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Delta Under Pressure

Black leaders unhappy about Delta Air Lines’ diversity

Black leaders unhappy about Delta Air Lines’ diversity
By bizjournals.com | May 10, 2009

Top Atlanta civil rights leaders are voicing concern about Delta Air Lines Inc.’s commitment to diversity — be it in the number of executives, directors, suppliers, pilots or the overall workforce.

For the past several months, civil rights leaders have been meeting with the top executives of Delta — Richard Anderson, its CEO; Steve Gorman, the chief operating officer; and Michael Campbell, executive vice president of human resources and labor relations — to discuss their concerns.

Delta officials say increasing diversity within its ranks and in procurement is one of its CEO’s top priorities given the company’s status as a global airline. Nearly half of all new executives hired from outside Delta since Anderson took over are women and minorities, officials said, and Delta also pointed to deeds in the community, including its recent $1 million scholarship endowment at Morehouse College.

The African-American leaders meeting with Delta include the Rev. Joseph Lowery, head of the Georgia Coalition for the People’s Agenda; the Rev. James Milner, senior pastor of the Chapel of Christian Love Baptist Church; and Joe Beasley, president of the African Ascension and human resources director at Antioch Baptist Church North.

They are unhappy with what they say is the lack of progress to make the airline more diverse.

“There’s a lot of disappointment in the African-American community,” Milner said. “I know they can do better. They need to do better in all areas.”

In a telephone interview on May 5, Gorman said diversity is one of Anderson’s top priorities and an area where the CEO wants “to continue to improve and raise the bar.”

Gorman, who heads the carrier’s diversity council, said the airline looks at diversity from a global viewpoint.

“Now with Delta’s merger with Northwest we are the largest global airline in the world, six continents, 66 countries, so at the highest level we have a very diverse customer group, probably more diverse than any airline in the world,” Gorman said. “We are in a lot of diverse communities and so ... the diversity of our customers in the community, as well as our diversity of suppliers it’s good business and it’s very much related to the overall direction of the company from a diversity standpoint.”

But the civil rights leaders are more interested in seeing results rather than hearing about the airline’s intentions.

“The proof of the pudding is in the pie. Either you’re doing it or you’re not doing it,” Beasley said. “Delta has let us down, but we are willing to work with them. We want to help Delta be all that they can be. There’s no question that they’ve slipped tremendously.”

Specifically, Beasley said there’s been a decline in the number of black vice presidents working at the airline. Currently, there are two African-American vice presidents at Delta, but no senior or executive vice president. Delta’s top leadership team is composed of nine white men and one white female.

Milner said the airline also should increase the number of ethnic, black and women pilots, as well as business with minority suppliers.

“I really believe Richard Anderson’s intention is to rectify all of this,” Milner said. “They’re a little slow on this. I’m not satisfied with the rate they are moving.”

Lowery, who commended Delta for endowing a $1 million scholarship in his name at Morehouse College, also is looking for more diversity at the airline.

“Richard has set in motion a few things that we hope will pan out,” Lowery said. “They need someone in diversity who is aggressive.”

Currently Delta is without a manager of corporate supplier diversity. Valerie Nesbitt, who had been at Delta for a decade, took the carrier’s voluntary buyout package and left at the end of last month. At first, several in the African-American business community were told that the airline was eliminating its diversity office, but Delta has posted the job.

“There is no change of direction there,” Gorman said. “If anything we’re ratcheting up the value that that position could bring.”

Delta spokesman Ed Stewart said seven of 15 external new hires in the senior ranks (or 47 percent) since Anderson took the reins as CEO in September 2007 have been candidates with diverse backgrounds. Stewart said the airline’s executive ranks have become more diverse since its merger with Northwest.

The carrier did not break down those hires by ethnicity.

Stewart said in an e-mail the carrier’s diversity council, instituted last year to develop and retain diverse talent and boost minority procurement, “has already built important momentum in making diversity a top priority at Delta.”

But Beasley said the airline has a long way to go. After meeting with the Delta executives, Beasley sent Campbell a letter on April 21 to reinforce “a number of concerns that have been brought to our attention by your employees and members of the community.”

Beasley then said Delta had an “abysmal record” in providing equal opportunity to African-American vendors.

Delta did not provide a breakdown of the amount of business it does with various ethnic and minority groups, saying “as a global airline Delta views and tracks diversity broadly,” with all minority and women vendors combined in one group.

