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:
"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.