Name: Insights: Delta CEO Explains Why Company Cut Ties With the NRA
Uploaded: 2020-01-14
Duration: 4 min 56 s
Description: The move cost Delta $40 million in tax exemptions. (June 2018)

[MUSIC PLAYING] When I turned 13, I got my first shotgun. It was a rite of passage. It was considered part of a moral upbringing. You're in a city and in a state where the people see the NRA as having protected that right for years and years and years. And yet, you made the decision to end your relationship with that organization. Why did you do it? Well, we're in counter to the values mentioned. I was watching your opening remarks here and read some of what you wrote this morning. Because I did read your little daily this morning. You do it every morning, right? Most mornings. OK. I try to do it every morning. And you know what? At Delta, our values are everything. It's the culture of the company. It allows us to be who we are. We've got 85,000 employees around the world that want to know what we stand for. And when we saw the divisive rhetoric coming out of the NRA following the shootings, and honestly, I did not even know we had it because it's a relatively modest small little discount program that we had with the NRA. But any implied endorsement that anyone could ever attach Delta to, to the NRA, we couldn't be part of it at that point. We had to stand and take notice. We were not the only ones. A number of other companies did the same thing. Did you talk to your board? Not in advance of the decision. You didn't. I did not. Did you get any pushback from the board? No. No. The board read about it as everyone else did that next morning, as soon as we made the decision. And the sparks started flying. And no one said, hey, we have a lot of people who fly this airline who are members of the NRA? Yeah, well, we knew that. And we've got a lot of people that were also offended by the comments of the NRA, many, many more that were offended than were actually advocates of it. I did have a couple of board members wonder why I felt the need to move as quickly as we did, as soon as we found out that we had this little discount program, which we had for thousands of organizations. It's not a big, big discount program. I told them that that ran so counter to who we are, that the decision to make it-- and we knew there was going to be potential backlash. The decision to make it to me was crystal clear. Did you have to scrub your list of other organizations that you have to see if there were other organizations that you might not feel comfortable with? We have, and we've ended some relationships as a result as well. Two, three, 10, 15? Nope. Nope. Not giving any-- Orders of magnitude. I mean, it's-- Giving a breadbox. Yeah, I mean, it's probably about 20. About 20. But we're not going to about who they are. Yeah, but that's very interesting. So that suggests that that exercise had never been done before. Not at that level. Not at that level. It put another screen on top of what we view to be just a simple-- and it was just going to their national convention. It wasn't that they could travel on their own personal time, just as a rite of being an NRA member. That's just the opportunity to go to one convention. But that's a pretty clear piece of evidence that you're holding the organization to a higher standard than it has been held to in the past. No question about it. And our people demanded it. There was a point during that process that people were not certain why we made the decision when we did. Because we had-- the state legislature came out. It was certainly it was the lead story in Atlanta for about 10 days. It led to questions whether Delta is even going to stay in Atlanta headquartered there, which-- Was that ever an issue? Never an issue. Never an issue. And I moved to dismiss it quickly. But you did have this tax issue pending before the state legislature. Can you talk a little bit about that? Sure, there is a $40 million exemption that the state had already approved to-- and by the way, it wasn't just Delta. It was all the airlines operating out of Hartsfield-Jackson in Atlanta to eliminate fuel taxes. And we're the biggest beneficiary, $40 million a year of those savings. And as soon as we made the decision to end the discount, the NRA members of the state legislature were up in arms. Which is most of the state legislature. Which is most of the state legislature. And they said that publicly if we did not drop our opposition to the NRA and that modest discount program, that they were going to eliminate the tax benefit that we were ready to receive. And we said, well, if that's the decision you take, you take that decision. But we were not going to be moved by it. So at a minimum, leaving aside whether it's affected bookings or anything like that, at a minimum, you lost $40 million. $40 million a year. And how do you justify that to your investors? Well, from an investor standpoint, the most important asset we got on our balance sheet is our culture and our values. And I think that's a modest investment in the culture of the business. 