According to Delta, in 2008 the airline spent a total of $213 million, or 10 percent, of its flexible supplier budget with female and minority suppliers. That number is up from $207 million in 2007.

But longtime Atlanta businessman Tommy Dortch showed Atlanta Business Chronicle a document he said came from inside Delta that showed a breakdown by ethnic groups.

In 2007, according to the document, the airline spent $28 million with Asian-American-owned firms; $26 million with Hispanic-owned firms; $21 million with African-American firms; and $200,000 with Native American-owned firms.

For the first eight months of 2008, the airline only spent $12 million with African-American suppliers; $20 million with Hispanic-owned firms; $18 million with Asian-American-owned firms and $1 million with Native Americans.

Stewart confirmed the document is internal to Delta.

“If you are a global company and if you embrace diversity, you are going to do more than $12 million with the African-American community,” said Dortch, a past chair of the Atlanta Business League, founder of the Georgia Association of Minority Entrepreneurs, and chairman emeritus of 100 Black Men of America, an organization that he chaired for 10 years.

Dortch said he has been working behind the scenes with several top Atlanta corporations on their diversity initiatives. But he decided to go public with his disappointment with Delta because its record was so “blatant.”

“There needs to be a national spotlight on Delta,” said Dortch, who added that he’s already had conversations with national civil rights leaders.

Other areas of concern include Delta’s board. The only African-American currently on the board is Rodney Slater, a former U.S. secretary of transportation who came from the Northwest Airlines board.

Delta did have one African-American director, Walter Massey, the former president of Morehouse College. But Massey retired off the board last fall. In the past, Delta has had two high-profile African-American leaders on its board — former Atlanta Mayor Andrew Young and Jesse Hill Jr., retired CEO of Atlanta Life.

Dortch also provided a chart of the number and percent of black pilots at Delta and Northwest. Both airlines ranked at the bottom (Northwest had 58 black pilots or 1.12 percent; and Delta had 92 or 1.22 percent) of that list. By comparison all the other airlines in the chart had higher percentages: American (1.63 percent), Federal Express (2.68 percent), United Parcel Service Inc. (3.88 percent), Continental (3.48 percent), Southwest Airlines (2.18 percent) and United Airlines (3.42 percent).

Delta said in an e-mail that 4.65 percent of its pilots were minorities and women, but it did not break down those numbers.

Beasley said Delta can do better.

“I’m retired from the Air Force,” he said. “There were almost no black pilots when I joined, and the Air Force made an effort for inclusion. If Delta wanted to, it could hire more black pilots.”

When asked if being based in Atlanta, the cradle of the Civil Rights Movement, put more focus on the airline’s diversity record, Gorman said: “I think we’re very proud and we understand the important place we have as a corporate citizen in Atlanta. We have that same corporate citizenship in all the communities around the world.”

But Gorman also acknowledged there is room for improvement in Delta’s diversity initiatives.

“In my DNA as the chief operating officer, I am never happy with where we are in any of our operational statistics, whether it’s reliability, whether it’s cost or whatever,” he said. “Therefore my focus is always on improving where we’re at and continuing to raise the bar, getting better and improving. To me, as the head of the diversity council, and as the most senior officer responsible for supplier diversity I want to continue to improve and continue to get better.”

One thing is certain. Atlanta’s longtime civil rights leaders will be monitoring Delta’s diversity record.

“As much as I like Mr. Anderson, Mr. Gorman and Mr. Campbell, I’m concerned that Delta is not living up to its reputation or the expectation that people of this region have of Delta,” Beasley said.

And for Dortch, more is expected of Atlanta-based companies because of the rich tradition in the city for equal opportunity, not just for blacks, but women and all people of color.

“I look at this city as a city that sets the tone for this nation,” said Dortch, adding that as a homegrown company, Delta historically has tried to do the right thing. “It seems as though there’s been a cultural shift. The Northwest culture does not understand how we have existed in the South, working together and understanding that diversity is a strength.”

Delta’s diversity efforts

Delta says that as a global airline, it views and tracks diversity broadly. In 2007, the company’s female and minority spend was $207 million. In 2008 it increased to $213 million.

Since Richard Anderson became CEO in September 2007, Delta says, 47 percent of its external executive hires have been diverse candidates. Stated differently, seven out of the 15 external hires are diverse. Each of the external hires was selected based upon their superior qualifications for the particular officer or director-level position being filled, the company says. These positions are located within various divisions throughout the company.

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