Merger Challenge: Getting the Workforce to Buy In
I don’t fly on Delta or Northwest much these days, so I don’t really have any personal insight into whether the proposed merger of the two airlines makes much business sense. One thing I do know, however, is that making one strong and profitable company out of two struggling ones is near impossible if you don’t get the workforce to buy in.
And, that’s where this one may have a struggle. A story in The Detroit News headlined “Wary workers cloud Delta-Northwest merger” talks about the challenge of merging the workforces of union-dominated Northwest (with about 22,500 union employees out of 32,000 total) with primarily nonunion Delta (where 6,300 pilots and a small number of dispatchers out of 47,000 employees are represented).
The struggle to merge these two old-school airlines into a unified and productive workforce isn’t just about collective bargaining and work rules, but more about the history and culture that is embedded deep in their corporate DNA.
“Delta’s an interesting company in that it’s been able to maintain a decidedly nonunion culture while staying on relatively good terms with its employees,” said Michael Boyd, president of the Boyd Group, an Evergreen, Colorado-based consulting firm. “Even through bankruptcy, management has succeeded in convincing employees that their best representative is themselves.”
But, The Detroit News points out, “selling that culture to Northwest’s entrenched unions won’t be easy. Even before merger talk began, the Association of Flight Attendants got enough signatures on a petition requesting a unionization vote of 12,000 Delta flight attendants. Neither Delta nor the union has speculated on the outcome of the current election.”
If they can make this merger work, the combined airline would be the largest in the world. “The new Delta,” says The Detroit News, “is expected to employ about 75,000 people after the two companies are fully integrated. [But] employees worry: Will management follow through on promises not to cut jobs or close hubs? If the companies are in such dire financial straits because of fuel prices, will they be looking to cut wages next?”
Those are all good questions, because those are all reasonable worries for workers to have. Delta has promised that no frontline workers will lose their jobs in the merger, but is that realistic given the huge and unrelenting rise in fuel prices?
I question that promise, and so does Joe Tiberi, spokesman for the union that represents 9,500 Northwest baggage handlers. “There’s no way they can combine without massive losses of jobs,” Tiberi told The Detroit News. “We’re also worried about merging our unionized workforce with Delta’s nonunionized workers. We have pensions, but they don’t. We have no guarantee Delta wouldn’t want to get rid of our union.”
It’s hard enough to make one good airline out of two struggling ones when everyone is on board. But it is damn near impossible if you have union squabbling and critical workforce issues to hurdle. The only saving grace here is that Delta’s management seems to be driving this deal, and frankly, Delta’s management seems a lot more sensitive to worker issues than Northwest’s does . That raises the odds of success, but not enough for me gamble my next trip on Delta. I’d be surprised if a lot of other frequent travelers don’t feel the same way.














