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Aug 20, 2002
Tilton has officially been named CEO![:praise:]
Dutta and Studdert are out! (stepping down)[:)] [:)] [:)]
"CHICAGO (AP) - United Airlines named veteran oil executive Glenn Tilton its new chairman and CEO on Monday, reaching outside the airline industry in its effort to keep the ailing carrier out of bankruptcy.
Tilton, 54, vice chairman of ChevronTexaco Corp. and acting chairman of energy marketer Dynegy Inc., was selected by unanimous vote of the board of United parent UAL Corp. during a special Labor Day conference call, the company said.
He replaces interim CEO Jack Creighton, who turned 70 on Sunday and had signaled his wish last May to retire.
As part of the switch, United announced that president Rono Dutta and chief operating officer Andy Studdert are stepping down. Both had been under fire from the company's unions for more than a year.
The company said their responsibilities will be assumed by other executives. Tilton also was given the title of president; United did not elaborate on other shifts.
Tilton arrives with United needing to take swift, urgent actions to steer it out of danger. The nation's No. 2 carrier has posted losses of nearly $3 billion in the past 18 months and has threatened to filed for Chapter 11 bankruptcy protection this fall if it can't cut costs dramatically and win a government loan guarantee.
Neither the company nor its new CEO addressed the possibility of bankruptcy in a four-page news release announcing his appointment. Tilton stressed the need for a ``genuine partnership'' between the airline and its unions and employees at the 55 percent worker-owned company.
``Our highest priorities must be to restore employee trust and revive investor and customer confidence,'' he said. ``That means working cooperatively with all of United's stakeholders on a plan to address near-term financial issues and develop a much-needed, long-term strategy for the company's renewed growth.''
Tilton last year was named chairman and chief executive officer of Texaco Inc., the nation's second-largest oil company, shortly before it was formally acquired by Chevron Corp. He was named to Dynegy's board in January and became interim CEO in May. San Francisco-based ChevronTexaco holds a 26.5 percent stake in Dynegy.
His previous posts included president of Texaco USA, president of Texaco Refining and Marketing and head of Texaco's Global Businesses unit.
The other finalist for the United job - John Walker, a UAL director and CEO of Weirton Steel Corp. - also has no experience running an airline. United had no luck attracting an industry veteran in its four-month search.
Creighton has earned the respect of United's unions but expressed no wish to extend his acting tenure. A UAL board member, he took the post last October when James Goodwin resigned under pressure.
Passenger advocate David Stempler called the hiring an important step for United in trying to resolve a long list of unresolved issues, including labor concessions, the loan guarantee program and a pending code-share with US Airways.
``I think there's been a cloud over United for a while in terms of who's in charge and who's going to lead them in the future, and this enables them to move forward,'' said Stempler, president of the Air Travelers Association.
Creighton, who had vowed not to preside over a bankruptcy filing, set a Sept. 16 deadline for unions to agree on $2.5 billion in annual cost cuts for the next six years, including $1.5 billion from the unions themselves.
The unions, which have two seats on the UAL board, oppose the severity of those proposed cuts but shelved those objections temporarily Monday in applauding the new appointment.
Pilot and board member Paul Whiteford said Tilton is a proven, creative leader with a reputation as a consensus-builder and a good listener.
``We look forward to joining with him and his management team in a productive partnership to find reasonable and responsible solutions,'' Whiteford said.
The second most powerful union at United, the International Association of Machinists and Aerospace Workers, was particularly enthusiastic about the shakeup that resulted in the departures of Dutta and Studdert.
``This is an opportunity for United's new CEO to put in place a team capable of managing a multibillion-dollar employee-owned company,'' said IAM president Tom Buffenbarger. ``The last team forgot that our members own the airline and that the employees are United Airlines' most valuable asset.''
Analyst Ray Neidl said that despite Tilton's lack of experience in the industry, his selection as CEO demonstrates United's preference to avoid bankruptcy rather than restructure under a federal court's protection.
``The guy comes from a company that's made money and has been successful, and he will try to impose that same attitude at United,'' said Neidl, of Blaylock & Co. ``But it's not going to work unless he gets union cooperation up front.'' "
What the heck is going to be so interesting? Deals will be made, some will lose money, some will lose jobs(hopefully management), and for the rest, status quo will be maintained[:(]
Things will get really interesting now. The AFA and IAM can no longer use the "we won't deal with a temporary CEO" excuse. Everything I've been able to find on Tilton shows him to be a very positive leader. However, it will be critical for him to fill Dutta and Studdert's positions with capable, airline-knowledgeable leaders in the coming weeks.
New CEO Appointed at UAL, Machinists are Hopeful

Washington, D.C., September 2, 2002 - "We are hopeful that a long-term CEO will bring stability to United Airlines," said Tom Buffenbarger, International President of the International Association of Machinists and Aerospace Workers (IAM) on the announcement that Glenn Tilton has been named the new Chief Executive Officer of UAL Corp. "Our representatives look forward to discussing new ideas to protect the interests of our members, the employee-owners of United Airlines."

