Madam Speaker, joining me tonight are Mr. Scott and Mr. Bishop from Georgia. Madam Speaker, I rise tonight to tell you about a bad deal, a very bad deal. You may have read about the recent unwanted, unsolicited and unnecessary bid from…
Madam Speaker, joining me tonight are Mr. Scott and Mr. Bishop from Georgia.
Madam Speaker, I rise tonight to tell you about a bad deal, a very bad deal. You may have read about the recent unwanted, unsolicited and unnecessary bid from U.S. Airways to take over a strong, proud, Georgia company named Delta Airlines.
But Americans have learned the hard way that bigger is not always better, and in this case, Delta's takeover by U.S. Airways will have a devastating impact on the people of Atlanta, on the east coast of this country, and it will rob the American travelers of the economic advantages that competition creates.
Mr. Speaker, today I represent thousands of Delta employees all over Georgia, hundreds of Delta pilots, and the executive leadership of that organization. Delta employees and its executive are working through some difficult problems right now as they reshape the company, but when it comes to this merger, they speak with one strong and mighty voice.
Management and employees agree on this. None of them are for this deal. I think that speaks volumes, Madam Speaker. It demonstrates how deeply they believe this takeover will impair the quality of airline transportation in our country.
You may have heard that Delta had run into some problems and was going through bankruptcy proceedings, but it is about to emerge from this bankruptcy a stronger, better airline, with a renewed commitment to serve the American people, American travelers and world travelers.
Delta had problems but it was not a failing company. They have used the hardship of bankruptcy to make tremendous progress. In spite of its challenges, it has created 70 new international destinations. It offers service to all 50 States. Employee morale has improved. Pensions for 90,000 employees and retirees were saved, and 2,500 pilots, machinists and other employees have been called back to work.
It is because of the sacrifice of Delta employees and executives to make good on its commitments to its creditors that it became a prime target for this hostile merger. It is because Delta was able to win the uphill battle of bankruptcy and is poised to emerge transformed that U.S. Airways want to take it over against its will. That is not right, that is not fair, and that is not just.
This is not a case of the survival of the fittest. U.S. Airways is in trouble. It has already gone through two bankruptcies and cannot seem to bring its merger with America West to a close.
In 2004, U.S. Airways was on death's doorstep. It had no choice but to merge with America West. It would have had to liquidate all its assets if it had not merged with another company, but 2 years later, the integration of U.S. Airways and America West is still not complete. The majority of its labor groups are still working under separate contracts. It still has two IT systems. U.S. Airways has not even repainted all of its aircraft.
Madam Speaker, even though U.S. Airways cannot seem to manage its own merger, it is hoping and praying that it can take advantage of the hard work and tough sacrifices the good people of Delta have already made so that it can survive. This is not a win-win situation. It is a win for U.S. Airways and an incredible risk for Delta Airlines and for all of its customers.
It is a risk for the people of Atlanta, a risk for Hartsfeld-Jackson Airport, the largest commercial airport in the world. It is a risk for the State of Georgia and thousands of American citizens.
At this time, Madam Speaker, I want to yield to my colleague and friend from the State of Georgia (Mr. Scott).
Mr. Scott should know we have two more Bishops waiting to speak. We have Bishop of Georgia and Bishop of Utah, and they both live in cities that are served by Delta. Bishop of Georgia from Albany, Georgia, and Bishop of Utah in Salt Lake City.
Madam Speaker, I now yield to Mr. Bishop, my colleague from Georgia.
Let me thank our colleague from Utah for participating in this Special Order. As we said earlier, Madam Speaker, this is a bad deal, this is not a good deal, and that is why we are speaking out tonight and we will continue to speak out in opposition against this proposed takeover bid until this proposal is off the table. As it has been said, we want to secure Delta's future as a strong stand-alone company. That is in the best interests
of the American people, not just to people in the Southeast, but to people in the West and all over this country.
Madam Speaker, I rise tonight to tell you about a bad deal. You may have read about the recent unwanted, unsolicited, and unnecessary bid from US Airways to take over a strong, proud, Georgia company, named Delta Airlines.
But, Americans have learned the hard way that bigger is not always better. And in this case, a Delta takeover by US Airways will have a devastating impact on the people of Atlanta, on the east coast of this country, and it will rob American travelers of the economic advantages that competition creates.
Mr. Speaker, today I represent thousands of Delta employees all over Georgia, hundreds of Delta pilots, and the executive leadership of that organization. Delta employees and its executives are working through some difficult problems right now as they reshape the company, but when it comes to this merger, they speak with one voice.
