Glenn Tilton new CEO?

DB Cooper

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Report: UAL to name top exec
Wall Street Journal says board picked Tilton
By Jennifer Waters, CBS.MarketWatch.com
Last Update: 5:39 PM ET Aug. 31, 2002


NEW YORK (CBS.MW) -- As it struggles to stay out of bankruptcy and placate distrustful unions, UAL is said to have filled its crucial chief executive position.

Glenn Tilton will be named chairman and chief executive officer as soon as Monday when the UAL board is scheduled to meet in Chicago, the Wall Street Journal reported Saturday on its Web site.
Tilton, who has no airline management experience, is presently vice chairman of the board at ChevronTexaco (CVX: news, chart, profile) and interim chairman at Dynegy (DYN: news, chart, profile), in which ChevronTexaco holds a stake.
Quoting sources close to the UAL decision, the Journal said Tilton, 54, was selected over John Walker, a UAL director who is chairman at Weirton Steel (WRTL: news, chart, profile), based on Tilton''s leadership skills.
Also vying for the position was John McDannel, a retired UAL pilot. McDannel was launching a grass-roots effort to grab the controls.
Tilton was chairman and CEO at Texaco before it merged with Chevron in October 2001. A spokesman at Chevron said the company does not comment on rumors or speculation.
Capt. Herb Hunter, chairman of the United Airlines pilots'' Master Executive Council, said he had not heard anything from the company about Tilton becoming CEO, but he saw any change as a positive step.
"We''re ready for someone to take a leadership role," he told CBS.MarketWatch.com.
United''s executive suite has been in disarray since James Goodwin was forced to leave as CEO last year. Jack Creighton, a retired Weyerhaeuser chairman and CEO, has worn those same hats at United on an interim basis. But Creighton on Sunday turns 70, the mandatory retirement age at UAL.
As part of a 1994 accord between UAL and its unions, employees own 55 percent of UAL shares. Board members of UAL include Paul Whiteford Jr., executive chairman of the Airline Pilots Association, and Stephen Canale, an officer in the machinists union.
The present executives would be expected to leave soon, the Journal said. Creighton announced in May that he would be leaving his posts. UAL President Rono Dutta and COO Andy Studdert would also step down, the Journal said..
It is likely that CFO Jake Brace, who was recently promoted, would stay in place.
Tilton would take over an airline that''s in deep schism with its unions amid attempts to gain a federal guarantee for a $1.8 billion loan. But the unions could look favorably on putting a fresh face in charge, as well as purging the existing management.
United Airlines'' flight attendants union on Friday rejected management''s proposed steps to slash costs by $9 billion over six years until a new top executive comes in with a recovery plan.
Echoing the position of the carrier''s unionized pilots and mechanics, the flight attendants took issue with the offer as the airline scrambles to qualify for the federal loan guarantee.

United parent UAL Corp. (UAL: news, chart, profile) has until Sept. 16 to resubmit its application with the Air Transportation Stabilization Board, whose aid it hopes would help it stave off filing for bankruptcy.
Though details haven''t been released, United''s emergency cost-savings plans include employee concessions that would wipe out $1.5 billion a year in wages and benefits, plus canceled or deferred raises. Management also is calling for other work-rule changes toward making as much as $2.5 billion in annual cuts.
In July, UAL reported a quarterly loss of $392 million, or $6.99 per share, sharply higher than the $292 million and $5.50 it lost in the year-ago period. Revenue nosedived 20 percent in the quarter to $3.8 billion.
United says that chopping out $2.5 billion in expenses a year "will better align costs with anticipated future revenues and increase the likelihood that the company will qualify" for its loan guarantee.
That''s an awful lot of money for a $1.8 billion backup, the flight attendants said. Like the pilots, the flight attendants suspect there''s an underlying motive.
"The math doesn''t add up," said union President Greg Davidowitch. "So, we ask again: Who''s using whom?
"Is United using the ATSB as its heavy to extract huge concessions from its workers to cover for years of mismanagement?" he added. "Or is the White House attempting to dictate what airline workers in this country earn through the ATSB? Both scenarios are un-American."
The union, which represents more than 26,000 United flight attendants, reiterated that it wouldn''t consider compromise without a viable plan and called for a new executive to replace Creighton.
"United management wants its employees to invest $9 billion of our hard-earned money in an airline with no plan and no leader," Davidowitch said. "While we continue to meet with the company, there will be no concession talks under these circumstances."
The pilots union, a much stronger force because of its 28 percent ownership position, took an even harsher stance, saying that the pricey request was "totally and wholly unacceptable."
In a parley unusual for United''s labor force, all three unions were scheduled to meet in the coming week to discuss the latest call for givebacks.
"We intend to work in conjunction with the other union leaders as we develop a response to the company''s latest proposal, and will forward it to management as soon as possible," the pilots union said Friday.
Ahead of the reported executive change, unions'' tough attitudes did not bode well for quick recovery, said analysts at Standard & Poor''s. The credit rating agency is keeping UAL''s debt rating on watch with "negative implications."
"The scale and complexity of reaching concessionary agreements in a short time, the unions'' initial very negative reaction, and United''s long history of difficult labor relations imply that a bankruptcy filing is more likely than not," said S&P analyst Philip Baggaley.
Investors took a negative stance too, lopping off another 6 percent from the stock''s price, which ended the session at $2.87. Amid ongoing discussions with the unions, investors crushed better than 35 percent of the stock''s value this past week.
Jennifer Waters is the Chicago bureau chief for CBS.MarketWatch.com.
 

flaptrack

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"Tilton was chairman and CEO at Texaco before it merged with Chevron in October 2001. A spokesman at Chevron said the company does not comment on rumors or speculation."

