Nov. 30, 2003: Delta’s New Strategy: “Warm and Fuzzy” All Over

This past October, Delta Air Lines CEO Leo Mullin proudly announced a new direction for his beleaguered airline, entitled “A Winning Strategy.” In an interview with the Atlanta media, Mullin was quoted as saying, “We have a winning organization. You (the employees) are going to have a future here.” Shortly after that comment, Mullin jumped ship with a $16 million pension for his six years and eight months on the job. Call me picky, but maybe he should have told us that “A Winning Strategy” included him being the big winner and leaving the employees to deal with the future.

I seem to recall a compensation plan put together by Delta’s board of directors this past March that gave Mullin and 32 other executives some $43 million of bonuses and bankruptcy-proof pensions to “keep the Delta management team together.” Good idea, except the leader of the Delta team has bailed out less than a year after the plan was implemented. And business nabobs wonder why we don’t trust them any farther than we can throw them and their big fat stock options?

Now comes the hocus-pocus. The new CEO, Gerald Grinstein, has the media hyperventilating over his “people skills” and breathlessly reporting his visits to Delta workrooms to cozy up to employees. Is this the same Gerald Grinstein who, as chairman of Delta’s board of directors, approved the untimely and obscene executive compensation package? If you haven’t been around public companies, let me give you a helpful clue: Executives can’t do squat without the approval of their board of directors. Therefore, the Delta board is Villain Number One in the debacle that has severely wounded the airline’s credibility and employee morale along with it. If the Delta employee body buys into Grinstein’s warm and fuzzy approach without demanding some straight answers to some tough questions, shame on them all. For example, Mr. Grinstein, why did you and the board approve that ungodly compensation plan? And, Mr. Grinstein, do you understand that you are the guy who helped get us in this mess?

But, alas, I doubt that will happen. Employees rightfully just want to put this whole sorry episode behind them. Let the executives take their ill-gotten gains. Maybe some of them can now afford to buy mirrors and look themselves in the eye. Besides, Grinstein has an unspoken weapon in his arsenal. Delta has laid off 17,000 employees. They can lay off more if they have to. In other words, employees will have to suck up their morale problems and haul a once-wonderful airline out of the muck in which it currently finds itself or they could lose their jobs. In the meantime, Mr. Warm and Fuzzy can tell them what great folks they are and how proud he is of them. The Pharaohs used the same kind of baloney on the poor slobs hauling blocks of stones up the hill to build the pyramids.

Rank-and-file employees are susceptible to having the Big Boss walk in the door shaking hands, laying on the charm and acting like “one of the guys.” I have seen it personally, and it is a very effective tactic. (“Guess who came into the breakroom at work today, honey? Mr. Grinstein. I shook hands with him, and he is really nice. Mr. Grinstein couldn’t have had anything to do with those bonuses. I’ll bet he was out of town when that happened.”)

While Gerald Grinstein is busy stroking the Delta employees, what is Leo Mullin planning to do with his free time … idle hands being the devil’s workshop and all? My suggestion is that he run as the Democratic candidate for the U.S. Senate from Georgia. Nobody else seems interested in doing so. Right now, the Democrats’ only candidate is an unknown female state legislator from Norcross who is mad at Gov. Sonny Perdue about the state flag. I predict she will come in second in a one-person primary. On the other hand, Mullin is imperious, doesn’t seem to give two hoops and a holler about the common folks and knows a lot about feathering his own nest. He would be a natural for the U.S. Senate.