"United Airlines' successful revival hinges on a leader with a far reaching vision of where the company should be and a plan to reach that goal," said General Vice President Robert Roach, Jr. "We hope Mr. Tilton can quickly assemble a management team capable of working with United's employees to address their concerns and the carrier’s problems."

"Our members have already made significant commitments to insure the survival and success of United Airlines," said Randy Canale, President of IAM District 141. "But long-term commitment from top level management has been missing. A new CEO is a giant step towards reaching our members' goals."

"Our members worked hard and sacrificed for eight years to make United Airlines the country’s number one carrier," said IAM District 141-M President Scotty Ford. "We need a CEO that can return the airline to that prominent position while improving labor relations and employee morale. We hope Mr. Tilton is that person."

UAL also announced today the resignations of UAL Corp. President Rono Dutta, and Executive Vice President and Chief Operating Officer Andrew Studdert. Machinists’ leaders hailed the announcement of additional management shakeups at UAL. "This is an opportunity for United’s new CEO to put in place a team capable of managing a multi-billion dollar employee owned company," said Buffenbarger. "The last team forgot that our members own the airline, and that the employees are United Airlines’ most valuable asset."

"United needs management that understands what employee ownership means. Only in a true partnership of ideas can United successfully return to being the number one carrier. Anyone who doesn’t believe that should also resign immediately," said Buffenbarger.

"Through the ESOP, our members gave United Airlines a competitive advantage for eight years," said Roach. "Their sacrifices made United the premier airline in the country. Recently, United management has indicated the company is on the brink of bankruptcy. Clearly the previous management failed. A change in top management was long overdue. This may be a step away from the wrong direction."

United's 23,000 Ramp & Stores, Food Service, Security Guards, Public Contact and Mileage Plus employees are represented by IAM District 141. The carriers 13,000 Mechanic and Related employees are members of IAM District 141-M. For more information about the Machinists Union visit


August 29, 2002
On 9/2/2002 9:51:51 PM

What the heck is going to be so interesting? Deals will be made, some will lose money, some will lose jobs(hopefully management), and for the rest, status quo will be maintained[:(]
Gee, what optimism![:(]

Some of you guys are really pathetic. Do you hate United THAT much?

Move on and get with the program, or get out of the way. It's time for UA to get back on it's feet and kick some a$$.
Some on this board are just chomping at the bit to make concessions of some kind.

For 777...AFA won't deal without a viable business plan, PART of which is a permanent CEO. We'll see how the rest pans out.

And you can bet we will never go for gutting our scope clause like ALPA almost did theirs (until they woke up). If the company expects us to sign away our future via our scope, using the AVALOR case to begin chipping it away (as past and now present ERP proposals contain), forget it, it ain't gonna happen, end of story. It sounds like IAM is of the same mind as well.

I'm glad ALPA got over their shortsightedness though.
Perhaps Chapter 7 can now be avoided - if the Unions will work withTilton.

Next the question will be asked how much is the CEO making. Then the employees will grouse about that "they won't make concessions until management makes concessions."
On 9/3/2002 1:40:24 AM

Next the question will be asked how much is the CEO making. Then the employees will grouse about that "they won't make concessions until management makes concessions."
Everyone knows that he will be extremely well paid. He would have to be to step into this mess. Even if he fails he will have earned his money for having the guts to at least give it a try.

With all due respect, the AFA wouldn't know a competent business plan if it hit them over the head. They continually show their collective ignorance by shrugging their shoulders and sticking their head in the sand in regards to chipping in to help fix UA's problems. Your union should try taking a consistently proactive role in helping turn this company around.

Chomping at the bit to give concessions? Hardly. I certainly don't want to give anything. But I'm smart enough to realize that concessions are INEVITABLE. Either you give them voluntarily, or the company gets them (and probably much worse) via bankruptcy. Like it or not, UA's costs are too high. The gravy train days are over for all of us. Either we recognize that fact and fix the problem or we allow this company to continue to bleed and shrink to its ultimate death. You can complain all you want about scope changes, but the company will get what they want one way or another. So you might as well try to negotiate it in a way that gives you some control over what is taken. If you're willing to take your chances in bankruptcy, you're naive to think you'd fair better.

mastermechanic and flaptrack,

Your whining, complaining, negative "we already gave" mantra is typical. That is the attitude that needs to be eradicated from UA. Why don't you try a dose of optimism for a change and give Tilton a chance. Simply painting him with the same brush of past failed UA CEO's shows your unwillingness to even support the leader of UA. It's far easier to take pot shots and criticize someone than it is to step up and be willing to fix what's wrong. Please stop covering the same old tired ground of what wrongs have been done to you in the past. We've all been wronged the last several years. Get over it. If you are not willing to help fix what's wrong now, than leave or I hope you are somehow terminated. Because your negative attitudes will only serve to poison those of us that want to see this company succeed and recognize that that won't happen without the collective help of ALL of us.
UAL777 I am totally with you on this one.

I had some initial optimism over the past few weeks that my colleagues (UAL F/As, and by extension, AFA) were finally "getting it." However the reaction I am seeing to last week's term sheet proposal is making me pessimistic once again that we will be able to pull together in time to avoid BK.

