The conventional wisdom is that labor unions in the US are close to dead and no longer have much influence on the managements of big companies. Tell that story to the boards at Northwest (NYSE: NWA) and Delta (NYSE: DAL). Disagreement at the pilot's union may undermine a merger between the two airlines.
According to The Associated Press ,"the pilots unions have agreed on a comprehensive joint contract, but they are unable to agree to how seniority for the 12,000 pilots would work under a combined carrier."
The dubious theory behind airline mergers is that putting two carriers together saves money, but concessions to labor to get a deal done may undermine that. It is also not clear that a newly combined airline can avoid the customer service problems early in the process. These troubles often drive customers away.
While the industry looks at a number of business combinations, pilots and other unions are pushing their agendas. The message is simple. If you want a merger, it is going to cost you.
Douglas A. McIntyre is an editor at 247wallst.com.
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Reader Comments (Page 1 of 1)
2-20-2008 @ 2:09PM
Cecilia said...
Good! I hope this merger doesn't happen. With flights already skyrocketing my daughter will not get to come home often at all..and I need her help as I get older