The article below from NYTimes.com has been sent to you by psa188@xxxxxxxxx /--------- E-mail Sponsored by Fox Searchlight ------------\ SIDEWAYS - NOW PLAYING IN SELECT CITIES An official selection of the New York Film Festival and the Toronto International Film Festival, SIDEWAYS is the new comedy from Alexander Payne, director of ELECTION and ABOUT SCHMIDT. Starring Paul Giamatti, Thomas Haden Church, Sandra Oh and Virginia Madsen. Watch the trailer at: http://www.foxsearchlight.com/sideways/index_nyt.html \----------------------------------------------------------/ Billion-Dollar Ball in Delta Pilots' Hands October 29, 2004 By MICHELINE MAYNARD Delta Air Lines' pilots, by far the best paid in the airline industry, face a painful choice over the next couple of weeks: accept a tentative deal that calls for a one-third cut in pay, or reject it and risk losing their jobs if Delta goes into bankruptcy and falters. If the pilots approve the concession deal, reached late Wednesday, they will be declaring a formal end to an era of high salaries in the airline industry. The industry, which once offered some of the most elite jobs in the American economy, has been wounded by high fuel costs even as stiff competition from low-fare airlines has prevented companies from raising prices to cover their costs. Among major airlines, Delta is the only one that has not been able to reduce its labor costs, in bankruptcy or out of it. Yet neither side is pretending the deal alone will save Delta from bankruptcy. It is "one very important and necessary piece of a very complex puzzle," Delta's chief executive, Gerald A. Grinstein, said yesterday in a memo to employees. "Make no doubt about it, due to Delta's precarious financial situation, many uncertainties remain." In his own message to pilots, John J. Malone, the chairman of the Delta chapter of the Air Line Pilots Association, described the deal as protection in case the airline files for Chapter 11 bankruptcy protection. The agreement "will hopefully buy Delta additional time" to continue its restructuring efforts outside bankruptcy court, Mr. Malone said. If Delta cannot avoid a bankruptcy filing, three of the industry's six major companies would be under bankruptcy protection, with the three others - American, Continental and Northwest - in questionable financial shape. "This is not a picnic," said Robert B. Reich, the former labor secretary, who is now a professor of social and economic policy at Brandeis University. "This is very, very difficult for people to deal with." Given the dire circumstances, Mr. Grinstein did not waver from his demand for cuts worth $1 billion, rather than compromise on the $705 million offered by the pilots. As a result, Mr. Grinstein, who has been in place since January, potentially passes his first significant test by reaching the tentative deal, which includes provisions that the pilots long resisted as far too harsh. Delta's stock, which climbed this week on rumors of a deal with the pilots, rose another 16 percent yesterday to close at $5.72. The plan gave pilots something they insisted upon, too: the chance to buy shares that would give them a 15 percent stake in Delta, though they did not get the board seat they wanted. But that is the only bright spot for the pilots, who will vote on the plan starting on Monday, with results expected on Nov. 11. It includes a 32.5 percent pay cut, starting Dec. 1. Salaries at Delta, which top out at $287,000 for the most experienced pilots, will be frozen for the next five years. The airline's pension plan will also be frozen; future contributions will be made through a 401 (k) plan. Yet Delta pilots, who have never been asked to take such cuts before, can see from the example set by the industry's bankrupt players that things could be much worse. United, whose pilots' pay has already been cut 25 percent in its two years in bankruptcy, plans to outline plans next month for another round of cuts. This month, US Airways' pilots approved their third round of concessions in two years, including pay cuts of 18 percent over the next five years. By reaching a tentative deal, Delta's pilots followed the guidance of their national union, which has repeatedly counseled members that it is wiser to reach settlements with the companies before the airlines file for bankruptcy. "Once you get into bankruptcy court, you lose all control over your destiny," said John Mazor, a spokesman for the Air Line Pilots Association. The talks that culminated in the Delta deal, in fact, were held at the union's national headquarters, which analysts said was a reflection of the high priority that the pilots' group placed on the negotiations. The agreement followed 18 months of discussions between the airline and the union, with Mr. Grinstein playing an active role since becoming chief executive. On Wednesday, with a deadline set by Delta looming, Mr. Grinstein phoned Mr. Malone from Atlanta, asking for a yes or no answer to Delta's final offer. Unless pilots agreed to the deal, Delta's board was prepared to approve a Chapter 11 filing at its meeting yesterday, people inside the airline said. Facing that ultimatum, leaders of the pilots' union accepted the company's offer. Delta had applied increasing pressure on the union in the last few days, both at the bargaining table and in its financial dealings. On Friday, Delta officials said the airline was ready to seek bankruptcy protection by the middle of this week if a deal did not happen, the first time it had disclosed its deadline. This week, Delta lined up a series of agreements, including a $600 million arrangement with American Express Travel Related Services, which hinged on a deal with the pilots. Less formally, the pilots also faced pressure from within their profession. Over the years, pilots at other airlines had watched enviously as Delta pilots kept their contract intact, while counterparts at American, Northwest, US Airways and United all granted concessions. http://www.nytimes.com/2004/10/29/business/29air.html?ex=1100062479&ei=1&en=807c4eb567d63519 --------------------------------- Get Home Delivery of The New York Times Newspaper. Imagine reading The New York Times any time & anywhere you like! Leisurely catch up on events & expand your horizons. Enjoy now for 50% off Home Delivery! 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