Siegel Tells Workers His Leaving Is Best For Us Ai

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Nov 11, 2003
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By Keith L. Alexander
Washington Post Staff Writer
Friday, April 23, 2004; Page E02


US Airways Group Inc.'s former president and chief executive David N. Siegel yesterday told a group of employees that he was sorry to leave the financially struggling airline, but knew it was the best option to help the carrier achieve its restructuring goals.

In his first meeting with workers since resigning Monday, Siegel was greeted by a round of applause when he entered the room.

"I didn't want to step down, but I wanted to do what was best for the company," Siegel said in remarks also available to some employees through a telephone link. "I hope my resignation would start the healing process with labor."

A major rift between US Airways' union leaders and Siegel threatened the carrier's efforts to secure concessions from workers.

Absent from the meeting was Bruce R. Lakefield, the former head of Lehman Brothers and US Airways director who succeeded Siegel.

Lakefield spent his first day as chief executive at the airline's Arlington headquarters moving into Siegel's former office and meeting employees, said David Castelveter, a US Airways spokesman.

Siegel, 42, praised Lakefield's "energy" and "new perspective" and said he will be working with Lakefield during the next few days as part of the transition. "As difficult it is for me to leave, I am committed to this company," he said. "I tried to put my money where my mouth is."

In an employee meeting last month, Siegel said he would see the airline through its restructuring. But in recent weeks, US Airways Chairman David G. Bronner became convinced that Siegel's continued presence would hamper the carrier's restructuring drive. By resigning before April 30, Siegel receives nearly $5 million under the terms of his severance package.

Siegel reiterated the need for the airline to reduce its costs to remain competitive with low-cost carriers and return to profitability. US Airways is trying to trim its costs by 25 percent by the summer. In a direct challenge, Southwest Airlines begins service next month out of Philadelphia, one of US Airways' largest hub airports.

Siegel said cost-cutting would require layoffs and some "sizable" reductions in pay and benefits. But he said some workers could be paid more if their productivity increases.

Siegel advised Lakefield to "enjoy" his honeymoon with the airline's labor union. When Siegel was named president and chief executive in March 2002, he was praised by labor officials as a leader with a fresh perspective.

Siegel said he did not have any immediate professional plans and said that he originally had hoped to stay in the Washington area until his daughter graduated from high school.

"I am going to miss everybody," Siegel said. "People left us for dead when I came and we resurrected ourselves. We've beaten tougher odds before and I know we can do it again."