A 'take the money and run before it's all completely gone' mentality plagues Delta Airlines as officers and directors could recieve a large chunck of cash even though some reports have the airline losing US$5 million a day.
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The union for Delta Air Lines' pilots objected Thursday to the carrier's request for permission to pay up to roughly $14 million to officers and directors who are asked to leave the company because of its reorganization.
The Air Line Pilots Association said the Atlanta-based airline's Feb. 8 bankruptcy court request would be bad for employee morale and would threaten the company's reorganization process. The union also warned it would complicate negotiations over a long-term contract concessions deal between the union and Delta.
Delta responded that it only wants to restore severance benefits the executives had before Delta's bankruptcy filing to help stem unwanted departures to other companies. Delta noted that its court-appointed creditor committee supports the move. "To protect employees and their families from having no financial safety net if they are let go, severance rights are a standard part of most companies' basic human resource strategy," the airline said in a written statement. The carrier also said pilots and other employees already qualify for severance benefits, although most employees are limited to a maximum of 13 weeks' severance.
ALPA said Delta is "tone deaf" to the effects that a severance program for a select group would have on other workers.
"At a time when Delta is proposing deep cuts in pilot wages and benefits, deep resentment and anger over a soft-landing program for officers and directors can neither be understated nor should it be ignored," the union said in its objection.
In the proposal before Bankruptcy Judge Adlai Hardin, Delta asks for permission to reinstate its pre-bankruptcy severance practices for 144 officers and director-level employees. They would get six to 12 months' severance if their jobs are terminated because of specified organizational or business changes. Employees who quit or are fired for cause would not receive severance.
Only if all 144 employees were terminated would the cost reach $14.2 million, the company has said. CEO Gerald Grinstein and Chief Operating OfficerJames Whitehurst would not participate in the program.
The company-union dispute comes as they face a March 1 deadline to negotiate a new contract deal. It would supersede a temporary pact reached in December.
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