Hmmmmmm. Is not that the problem of United Airlines?

That all these CEO's tried to MERGE everyting?

Be afraid, be very afraid!
 

alexander37

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Aug 31, 2002
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MR tillton is flying into a hornets nest led by the vicious ALPA pilots of United Air lines. The UAL pilots previous MEC chairman said that he didnt give a dam where the UAL stock went. Now we have the ALPA spokesman Herb Hunter saying that the Give back UAL needs is too much> How could that be Hunter when you greedy B------- wrecked UAL in the summer of 2000.
I have a better idea for UAL, file for chapter 7 and throw all the greedy scum UAL pilots into the street and lets see the kind of salaries they will get. Maybe they will wear the phony alpa pin to the unemploynent line and get better treatment
 
Aug 20, 2002
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Valhalla
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Tilton must have the respect of the financial community. This fact alone would put him ahead of the other candidate. Also anyone from the current BOD should have been disqualified because this mess happened on their watch.

For that matter, the entire BOD should resign with the other company officers (yes, including the union reps) to allow a fresh perspective at the helm of this great company.

Everyone needs to pause for a moment (just a moment!) and gain their second wind for struggle ahead. Good luck!
 

Busdrvr

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Aug 20, 2002
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On 8/31/2002 11:22:29 PM

MR tillton is flying into a hornets nest led by the vicious ALPA pilots of United Air lines. The UAL pilots previous MEC chairman said that he didnt give a dam where the UAL stock went. Now we have the ALPA spokesman Herb Hunter saying that the Give back UAL needs is too much> How could that be Hunter when you greedy B------- wrecked UAL in the summer of 2000.
I have a better idea for UAL, file for chapter 7 and throw all the greedy scum UAL pilots into the street and lets see the kind of salaries they will get. Maybe they will wear the phony alpa pin to the unemploynent line and get better treatment
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Thanks for expressing you opinion of us "greedy" pilots. I'll remember that when I'm out serving my country (approx 80% of UAL pilots are veterans), protecting your rights to be a jerk. BTW, what do you do for income?
 

avek00

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Aug 28, 2002
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The simultaneous departure of Dutta and Studdert does not bode well for UAL's prospects of avoiding Chapter 11.

With the departure of everyone at the top, the next CEO will be at a severe loss vis-a-vis industry knowledge and an understanding of UAL's inner workings. United simply doesn't have time for the new guy (or gal) to take Airline Management and Economics 101 and United Airlines 451. While I firmly believe that Dutta, Studdert, and several others ultimately have to go, a sudden power and knowledge vacuum at the top is NOT going to help avoid a bankruptcy filing in the next 60 days...
 

Busdrvr

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Aug 20, 2002
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On 9/1/2002 12:46:14 AM

The simultaneous departure of Dutta and Studdert does not bode well for UAL's prospects of avoiding Chapter 11.

With the departure of everyone at the top, the next CEO will be at a severe loss vis-a-vis industry knowledge and an understanding of UAL's inner workings. United simply doesn't have time for the new guy (or gal) to take Airline Management and Economics 101 and United Airlines 451. While I firmly believe that Dutta, Studdert, and several others ultimately have to go, a sudden power and knowledge vacuum at the top is NOT going to help avoid a bankruptcy filing in the next 60 days...
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Where have you been. The simultaneous departure of Dutta and Studdart has been in the works for about 8 months now. The unions virtually DEMANDED it. With that in mind, their responsibilities have been "adjusted" for some time. Dutta gave up the day to day operation of the airline to brainstorm new and innovative ways to generate revenue (give me a break). If that isn't figure head ONLY, I don't know what is. If you read the rest of the article, you'll see that Jake Brace will likely be named COO. There is also a rumor that Greenwald will return as COB. Are they the only ones who know the combo to the Safe? The only ones with the keys to ORD? UAL has NOT made a strategic decision since 911. We have been waiting for the new team to come in. If anything, this will decrease the chances of a BK filling. I don't need Dutta to show me how to fly the jet, and likewise I think the rest of the employees can figure out how to do thier jobs with him gone. BTW, do you think that #@$@% Jerk Corzine believes the ATSB has overstepped it's mandate? Does he really believe that the gov deserves 1/3rd interest in UAL for a loan? Are you and him the prototype "new and improved labor friendly dems"?
 

