Delta Airlines & Gerald Grinstein

Delta Airlines & Gerald Grinstein - Delta Airlines...

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Gerald Grinstein came out of retirement to accept the position of Chief Executive Officer for Delta Air Lines in 2004, filling the position vacated by Leo Mullin, who retired amid controversy concerning excessive executive packages and cash bonuses. At the time of Grinstein's commencement, Delta found itself in a deep financial crisis, eager for leadership. Following the tenants in Ronald Heifetz and Donald Laurie's article, "The Work of Leadership," Delta's newly appointed CEO kept an eye on Delta's position as a whole, while actively seeking any employee input from all ranks within Delta. Quickly alerting to the mounting tension that existed between management and labor, Grinstein recognized the issue as an adaptive change that signaled a breakdown in the organization that needed to be repaired. Taking a page from Le Calvez in the case study "Four Seasons Goes to Paris," Grinstein fostered a spirit of open and honest communication between the all members of Delta, slowly regaining the trust and confidence of Delta's frontline employees. Grinstein pushed the employees to confront the difficult trade off decisions facing Delta, resulting in an agreement of deep concessions from ALPA, Delta's pilot's union. Reflecting management's new attitude, Grinstein allotted himself a salary far below industry average and removed any opportunities for bonuses or stock options. Rising pressure on fuel prices and increased competition from low cost carriers still drove Delta to file for protection under Chapter 11 bankruptcy in September, 2005. While under bankruptcy protection, Grinstein took the opportunity to accelerate the restructuring begun in 2004, slashing domestic routes while expanding international ones, shedding non-performing assets, cutting thousands of jobs, imposing additional pay cuts and pension plan freezes for nonunion employee, successfully negotiating a second concession from ALPA, and reduced his own salary by 25%. Grinstein also opened important Board meetings to appointees from various levels of employment to offer opinions concerning the evolving environment. Because of their inclusion in the decision making process, the employees gave their support to the resolutions reached. To deepen their financial interest in the company, Grinstein gave employees a stake in
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Delta Airlines & Gerald Grinstein - Delta Airlines...

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