Management and employees agree on this. None of them are for this deal. I think that speaks volumes, Mr. Speaker. It demonstrates how deeply they all believe this takeover will impair the quality of airline transportation in the United States.
You may have heard that Delta had run into some problems and was going through bankruptcy proceedings. But it is about to emerge from this bankruptcy a stronger, better airline, with a renewed commitment to serve America's cities. Delta had problems, but it was not a failing company.
It has used the hardship of bankruptcy to make tremendous progress. In spite of its challenges, it has created 70 new international destinations. It offers service to all 50 states. Employee morale has improved. Pensions for 90 thousand employees and retirees were saved. And 2,500 pilots, machinists and other employees have been called back to work. And it is because of the sacrifice of Delta employees and executives to make good on its commitments to its creditors that it became a prime target for this hostile merger. It's because Delta was able to win the uphill battle of bankruptcy and is poised to emerge transformed, that US Airways wants to take it over against its will.
This merger puts the very successful efforts of an independent corporation in jeopardy, . . . and it would leave this important transportation resource in the hands of an institution that cannot seem to get its own house in order.
This is not a case of the survival of the fittest. US Airways is in trouble. It has already gone through two bankruptcies, and cannot seem to bring its merger with America West to a close.
In 2004, US Airways was on death's door--it had no choice but to merge with America West. It would have had to liquidate all its assets if it had not merged with another company.
But two years later, the integration of US Airways and America West is still not complete. The majority of its labor groups are still working under separate contracts. It still has two I-T systems. US Airways hasn't even repainted all its aircraft!
Madam Speaker, even though US Airways can't seem to manage its own merger, it is hoping and praying that it can take advantage of the hard work and tough sacrifices the good people of Delta have already made so that it can survive. This is not a win-win situation. It is a win for US Airways and an incredible risk for Delta Airlines.
It is a risk for the people of Atlanta, a risk for Hartsfield-Jackson Airport, the largest commercial airport in the world. It is a risk for the State of Georgia and thousands of American citizens.
I think freedom in the marketplace is important, but when a bad business deal like this one threatens the economies of so many communities and the lives of so many citizens, I think Members of Congress must take notice. I think we must step in and take a long hard look at the economic impact of this kind of hostile takeover.
Why must the American people pay, why must the employees pay, why must travelers pay when American businesses can't get their house in order? This takeover attempt will hurt people in my district, it will damage the economy of the State of Georgia, and it will isolate communities in the Southeast that have come to depend upon air travel.
I think the Members who stand with us tonight would encourage the Justice Department and the House Judiciary Committee to review this takeover with a fine-toothed comb so we can make sure it serves the best interests of the American people.
Madam Speaker, US Airways keeps using the word ``synergy'' to describe this takeover. They want to make us feel comfortable about this deal. But, synergy is just a codeword for cutting flights and eliminating competition. And that means higher prices for American consumers.
``Synergy'' means two companies working together to accomplish what one couldn't, but that's not what will happen in this merger. Delta could emerge as an independent company from this bankruptcy in a few months.
That's something US Airways could not do when it was in trouble. An independent Delta will continue to serve hundreds of markets that US Airways will cut off or cut back. This is not synergy; it is exploitation. It is suffocation.
US Airways wants to take over the strength of a new Delta Airlines for its own benefit and raise fares so it can service the huge new debt it has to take on to pay for this merger. Meanwhile American travelers will have to pay more money for less service.
If this merger is not stopped, travelers in many American cities will only have one air carrier to choose from. If they want to fly, they will have to accept monopoly prices or stay home. And if the past is any indication, the ``New Delta,'' as US Airways likes to call the results of this merger, will take full advantage of their monopoly.
Using the name, ``New Delta,'' tells us something about which airline has real strength and a better reputation. Madam Speaker, it would seem that US Airways has more confidence in Delta, than they do in themselves.
If the proposed merger goes as planned, there may be some reduction in fares between some big cities, but service to hundreds of small cities throughout the northeast region of this country--cities that are just beginning to build a new economic life, cities like Asheville, Augusta, Birmingham, and Jacksonville. That's what US Airways did when it merged with America West. There's no reason to think they won't do it again.
Some analysts say that a merger with Delta would be good for the airline industry. But, US Airways will weigh Delta down with $23 billion in debt. $23 Billion Dollars!
Delta went into bankruptcy because it had $21 billion in debt. This plan will probably send the two airlines right back into bankruptcy!