For the record, I view management's term sheet proposal of last week (28Aug) as a good starting point for negotiations (IF it also included an agreement like U's ALPA and AFA 1113 letters that more cuts will not be sought by management in a BK filing); and I think it divided up the pain fairly among all labor groups. The indications that I am getting however make me think we will ultimately as a group end up rejecting it outright, unfortunately-- I am hearing more and more that people honestly think we will do better letting a BK judge decide how much our pay will be cut.

And I agree with your point about AFA's reaction to a business plan (AFA saying "no negotiations until we see a business plan"). Though it is on the surface a wise move in some respects, in some ways it was more just an excuse to postpone making hard and serious decisions, as is the IAM's stance about "no negotiations until a permanent CEO is in place."

So now we have a "permanent" (whatever that means in this business) CEO in place. And he will probably unveil a "plan" shortly.

But you know what? The plan will (in the eyes of the Unions) most likely be terrible-- shrinking, cutbacks, layoffs, more RJs and Express flying, more condeshares, maybe a fleet grounding, city closures, etc. etc.

So THEN the Unions will probably say "Now we don't like or trust the CEO or his plan-- he just wants to cut jobs-- no negotiations, no concessions!"

Then what? (Though I think I know the answer to that question-- bankruptcy, and no ATSB loan guaranty. And then the "plan" will be implemented anyway, and it will be that much more painful for everyone.)

Even with the events at USAirways preceding ours by mere weeks or months, a lot of people at UAL are still not getting it.
Yes, the gravy train is over for the pilots, there never has been a gravy train for the flight attendants. I think most of us (flight attendants) who are serious about our futures here at UAL see the handwriting on the wall. But your insults about AFA are just wrong. We have a very strong scope clause that United is trying to eliminate. We won't deal on that. Your opinion doesn't matter.

The pilots went a long way to ruin this great airline in y2k, and indeed we lost many of our best customers. It is time for them to take responsibility and make it right. They seem collectively to understand that. It's called hysterical mass guilt. [:)] [:)]

Great post as usual. We need to get behind this guy and work with him. I will part company with you slightly on the level of concessions required. No details have been released on the ALPA agreement but the leaks seem to suggest enormous paycuts and complete outsourcing of narrowbody flying. The same can be said for the IAM. I will not defend Mastermechanic, he is a moron, but, the "TERM SHEET" as presented is nothing short of erradication of mechanics at UAL. Why would anyone voluntarily vote to get rid of their job for the good of the company and no future of them ever getting their job back? There are certainly things within the scope clause of ALPA and IAM that can be addressed but outright replacement is not one of them. Mechanics don't need to push airplanes back at our hubs. That would be a more reasonable giveback vice getting rid of UAL maintenance. We don't need incredibly well paid "bunkies" to monitor an autopilot and never fly an airplane. IRP's seems an appropriate giveback. Engineers never flew the plane and made a lot less then the flying pilots. They actually did more than 400 bunkies do.

Mr Tilton could make tremendous inroads with all labor here by removing those absurd Term Sheets from the table and come up with more realistic proposals. If short term cash is what we need to by time for more comprehensive renegotiations that could be done in less than a week. Most employees are willing to take straight paycuts to help. I am tired of all labor at UAL being labelled bull headed and incapable of grasping the severity of the situation at hand. Most of us fully understand the gravity of the situation. Most of us have been screaming for something to be done for the last year but to no avail. This battle will not be fought and won by us in the media. So we should all stop getting angry by their gross misrepresentations of us and our positions.

Mr Tilton has an opportunity to make corporate history here and we have an opportunity to contribute to that. If we file BK 1) AFA not much will change in the shortrun for you except large paycuts and loss of most benefits, eventually you will be replace by your southeast asia counterparts. 2) IAM you will just plain old become extinct. Contract maintenance and outsourcing overseas is a forgone conclusion. 3) ALPA will have more than RJ's shoved up our asses. We will watch our narrowbody aircraft and their titles be transferred over to Express carriers willing to work for peanuts. I don't think most us want these things to happen. LUV has managed to negotiate multiple contracts in the course of 2weeks. Each of these renegotiations has resulted in payscales for this "low cost carrier" being at or near current UAL payscales and definitely higher than our soon to be payscales. That tends to suggest our pay is not the problem but the business model is a problem. In other words a Management problem.

They have us by the short hairs. We can say go ahead and yank and try not to yelp to show them how tough we are or we can trim the pelt making it just long enough to keep us warm but not so long as to get a hold of. Don't ask people to go on a kamikazee mission for the good of managements empire. Give them something to fight for that means something to them.
I'm really excited about Tilton. Of course time will get ready for more ups and downs. I think they'll push the September 16 date back a bit. But...I just hope they don't take their eye of the urgency time-wise.

Glad to see that the unions are getting together tomorrow.

Don't forget...the press and anlysts don't get the inner workings of the airline industry and UA specifically. I read at least two analysts who have changed their tune three times from the initial warning of ch11.

It is a good start to fall at United...lets keep the faith.
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