  

Think about it - in a industry dominated by unions, Delta gave it's non-union employees the chance to vote on representation (a huge risk) and won. But they had already been treating them well - and like owners.

Well played, Delta.

Comments

Laura

Great article!! Delta is doing a lot of things right. Not only is profit sharing an incentive, but there are also monthly incentives that show up in employee paychecks. There is a lot of hard work and pride at Delta Air Lines!!

James Lochner

Actually, Delta did not -->give<-- it's non-union employees the chance to vote on representation. It is required under the law. If Delta had it's way, there would have been no vote at all. Delta spent millions to suppress the union under the guise that they did not want a third party to come between it's employees and management. However, they have hired a third party company to manage their disability and FMLA claims, which has become a complete disaster. Also, the profit sharing bonus barely cover the increased health costs toward the insurance premiums from the only company Delta authorizes, United Health Care, of which Richard Anderson was the former head. Work rules change day by day, depending on what gives management the advantage over the day-to-day operation employees. The employees deserve a contract. If management disagrees, perhaps they should void their own contracts.

Graham Broadbridge

In the 1980s I was GM for British Caledonian Airways in Nigeria where we met your Delta Panam manager Tom Napier Collins. We've lost touch with him over the years so call you tell me where he is and if he is still alive.
Many thanks.
G Broadbridge

william todd

I take issue with the comment "His old company brought what Delta lacked -- a premium international franchise." Really? Delta served far more international markets than NWA prior to the merger, including most of Europe, Central and South America, the Caribbean, parts of Africa, and some cities in Asia. Northwest itself served very little of Europe, none of S. or Central America, limited markets in the Caribbean. DAL was a truly "global" airline whereas NWA was not even close. Their only strong suit they had was Asia.

Mark Thompson

I was a manger for NW for ten years and my experiences with the IAM union was horrible. I did worked at LGA and DTW. In NY, a union ramp employee defecated on a manager's desk the first day she started. Once we caught rampers stealing out of passengers' luggage, had it on video tape. We fired those involved, and the company cut some deal and brought them back. Many stories I could tell. In BOS, a union employee sent a supervisor out to pick up dinner. She never returned, she was found in the trunk of her car with her throat slit and her tounge pulled out of ther throat. A mafia necktie. She had turned in the rampers for stealing credit cards from the U.S Mail shipped on the planes. Best thing that ever happened to NW was Delta.

Jim Akers

Mark Thompson is an idiot. You know nothing of what happened to Sue in Boston. I was there had nothing to do with union you kack ass

Jim Akers

You should be ashamed of yourself.

James Malcolm

Check CHANGE.ORG. DELTA MUST DO RIGHT BY IT'S WORKERS.

Travis garrison

Yea right! That's why pilots who have representation are getting $90,000 profit sharing checks and the FAs got there profit sharing cut in half. That's why FAs have insurance plans with $13,000 deductibles yea BS. That's why FAs are now having extra turns thrown into their trips if their layover is longer than 11 hours because management takes such good care of them.

Joe

Are you kidding me about Delta risked to go to an election. It’s smart Delta was bigger than Northwest and most of the Delta people were sold on the whole non union idea. I bet you any money today if they pulled that today most if not all of Delta would’ve voted yes. It’s funny right now southwest is ramp agents are making more money than Delta Ramp agents. Not to mention most Delta agents are ready reserve. Which get no benefits.

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