I saw Jeff Smisek speak in SFO and I found him intelligent and he seemed sincere. I was wondering what people thought of him? I also read that Bethune hired Jeff to save the airline which he credits him of doing, just wondering how he managed to do this without pissing off the employees. Thanks for any info.
Im not sure that Gordo hired Jeffrey to save anything. All Continental management had to do was install a good accounting system and stop the managers, at every level from taking cash out of the company. Gordo Claims to have saved Continental. If that's the case I want some of the stuff he's been smoking.
Also, Lorenzo's, plan to sell the assets of the company, and taking a percentage of the sale as pay for doing "the deal," was taught to him by his professors at the Harvard School of Business. Simply following an old school model of self enrichment.
In addition Arthur Anderson would do anything you told them to do if you paid them enough. Which Frank did. Notice Arthur Anderson is no longer around. To many companies used AA and they finally went down, so did the companies they audited. It was really fun to look at the notes on bottom of the annual reports for Continental Airlines in the late 80's an early 90's. Wow, what creative BS. If you still have any go back and look at the notes. Incrdible, my accounting professors even laughed when i showed them. The FASB- Financial Accounting Standards Boards have still not recovered.
This is a perfect example of how stock holders are just a bunch of sheep. Hoping that whatever management tells them is going to happen, happens. Eternal hope = Eternal Stupidity.
So now we have the new Savior, Jeffrey S. Better know by some as Jeff Lorenzo.
He is simply an attorney following the precepts espoused by every business school in the nation. He is an attorney no more no less. He know's that the merger between UAL and CAL is frought with problems. First their is the matter of making money. Do you really believe that a company that had not made a profit in five years would be a good merger candidate? I mean if you ran Southwest Airlines would you want to merger with United? If you do I want some of the stuff your smoking.
Jeffrey is simply going to merge the companies, take his millions for doing the merger and be gone in a couple of years. So what's wrong with this? Nothing!
Why do I feel this way? Well its what I expect. Look did he create United or Continental airlines? No. Threrefore he has no emotional attachments. Guys that created the airlines back in the 30's an 40's had their heart and soul into their creations. They not only wanted to create something great they wanted it to grow. The guys now are just business managers, not creators. Once again the guys now are just managers. They don't care, if the airline gets better, they just want it to go on long enough to get their bonuses an Golden Parachutes. Do they exhibit any creativeness? I haven't seen any, for if they do that means they have to take a risk and they are loth to do that. I mean look at the sorry excuses for airlines we have in the USA today. This is simply a reflection of the people running them. The only one that takes ristks and grows is of course SouthWest.
And why did the airlines merger? Simply because too many people stood to make money from the transaction. Think of all the merger attorneys, bankers, accountants, executives that made millions from this deal. Once they made their money their gone. Those are the people who wanted this deal to go forward. In fact I believe they wanted it soooo badly they forced Larry Kellner out, he didn't want to do the deal, and put Jeffrey S. in his place. Would love it if Larry Kellner would write a book about his involvement with all this. Larry if you read this I still think you did the right thing.
Oh well, so what does the future hold for the new United. Depends. If the executives can some how run an airline properly then it might get by. Some examples of change might include, allowing some employee decision making instead of the crushing top down decision making that takes place. This is so old school and a real example to shareholders of why not to invest in this company. Any time you find this style of management expect very little profit and company shrinkage. This shows a real lack of creativity by upper management.
Some suggested improvements for the New United
Reducing the board of directors to five. Instead of thirty five parasites I mean directors. People just feeding at the trough.
Imagine using an abicus or a calculating machine to do the accounting in todays world. The pilots at continental still carry around 50lbs of wood in their Navigation Bags. This is so unproductive and has resulted in back injuries to many Continental pilots. When other airlines, and corporate pilots switched to EFB-Electronic flight Bags, AKA tablet computers five years ago, Continental still requires their pilots to carry fifty pounds of weight around with them where ever they go. Imagine that every flight that Contintental Airlines flies it carries and extra 50lbs of dead weight EVERYDAY! 1000 flights per day times 50lbs equals 50,000lbs carried by Continental airplanes everyday. Now multiply this times two because each pilot has to carry this weight and each airplane in their fleet carries two pilots 100,000lbs .
Now imagine, that it cost $1 per pound for each pound of weight they carry between say Alburque and Houston. So Continental is wasting, what $100,000 per day? Perfect. I only chose this example because the solution is so simple yet the company managers can't make a decision for fear of top down repraissl.
Lets see, what else deserves attention. I guess the use of excessive Prozac by employees. Of course this goes on at every business in America. So singling out this problem for the new United Stock holder is good for them.
Lets imagine that thirty percent of the flight Attendants at a major airline, could be American or Delta have a prescription for Prozac, or similar drug. It would be interesting to know exactly how many FA are taking these types of drugs. Oh and by the way it is not illegal to take these drugs while on duty. So say your company has 10,000 flight attendants and 20% use these drugs, that's 2000 flight attendants times $30 per month or $60,000 per month. Now some of the FA have a real need for these helpers. I mean if your post menopausal and have a grumpy disposition then I'm sure the passengers appreciate this employee benefit. But what about all the younger FA's that just want to feel happier? Do they take the drug simply because it was easy to get a prescription?
Oh well I bet if I look some more I think I could easily find some more examples of cost savings. But I'm sure the managers would not like me snooping around. They like their turf unexposed so to speak.
Ahh, isn't this modern jet travel marvelous! Hey how bout those weather delays?
Joe
