New Company, New Lives : Western, Delta Merger Hits Home With Many Workers

Last April, Juan and Lynne Matute pulled up stakes in Los Angeles and moved to the South. They had little choice. Western Airlines, their employer for nearly two decades, had been bought by Delta Airlines, and their jobs were moving to Atlanta.

Although they were reluctant to make the move, Lynne now says it was a “good decision, a real plus.”

All told, Western had 5,000 employees in Los Angeles, which was its headquarters, but Delta needed only about 2,900 employees here after the merger. The other 2,100 were all offered work with Delta--but the jobs, except for a few in Dallas, were in Atlanta, where Delta is based.

About 1,200 of the 2,100 made the move--more than what might have been expected. Relocation experts calculate that between 30% and 50% of employees usually go along when companies move.

Delta appears to have acted with greater humanity than many other corporations involved in the merger mania of recent years: Besides offering jobs to all of Western’s employees, it gave them financial help in moving and in selling their homes and helped those who chose not to move to find other employment.

Delta set up relocation offices in Atlanta. Employees and their families were allowed to make two expense-paid house-hunting trips to scout the area. Symposiums on Atlanta were conducted, and Atlanta real estate agents went to Los Angeles to help the employees with home purchases. Workers who refused transfers received amounts of severance pay in proportion to their length of service with the company.

But there were some whose lives were disrupted by the merger and who suffered significant hardship. While some of those who declined transfers have found better jobs in California, many have had trouble finding new jobs and some are still out of work.

In other cases, families have split up--for individual personal reasons--with one family member moving to Atlanta to take the Delta job and the others remaining in Los Angeles. Many of these employees commute from the Georgia capital to Los Angeles and back on weekends and spend meaningful amounts of time with their families only on vacations.

“People feel flabbergasted. Careers, lives, emotions, families, communities and personal finances may all be up for grabs as . . . (a) new company takes shape,” said Michael W. Mercer, a management consulting psychologist in Skokie, Ill., who chaired a recent symposium titled “The Anatomy of a Corporate Takeover” sponsored by the American Psychological Assn. “However, the impact on people’s lives, careers and emotions of . . . business deals (mergers) seldom is addressed.”

Liking Georgia

In the Matutes’ case, there appears to have been no emotional upheaval resulting from their transfer, even though he had moved to Los Angeles when he was 2 weeks old and she when she was 13.

But they had one major advantage--they both worked for Western, so neither had to quit a job to follow the other.

They say their life in Georgia is much more pleasant and serene than it was on the West Coast.

The 28 miles they commute to work every morning, for example, takes them 35 minutes; the 19-mile trip from Rancho Palos Verdes, they recall, often took as much as 1 1/2 hours.

They sold their 30-year-old, 2,300-square-foot house and bought a brand new, 3,400-square-foot home in Georgia--and had $80,000 left over. They used some of it to buy a houseful of new furniture. Among other savings: They now pay 40% less for automobile insurance for 40% more coverage.

Standard of Living Better

According to a survey conducted for Delta, a typical home in the Los Angeles area--between 1,200 and 1,300 square feet on a “tiny” lot--costs between $150,000 and $160,000. An Atlanta home of between 2,300 and 2,500 square feet on a half-acre lot can be had for $85,000. If the mass transfer of former Western employees had been in the opposite direction, the financial hardships would have been severe.

“We feel like we’re doing a lot better than we did in California,” said Lynne Matute, whose Delta job is in the information and systems department. (Her husband works in the telecommunications department.) “Our standard of living has improved considerably,” she said. “We are spoiled.”

Things were significantly different for Judy and Paul Oemcke. She worked for Western and was asked to transfer. He has a good job as a computer programmer with Security Pacific National Bank and did not want to give it up and move to a strange city.

Judy Oemcke had worked for 21 years at Western headquarters and was a data processor in the information center when the merger took place. In the move, she was offered a better job as a computer programming analyst.

“As soon as they gave me the offer, I knew I wanted to take it,” Judy recalled. “It was an opportunity I could not refuse. We sat down and discussed it. Paul encouraged me. He said ‘This is an opportunity you have wanted.’ ”

Paul Oemcke still lives in the couple’s house in Torrance “with the two cats.” They do not plan to sell the house because “we never would be able to buy it back again.”

Judy Oemcke now shares an apartment in Atlanta with a single woman who is also a Delta employee. “It helps her keep her expenses low and it helps me, too,” Judy said.

And the Oemckes have become long-range commuters. Every other Friday after work, Judy Oemcke catches Delta flight 187 at 7 p.m. from Atlanta to Los Angeles. On almost every other weekend, Paul makes the round trip beteen Los Angeles and Atlanta.

The Oemckes are not alone. Every weekend, about 50 such former Western employees are on the same flight traveling to see their families in Los Angeles. Indeed, one advantage airline employees have is that they can fly free on a standby basis, a factor that figured into the decision of many Western employees to accept the transfers to Atlanta.

Judy usually takes the 3 p.m. Sunday plane back to Atlanta, arriving there at 10 p.m. She says that traveling back and forth has not been too much of a physical strain, except on the few occasions when she caught the later “red eye” flight from Los Angeles and got to Atlanta just in time to head for the office Monday morning.

So far, the Oemckes have missed seeing each other on only three weekends in eight months. As “non-revenue” standby passengers, they are subject to being bumped when paying passengers fill the airplanes. Sometimes, one is forced to take a later flight than planned and, on a few occasions, when all planes have been crowded, they have had to cancel a weekend visit.

But they say the situation also has its benefits.

“We think that we appreciate each other more than we used to,” Judy Oemcke said. “We spend more quality time together.”