The whole purpose of Delta's bankruptcy negotiations was to reconfigure its debt load. It was a tough struggle, but Delta did it. And now US Airways wants to pile up staggering amounts of new debt in hopes that Delta can bear some of the load, hoping that a more efficient organization can solve its problems. That's like asking an expert swimmer to save one that's drowning. It might work, but there's just as much chance that they will both die.
There is no economic model, except maybe voodoo economics, that resolves debt by adding debt. This extra burden would drain the competitiveness of the merged airline and threaten the survival of both companies.
This is not a promising plan for Delta's creditors who are taking a risk that a company which cannot complete its own merger, could somehow juggle a brand new merger at the same time. Practically and economically, it doesn't make sense. This is a win for US Airways and much too risky for Delta.
US Airways executives have said they will find so-called ``synergies'' if the merger occurs when Delta is still in bankruptcy. Don't be fooled--that just means that the Delta executives and employees who have already sacrificed a lot, will be asked to sacrifice even more. And it means that all the agreements they worked so hard to gain are up for grabs.
It means US Airways wants to make new agreements that benefit its stock price without regard to the harm it would cause Delta's employees, Delta's passengers, or Delta's creditors. That's right-- Delta's creditors!
Gaining ``synergies'' while Delta is still in bankruptcy means rejecting contracts and leases Delta has already negotiated. That is a win for US Airways and a risk for Delta's creditors.
There are some who claim that airline mergers are unavoidable and good for the industry. In some instances, like the US Airways and America West case, end-to-end mergers of that sort can be good and competitive if they are executed well. Both of those airlines had very little overlapping service.
But Delta is in a very different position than US Airways was in when it received the America West offer. Delta is returning to profitability. It will emerge from bankruptcy in a few months. Delta's network is strong.
The morale of Delta's people is good. Delta's revenue picture is impressive. In no way does Delta need US Airways to survive. But US Airways needs Delta to survive. That's why this is a hostile takeover. It knows Delta would have no good reason to participate in this deal, except by force.
Madam Speaker, I am here today to raise the question: Will this merger really serve the best interests of the American people?
Will it benefit travelers and business people in small communities to fly at the will of a monopoly? Will the service cuts and hub closures benefit business and individual citizens in those cities? Most small communities that lose service will never again see a low-cost carrier come to town to save the day.
Just look at Georgia--there are no low cost carriers today in any cities other than Atlanta and Savannah.
Airlines won't take on those routes for the very reason that they haven't up to now. They don't believe in that kind of service. There are not enough passengers for them.
Delta is proposing to maintain those routes, and US Airways now has to compete with Delta to win in those markets. That competition helps keep fares down and provides choices a monopoly carrier will not offer.
And Madam Speaker, what about justice for Delta's employees? Delta's employees have sacrificed a lot to turn the company around.
They have been through lay offs, pay cuts, and uncertainty about the company's future and even their retirement benefits. They deserve to reap what they've sown. They have hung in there. They didn't give up in hard times. And this is the kind of nation that rewards hard work and sacrifice.
Delta employees should reap the benefits of their sacrifice. They don't deserve the risks of a US Airways takeover. They have been through the worry of losing their jobs and benefits. They have fought hard to win back their security. They don't deserve to lose the seniority they've worked so long to achieve.
And that's why--they don't want US Airways! They don't want to go back. They want to move forward with a free and independent Delta airlines.
Madam Speaker, I submit to you that the U.S. Government must look at this takeover bid and measure it against our nation's antitrust laws. We must begin a rigorous antitrust investigation by the Department of Justice. House and Senate Committees must also investigate this merger proposal thoroughly.
It is our duty, it is our obligation, it is our responsibility as Members of Congress to represent the best interests of our constituents and our nation, and to hold the feet of the responsible agencies of the Federal Government to the fire to make sure that their review is thorough, careful, and fair.
I am convinced that, if they look at this deal, they will find that it is more anti-competitive than the 2000 United-US Airways merger, which the Justice Department opposed. I am convinced that this deal is more anti-competitive than almost any other airline combination possible.
Over the years, Delta has been a significant economic engine, fueling the region's growth. It has helped to make Atlanta one of the world's most important international transportation centers. The potential loss of Atlanta as Delta's home would be a tragedy--a real blow to Atlanta, to the State of Georgia, and the people of the United States.
Madam Speaker, this is a bad deal. That is why we are speaking here tonight, and we will continue to speak in opposition to this takeover bid until it is off the table. We want to secure Delta's future as a strong, stand-alone company in the heart of Atlanta.
Madam Speaker, I yield to Mr. Scott.