Merger communication in the spotlight
US airline deal puts focus on communication issues.
US companies Delta Air Lines and Northwest Airlines announced a $5bn (£2.5bn) merger deal this week that will create the world's biggest airline carrier.
The new airline, to be called Delta, will employ 75,000 people worldwide but will be based in Atlanta.
Union resistance to the move looks likely, however, and quite a task could loom for internal and external communicators at both airline carriers. News in February, reported that The International Association of Machinists and Aerospace Workers (IAMAW) said it was joining with a passenger rights group to oppose any mergers by big airlines.
The International Association of Machinists and Aerospace Workers said it was joining with a passenger rights group to oppose any mergers by big airlines.
The union represents baggage handlers, ticket agents and other employees at Northwest, United and Continental Airlines, but not at Atlanta-based Delta, which is largely non-union.
Put employees and passengers first
"Employees and passengers are the 2 groups essential to an airline's success, yet they're the ones that are most hurt in mergers," Robert Roach Jr., the IAMAW union's general vice president, said in a statement Monday. "Airlines must work with employees and cater to passengers if they expect to succeed."
The merger is subject to the approval of Delta and Northwest shareholders and regulatory approvals. It's expected that the regulatory review period will be completed later this year.
"Merging Delta and Northwest is the most effective way to offset higher fuel prices and improve efficiencies, increase international presence and fund long-term investment in the business," said Delta CEO Richard Anderson, who will lead the new airline.
Job cuts loom
As with the majority of mergers, it’s also suspected that a number of job cuts will be made. Delta's announcement of the merger deal mentioned that "A detailed integration plan will be created by the transition committee made up of leaders from both companies. After closing of the merger, the consolidation of overlapping corporate and administrative functions will result in some job reductions or company-paid transfers."
According to another report, on bbc.co.uk, Delta has said these cuts are likely to be in the corporate and administrative departments.
Delta also announced earlier this year, before the merger deal was agreed, that it would cut 2,000 jobs in 2008.
Delta also announced earlier this year, before the merger deal was agreed, that it would cut 2,000 jobs in 2008.
But part of the merger announcement included that the company "expects no involuntary furloughs of frontline employees as a result of this transaction" and the existing pension plans for both companies’ employees will be protected.
"Partnering with our employees"
The Board of Directors at the new company will be made up of 13 members, 7 of whom will come from Delta’s board, including Anderson, and 5 of whom will come from Northwest’s board, including Bostock and Doug Steenland, the current Northwest CEO. One director will come from the Air Line Pilots Association (ALPA).
Anderson said of the merger: “We believe by partnering with our employees, including providing equity to US-based employees of Delta and Northwest, this combination is off to the right start. Together, we are creating America’s leading airline – an airline that is financially secure, able to invest in our employees and our customers, and built to thrive in an increasingly competitive marketplace.”
Merger communications package
An in-depth information package about both the Delta/Northwest merger, and mergers in general, has been provided online. Hub readers might be interested to see the level of background about the merger plans that's been provided, and also to gauge how internal and external communication teams at both organizations would have had to work closely together to align their messages.
Have your say
Have you ever had to cope with union negotations? From which side of the fence? Which channels or approach works best for communicating with employees during a merger or major upheaval?
Discuss these issues with other comms practitioners by joining the Internal Comms Hub members' group on the Communicators' Network.
Other recommendations:
TOP TIPS: Six ways to communicate effectively during a merger
How to manage the people side of mergers
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