Insights: Delta CEO Explains Why Company Cut Ties With the NRA

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The move cost Delta $40 million in tax exemptions.

Delta CEO Explains Why Company Cut Ties With the NRA

The move cost Delta $40 million in tax exemptions. (June 2018)

When I turned 13 I got my first shotgun. It was a rite of passage. It was considered part of a moral upbringing. You're in a city and in a state where the people see the n r. A. Is having protected that right for years and years and years. And yet you made the decision to end your relationship with that organization. Why did you do it? Well, ran counter to the values mentioned. I was watching your opening remarks here and read some of what you wrote this morning. I did read your little daily this morning. You do it every morning, right? Most mornings. Okay. I tried to do it. Everyone, Uh and, um, you know what Delta you are. Our values are everything. It's the culture of the company that allows us to be who we are. We've got 85,000 employees around the world that want to know what we stand for. And when we saw the divisive rhetoric coming out of the Honore following the shootings, and honestly, I did not even know we had a relatively modest small little discount program that we had with the Honore. But any implied endorsement that anyone could ever attached Delta two to the NRA. We couldn't be part of it. At that point, we had to stand and take notice. We were not the only ones. Number of other companies did the same thing. Did you talk to your board? Uh, not in advance of the decision. You didn't. Did you get any pushback from the board? No, no. The board, The board read about it as a CZ. Everyone else did that next morning. I made the decision in the The Sparks started flying, and no one said, Hey, you know, we have We have a lot of people who fly this airlines who are members of the N R A. Yeah, well, we knew that. And we've got a lot of people that were also offended by the comments of the of the NRA. Many, many more that were offended. Them were actually advocates of it. I did have a couple of board members. You wonder why I felt the need to move as quickly as we did as soon as we found out that we had this little discount from which we have for thousands of organizations. It's not a big, big discount program. I told him that that was ever and so counter to who we are That the decision to make it and we knew there was gonna be potential backlash. The decision to make it to me. It was crystal clear. Did you have to scrub your list of other organizations that you have to see if there were other organizations that you might not feel comfortable with? We have, and we've ended some relationships as a result as well. 23 10. Nothing in order to the bank and food. I mean, it stayed in the breadbox. Yeah. I mean, it's probably about 20 about 20 but we're not gonna talk about who they are. Yeah, but that's very interesting. So that suggests that that exercise had never been done before. Not at that level, not at that level. Put it another screen on top of what we view to be just a simple it was just going to their national convention. It wasn't that they could travel on their own personal time, just as a rite of being an honorary member. That's just the opportunity to go to one convention, But that's a pretty clear piece of evidence that you're holding the organization to a higher standard than it has been held to in the past. No question about it on our people demanded. You know, there was a There was a point during that process that people were not certain why we made the decision when we did, because we had the state Legislature came out. It certainly was the lead story. Atlanta for about 10 days led to questions whether Delta is even gonna stay in Atlanta headquarter there. Which was that ever an issue. Never initial. Never an issue when I move to dismiss it quickly. But you did have this tax issue pending before the state Legislature. Can you talk a little bit about that? Sir? There is a $40 million exemption that the state had already approved. Thio. It was, by the way, wasn't just dealt. It was all the airlines operating out of Hartsfield Jackson in Atlanta. Thio eliminate fuel taxes and we're the biggest beneficiary. $40 million a year of those savings. And when the soon as we made the decision to end the discount, the NRA members of the state legislature were up in arms, which is most of which is most of most of the state Legislature. And they said that publicly, if we did not drop our opposition to the N. R. A. And that modest discount program, that they were going to eliminate the tax benefit that we were ready to receive and we said, Well, that's that's the decision you take. You take that decision but way we're not gonna be moved by. So at a minimum, leaving aside whether it's affected bookings or anything like that. At a minimum, you lost $40 million.40 million dollars Here, uh, and and how do you justify that to your investors? Well, from A from an investor's standpoint, the most important asset we got our balance sheet is, is our culture and our values, and I think that's a modest investment in the culture of the business.