Jan. 28, 2008: Delta, Northwest Employees And Customers Should Be Leery Of Proposed Merger


According to news reports, one of the biggest issues in the current merger talks between Atlanta-based Delta Air Lines and Northwest is who would run the new company — the Delta guy or the nabob from Northwest.

I’ll try to keep this simple, but it seems that Richard Anderson, Delta’s current CEO, used to be at Northwest and wants to be CEO in the new company. But Doug Steenland, who now runs the Minneapolis-based airline, worked for Anderson at Northwest and has his heart set on being chairman. Anderson wants no part of that because Steenland might get the upper hand and decide to toss him out on his bum-bum for having made him spend his winters in Minnesota.

To date, there hasn’t been much said about the benefits of the merger for the flying public. The attitude seems to be let ‘em eat cake — or peanuts, if they can get them. Just know that if the merger comes to pass there will be one less competitor in the airline business, less choice of times to fly and places to fly, and the opportunity for customers to pay more money for that dubious privilege. No wonder Wall Street enjoys mergers like this one; it reduces supply without greatly reducing demand. Who makes money in a situation like that? Guess.

And what about employees? Glad you asked. In the merger game, employees are simply numbers to the bean counters. Cost causers. They require nettlesome things like salaries and benefits. You know what those can do to a company’s bottom line. Mergers are designed to get rid of as many human beings as possible and assign their jobs to a computer. Computers don’t care about vacation time with the kids and don’t need bathroom breaks. Bean counters love computers.

Still, there is a chance the Delta-Northwest deal may not happen. Beyond deciding who gets the primo parking space and first dibs on the saltines in the executive dining room, there is another hurdle to the proposed merger of the two airlines. U.S. House Transportation Committee Chairman James Oberstar (D-Minn.) says he opposes the merger because it would hurt consumers. Besides, Oberstar says if he has to live in Minnesota where it snows in July, so should Northwest’s employees. Why should he have all the fun?

I care not one whit if the Delta-Northwest merger occurs because, thank the Lord, I don’t have to fly anymore. Been there, done that. But I do care that the executives and spin doctors not insult our intelligence about the benefits to the public and to employees. That is a bunch of bull butter, and they know it. Mergers and takeovers benefit the top executives, Wall Street investment firms, and in some cases, but not all, the shareholders. Employees and customers are mere afterthoughts. That I know up close and personal.

It has been over a year since my alma mater, BellSouth, was acquired by the “new” AT&T, aka Southwestern Bell. It could have been the other way around had BellSouth’s top management not been so timid and unimaginative.

Yet, according to the AT&T-BellSouth proxy statement, BellSouth CEO Duane Ackerman walked away from the deal with $9.2 million in severance pay, plus some $37 million in restricted stock, restricted stock units, stock options and performance shares. At the meeting in July 2006 to approve the acquisition, Ackerman assured employees who were concerned about reduced health-care benefits that if they are retired, “the pension plan will continue. You should see no change.” In other words, I could sleep well.

This month I found out at the pharmacy that my insurance card was invalid. AT&T had changed providers but had failed to notify me. When I checked with the company, I was informed there would be changes in my benefits package also, but as of this writing I don’t know what they are. Meanwhile, Ackerman is still counting his money.

So let this be a warning to all you Delta and Northwest employees out there watching your respective CEOs play “Dueling Egos” and extolling the virtues of a dynamic new company: If there is a pony in the merger pile, I am still trying to find it.