May 28 - Delta Air Lines Shows its Anti-Union Colors


INDUSTRY ANALYSIS

By Kevin Mitchell

The colors comprising our revered American flag represent our nation’s fundamental values. Red is for hardiness and valor; blue for vigilance and justice; and white for purity and innocence. Then, there’s Delta Air Lines.

When it comes to advancing its anti-consumer, anti-competitive protectionist agenda, Delta loves to wrap itself in the colors of the Star-Spangled Banner and to claim it is a vigilant and pure champion of American workers. However, always judge Delta by its actions, not its disingenuous attempts to exploit nationalist sentiment. Delta recently showed its true and not-so-beautiful colors. Not surprisingly, they are not pro-worker, and they are not red, white or blue.

The right to vote and make informed choices is a cornerstone of our national fabric. It is a bedrock principle. So too is the Constitutionally protected right of association. Whether an election for President of the United States, a local School Board or workers’ decisions whether to choose union representation, it is unseemly to trivialize and smear the importance of voting and the freedom to associate. Yet, that is precisely what Delta has been accused of doing to frustrate attempts to unionize its 44,000 unrepresented workers - flight attendants, and ramp, tower and cargo workers.

Two Delta anti-union posters deservedly have been widely condemned. One insulting poster tells Delta workers that they would be better off buying video games rather than paying union dues to the IAM. The other condescending one encourages them to instead buy rounds of drinks for friends while watching football games. Seriously?!

Understandably, Delta is being blasted for its anti-union policy and practices, including these posters and its anti-organization campaign - Don’t risk it, Don’t sign it - it shouts out.

The posters caught the attention of Presidential candidate Senator Bernie Sanders who condemned Delta by tweeting “[s]top trying to undercut workers' right to form a union and negotiate for better wages.”

On May 15, nine (9) US Senators wrote Delta CEO Ed Bastian demanding an end to the carrier’s “insulting and demeaning anti-union communications.” They said “[t]he time has come for Delta to respect its workers’ fundamental right to freedom of association and stop bombarding employees with anti-union communications.” It was signed by Senators Richard Blumenthal (CT), Edward Markey (MA), Elizabeth Warren (MA), Sherrod Brown (OH), Jeff Merkley (OR), Ron Wyden (OR), Bob Casey (PA), Bernie Sanders (VT) and Tammy Baldwin (WI)

Separately, Minnesota hub-state Senator, Tina Smith, wrote Mr. Bastian that, “[u]nfortunately, your current campaign appears to be rooted in anti-union scare tactics rather than a fair and impartial presentation of relevant information to allow workers to make an informed choice.”

Conspicuously absent from any criticism of Delta is its other Minnesota hub state Senator, Amy Klobuchar, who often carries water for Delta in its lobbying efforts. Presidential candidate Klobuchar’s silence suggests she condones Delta’s anti-union behavior, unlike fellow Presidential candidates Senators Sanders and Warren who both have taken Delta to task.

Of course, honest people can agree or disagree on pros and cons of worker representation. Delta workers deserve a serious merit-based discussion of both. Instead, Delta regrettably has chosen to cavalierly trivialize the importance of the decision by unfavorably comparing the stakes with buying video games and rounds of drinks. Delta has a long history of vigorously fighting unionization of its workforce. However, this is a new Delta low.

Expect more heavy-handed tactics and anti-union smearing by Delta. It has a huge war chest to thwart unionization efforts. Delta is awash in cash. According to The New York Times, last year Delta did not pay cash federal income tax on its over $5 billion in profit. In fact, the Times reports that Delta trailed only Amazon among the 30 most profitable US corporations that did not pay federal income tax last year. (See NYT article at https://btcnews.co/2WmflAb.)

How is that possible? For starters, Delta didn’t just have a tax-free ride in 2018. It has not paid cash federal income tax in more than a decade. The US Tax Code has permitted it to carry-forward past losses that off-set multiple years of record-setting multi-billion dollar profits. American Airlines and United Airlines similarly are getting tax-free rides courtesy of US Tax Code-permitted Net Operating Loss (NOL) carry-forwards.  

For Delta workers, this tax-free ride should have an especially bitter taste. Past losses led Delta to file for Chapter 11 bankruptcy reorganization and terminate its pension plan dumping that liability on the Pension Benefit Guaranty Corporation (and ultimately US taxpayers). The result is that Delta workers suffered massive salary cuts and they watched their hard-earned pensions virtually disappear.

However, thanks to the alchemy of the US Tax Code, their financial hardship was their corporate employer’s and shareholders’ gains. The same losses that devastated Delta workers were turned into golden NOLs that for more than a decade have shielded Delta from paying a single dime in cash federal income taxes. Capital benefits, labor suffers. Delta is some colorful stars-and-stripes-waving champion of US workers. 

What’s more, Delta’s protectionist lobbying campaign against Open Skies, and the much-needed competitive choice offered to consumers by Emirates Airline, Etihad Airways and Qatar Airways (Gulf Carriers), is funded by US taxpayers and the Delta workers who sacrificed so dearly. This, as Delta increased outsourcing of maintenance to foreign repair stations and pilot and cabin crew jobs to foreign partners.

The International Association of Machinists (IAM) and its organizing efforts are in Delta management’s crosshairs. IAM leaders shouldn’t be surprised by this disrespect. IAM-represented US workers are important stakeholders in the success of the next generation Boeing 777X program and the hundreds of thousands of US jobs it is expected to create and support. To date, Gulf Carriers have purchased 235 of the 344 Boeing 777Xs sold. Emirates, its largest launch customer, alone has purchased 150 777Xs. According to the US Commerce Department, these Gulf Carrier purchases will support/sustain some 555,000 US middle-class jobs.

As for Delta, American Airlines and United Airlines, they have purchased not a single 777X despite enjoying record-setting, tax-free profits and balance sheets bolstered by their employees’ sacrifices.

That bears repeating with emphasis. For the Boeing 777X program alone, Gulf Carriers’ loyal support will sustain over half-a-million US jobs. Despite pockets swelling with tax-free profits, Delta/American/United will support not a single one. Delta, for example, instead chose the Airbus A-350, and in an in-your-face to US workers, has anointed it as Delta’s flagship airplane.

The values represented by the colors of Old Glory are not embraced by Delta management in its shameful union-bashing campaign.

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