=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SFGate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2004/08/04/f= inancial1654EDT0279.DTL --------------------------------------------------------------------- Wednesday, August 4, 2004 (AP) Delta pilots say company could fall into bankruptcy if management persists = with concessions proposal HARRY R. WEBER, AP Business Writer (08-04) 13:54 PDT ATLANTA (AP) -- Delta Air Lines' pilots union said Wednesday the struggling carrier will edge closer to bankruptcy if management continues to seek $1 billion in concessions from them without asking other stakeholders to tighten their belts. The chairman of the union's executive committee, John Malone, made the comment in a strongly worded letter to other pilots. "Management's proposal appears to have only one purpose -- to exploit the current situation and attack our profession by destroying our contract," Malone wrote. The letter was a response to the Atlanta-based airline's request Friday for the pilots union to give up $1 billion in concessions, including a 35 percent pay cut and work, scheduling and pension changes. The union, which represents 7,500 active Delta pilots, had proposed a 23 percent pay cut and other concessions that would save the airline up to $705 million a year. Delta, the nation's third-largest airline, has warned that it may have to file for bankruptcy if it doesn't get deep concessions from pilots. CEO Gerald Grinstein said in a letter to pilots Friday that the company's request is the minimum it needs to survive. But Malone, in his letter, said management has failed to include other stakeholders in Delta's effort to cut costs. "Either management will figure out what it 'needs,' address our equity requirements and make other stakeholders participants in a comprehensive restructuring, or we will take another path," Malone wrote. The comment appeared to be a threat of action by the union, but union spokesman Chris Renkel said it was not meant that way. He said the union was referring to the path the company will take if it doesn't compromise. In a hot line message to Delta employees Wednesday, Grinstein said all company groups are being asked to make sacrifices, not just pilots. He also said the company is working to restructure the company's debt, renegotiate aircraft leases and reconstruct Delta's relationship with vendors and suppliers. "I had sincerely hoped that our airline's financial situation could be stabilized in time to avoid the need for a greater level of sacrifice from our pilots and additional contributions from all employees who have already contributed," Grinstein said. "But with fuel now at $40 (per barrel), our financial situation -- already urgent -- is worse, and time is running out." Delta's other work groups, including flight attendants and maintenance crews, are not unionized. Delta officials have said there have been concessions in some areas by other employees. For instance, the company has said nonunion employees now pay a higher amount toward their health insurance. That has resulted in a reduction in those employees' take-home pay, spokeswoman Meghan Glynn said. She did not give specifics. Delta's pilots, among the highest paid in the industry, earn between $100,000 and $300,000 a year, Delta has said. Glynn said management is willing to work with the union, but noted the airline's financial situation is serious. "This is not a take-it-or-leave-it process," Glynn said. "There was and = is no intent to be punitive or to affix blame. Our motivation is and remains to avoid bankruptcy and rebuild a viable airline." Delta has lost more than $5 billion and laid off 16,000 employees in the last three years. It has been hit hard by high fuel costs and competition from low-fare carriers. In his letter to fellow pilots, Malone said the union understands the company's plight, but believes the airline needs to stop looking mostly to them to solve all of its problems. "Has management decided to assault the profession because the opportunity exists -- because they know the airline cannot be restructured outside of Chapter 11 and they need a scapegoat?" Malone wrote. "Is management trying to fix the problem or affix the blame? We may never know the answers to these questions." On the Net: Company: www.delta.com Pilots union: www.dalpa.com ---------------------------------------------------------------------- Copyright 2004 AP