MissAAmerican

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I have a better idea for UAL, file for chapter 7 and throw all the greedy scum UAL pilots into the street and lets see the kind of salaries they will get. Maybe they will wear the phony alpa pin to the unemploynent line and get better treatment
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Now that is an interesting concept! An airline without pilots! I think that would fix all your problems! Maybe the mechanics can taxi the passengers around for a couple of hours and then anounce an "on time arrival"? Whadda ya think?[;)]
 

GGpillow

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Aug 19, 2002
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This could open up previously unseen revenue for UAL. New hi-speed E+ service from Denver to Aurora via I225 Ohare to Elk Grove and after placing floats on all widebodies we could do "Across the Bay" service, SFO_OAK. I imagine Dutta has already looked at these revenue enhancing ideas though......... [:bigsmile:] [:bigsmile:] [:bigsmile:] [:bigsmile:] [:bigsmile:] [:bigsmile:]
 

G4G5

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Aug 21, 2002
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Could it be that Chevron is cutting bait? How many great CEO's have been set free by their aquiring companies? Do you want a guy with a history of sell it and leave?

Or
Could he be a truly excellent CEO that creates competition for the aquiring Chevron mgt? Is not knowing the airline business an advantage, could be?

Either way, is he better then what you have? Yes!

******************************************************************
Please don't waste your time reading the post below, the individual obviously has his/her own truly one sided opnions of who and what should be posted on this board. Either way it's a waste of time, skip it.
 
U

UAL24

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It is not important he has no inner understanding of UAL. He is being hired for his leadership. Jake Brace will become the new #2 and he does know the inner workings of the company so not much will change in those term in the short run. Apparently Brace and Creighton were the only two of theMgt team that wanted to avoid BK. Dudda and Studdert wanted to file at 4pm Sept 11 to get out from under the pilot contract and eliminate negotiations with the IAM. Dudda and Stuppert being gone is a very very very good thing no matter what happens to this company. Jake Brace will lead the charge on the negotiations while the new guy gets his footing. Where the new guy can be helpfull is recognizing the current proposals are unrealistic and potentially worse than anything we might get in BK. Don't have to be an airline insider to recognize a crapsandwich. He can give Jake new marching orders. However, anytime you bring a new mgt team into a struggling company they usually bring in sweeping and broad changes so everyone standby. It is interesting this will all be going down on Labor Day. Can't tell if it is a spit in the face again or some ridiculous symbology.

Please nobody respond to the flamer above. He obviously does not work here and is probably some teenage kid just trying to be a pain.
 

Ukridge

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Aug 27, 2002
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I would posit a differing opinion on the necessity of the new CEO to have airline experience. Though it would be an asset, I do not consider it imperative. Great leaders and captains of industry, law, military, and academia often have a singular skill in distilling problems down to their essential roots. Good solicitors (lawyers, no jokes please) often can do this. You describe a problem for 15 minutes and they can formulate a summary and a plan.
A good CEO will call in his senior executive staff and give them one hour to describe exactly what his/her division does, how it does it, how results are measured, how the employees are remunerated, and other pertinent topics. It may take a day or two but it can be done. Think about this for a moment. The CEO calls in his operations chief and asks him how the aircraft are being utilized, where, and what the yield is. He then calls in marketing and asks what the vision is for generating revenue. If an executive VP cannot adequately brief the CEO in one hour on the essence of his division, then he has no claim to being a senior VP.
A good CEO is very much like a three legged stool. The one side is technical expertise in running a major organization. The second is the knowledge of the capital community (lenders, Wall Street, the government, regulators) and the third is the intangible of setting the example and leading. It seems that those that have been running this business from the inside have not done a very good job so lets see if an outsider may have the requsite skill set.
Uk
 

Busdrvr

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I know when I prepared for my job interviews, I didn't want to be asked a simple question like "where do we have hubs", and look stupid, so I researched. I knew a bunch about UALs operations and before my Luv deal, I read "nuts". I would believe that at that level, the true professionals who were serious about the job had done a lot of the homework, and could without a doubt, tell the board more about the airline industry and UAL than the BOD knows (although that isn't saying much)
 

FrugalFlyer

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Aug 20, 2002
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On 9/1/2002 12:46:14 AM

The simultaneous departure of Dutta and Studdert does not bode well for UAL's prospects of avoiding Chapter 11.

With the departure of everyone at the top, the next CEO will be at a severe loss vis-a-vis industry knowledge and an understanding of UAL's inner workings. United simply doesn't have time for the new guy (or gal) to take Airline Management and Economics 101 and United Airlines 451. While I firmly believe that Dutta, Studdert, and several others ultimately have to go, a sudden power and knowledge vacuum at the top is NOT going to help avoid a bankruptcy filing in the next 60 days...
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The simultaneous departure of Dutta and Studdert and others may do UAL some good: addition by subtraction.

One thing is certain, the new CEO does have a huge challange, that is to stop the massive flow of red ink.
 

kiowa

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Aug 27, 2002
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alexander37

is that you --- John McCain??

very cute post. can't you find something constructive to do?