But not everybody will settle for a weekend marriage. Western employee Mindy Balgrosky and her husband wanted to stay together all of the time, and that meant that one of them had to quit a job. The couple chose not to move to Atlanta, and Mindy is still unemployed. She had worked seven years for Western before the merger and was manager of interline sales. She turned down the move even though she was offered a job in Atlanta that was better than the one she had in Los Angeles.

“I was one of the people upon whom the merger had a negative impact,” she said recently. “But I have a realistic approach. But the merger was the best thing for the majority of employees.”

Although she would like to work for an airline again, none of the carriers that used to be based in California exist anymore so it will be difficult.

Not all of the former Western employees who stayed behind did so because of their spouses’ employment. Some simply could not bring themselves to leave Los Angeles for other personal reasons. Leaving extended families often was a major consideration.

Instead of moving to Atlanta, Albert R. Hofer, who had worked in the Western maintenance shop for 20 years, retired a bit earlier than he had hoped to.

His main reasons for staying on the West Coast were his parents, three children and nine grandchildren, all of whom live in or near Los Angeles. He said in an interview that both of his parents and one of his wife’s parents are over 90 years old and need care and supervision, both physically and financially.

Hofer, 57, took severance pay equal to 15 weeks’ salary, six weeks of accumulated vacation pay and 12 weeks worth of sick leave that he had not taken.

“I walked out of the door with 33 weeks’ pay,” he recalled. “I made out all right.” He rolled some of the money over into an individual retirement account and gets a modest pension and medical benefits from his Teamsters Union local.

Perhaps the most attractive retirement benefit, Hofer said, is the lifetime flying privileges both he and his wife have on Delta.

“Delta goes where we want to go, and we both like to travel,” he said. Since the merger, the Hofers have been pheasant hunting near Spokane, Wash., and have visited Hawaii several times.

Career Changes for Some

James M. Rorick, a supervisor of the engine shop at Western, also took early retirement and has taken even more advantage of the free travel benefits, having gone on more than a dozen trips--including Ireland, Hawaii, Salt Lake City and Las Vegas. And he has not forgotten his old chums at Western. He has made several trips to Atlanta just to visit them.

The free travel benefits were given only to workers who retired. Delta allows retirements at age 50 if a worker has 25 years of service. With less service, retirement is permitted at 52. The number of travel passes that retirees receive depends on their years of service.

For some of Western’s workers, the merger prompted mid-life career changes that had been in the offing anyway. Such was the case for Thomas J. Greene, Western’s general counsel. At 49, the merger enabled him to do something that had been on his mind for some time--make a complete about-face in his professional life.

The decision was made easier for him because, as a corporate officer, he had the financial ability to reject the move to Atlanta. Under his contract, he will continue to be paid until March, 1989.

“I deliberately took time off to see what I wanted to do with my life,” he said not long ago. He said he is considering becoming a consultant to corporations in the legal area or doing corporate and political speech writing.

“I think, by and large, Delta handled the merger well,” he says. “A lot of my friends chose not to go, but very few have had remorse about the decision.”

One former Western executive, who did not want to be identified, said he has kept in touch with colleagues who moved to Atlanta to take executive-level jobs.

“We all recognized that similar slots would not be available to executives if they remained with Delta,” he said. “Most of the management people who went to Delta did not get the same authority and responsibility. They all ended up subordinate to their Delta counterparts. And that is exactly what we expected.”

But one aspect of the merger has triggered an angry controversy between Delta and some former Western employees who rejected jobs with Delta. It involves whether these employees, having received severance pay, still qualify for California unemployment insurance.

Delta Disputes Claims

In a memo to employees, Delta maintained that “under the Labor Protective Provisions, Delta has no obligation to provide severance to personnel who decline transfers to comparable positions in other cities.”

But the airline said that, nevertheless, it would pay the severance, ranging from two weeks’ pay for workers with less than a year’s service up to 15 weeks’ pay for those who had worked for Western for 12 years or more.

Some Western employees, having collected their severance pay, also applied for unemployment compensation. They received such payouts until Delta objected. A company’s unemployment tax liability is affected by the payment of such claims.

“Delta claims that it made a bona fide job offer and these employees chose severance pay in lieu of relocation,” Richard Jones, a company spokesman said. “Thus, they are ineligible for consideration for unemployment insurance.”

Delta refused to say how many workers had applied for the unemployment insurance. One who did was Joseph Simmons, a sheet metal mechanic for Western for 15 years, who refused a job with Delta, collected $6,000 in severance pay and then put in for unemployment insurance, claiming that he had been forced to leave his job in Los Angeles.

Before getting a job in the sheet metal department of TRW in Redondo Beach, he had collected 10 weeks of unemployment insurance at $166 a week. On Jan. 13, a hearing was held on the matter before an administrative law judge of the California Unemployment Insurance Appeals Board. Simmons is awaiting the decision.

Better Jobs for Some

For some Western employees who decided to stay behind in Los Angeles, the merger was a blessing in disguise. Unwilling to make the move, they ended up with much better jobs than those they had.

Glenn Bozarth had been Western’s director of public relations and was offered a comparable job with Delta. After announcement of the merger but before he had to make his decision, he was offered a public relations job with the hotel chain Hilton International.

“This a worldwide organization,” he said. “My job is broader in scope. Western was very regional. And I am getting paid more--and I was able to stay in Los Angeles.”

Lynne Centofanti, who started her career with Western as a temporary summer worker, was with the airline for 19 years and was manager of personnel at the time of the merger. She said she went for about three months without a job, turning down several before accepting her present post as regional director of human resources for Trust House Forte, a British-based international hotel chain. She said her pay is 30% higher than it was when she left Western.