UAL board balks at reorganization plan offered by Tilton


Aug 27, 2002
Well this would appear to be a vote of no confidence in Tilton and - by association - Hacker and Brace.
This is good news for labor. Hopefully the BOD getting active will bring the type of collaboration labor says is missing.
UAL board balks at reorganization plan offered by Tilton
Members to take an active role in developing it

By John Schmeltzer
Tribune staff reporter
Published January 31, 2003
The board of United Airlines' parent, while agreeing the airline needs to be fundamentally changed, failed Thursday to back a plan that its unions charge would cause a breakup of the carrier, said sources close to the board.
UAL Corp.'s board directed Glenn Tilton, chairman and chief executive, and airline management to pursue further detail and analysis of the plan's strategic initiatives, according to a company statement.
Rather than counting on the management team to develop the plan alone, the board said it will be fully engaged in the development of the plan ... as the company continues its dialogue with it unions, the creditors committee and other constituent groups.
Joseph Schwieterman, an airline expert and the director of the Chaddick Institute for Metropolitan Development at DePaul University, said, It's obvious that a consensus won't emerge about a strategic plan any time soon.
Schwieterman, who has closely followed United's situation, said that the board appears to have decided that it needs to immerse [itself] in the development of a plan to buy labor peace.
Disclosure this week of plans to create a discount airline within United, staffed by lower-paid employees, enraged pilots and flight attendants.
United has said that it believes that a low-cost carrier, fully integrated into a global hub-and-spoke network for the first time, will be a critical ... element in United's future strength.
The world's second-largest airline filed for bankruptcy protection from creditors on Dec. 9.
Greg Davidowitch, president of the flight attendants union, said in a letter Thursday to his 24,000 members that it appears that management has begun presenting bits of a `trendy' strategy for our airline in the media. And their version of this trendy strategy could not be worse.
Noting that the plan calls for the transfer of 20 percent to 40 percent of United's operations to either the new discount airline or to United's commuter partners, Davidowitch said flight attendants will not support current management's attempt at a partial liquidation of our airline.
We will actively fight any attempt to break up our carrier and destroy more flight attendant jobs--and our lives--by the thousands.
Copyright © 2003, Chicago Tribune
Good news for labor?? You're not serious!

Sounds like you approve of this "no confidence" vote in Tilton & crew. Isn't this the same board who hired the guy (and Creighton and Goodwin) and they're still playing games! This is the same board who oversaw the long spiral into bankruptcy and is now still resisting any change in the status quo.

No matter, very soon the BK judge and creditors will dismiss this board. This is inevitable. Until today I thought UA had a chance to avoid Ch7 but sadly it is over. UA has argued itself into oblivion.
You UAL folks better play nice or the BOD might just invite Dave Siegal over after he done with U. "Labor friendly" Dave is becoming the "darling" of the business world with his quick BK recovery and will probably be looking for a new challenge. Since leaving CO Express in '99, U is his 4th job, he became U CEO on march '02 and is due for another move. Good Luck!
mr. hell - it's about as good as news you're going to get for now.

for the past two days, all the talk was about how the plan was to spin off routes, planes, and crews to start a new low fare unit. you saw how the unions reacted.

so the BOD has rejected the plan. how is that not good news for labor? i agree the situation continues to suck, but take some developments as good for your cause.

while you may not like the BOD - their involvement at least helps temper senior management.

i never said I approve of a no confidence vote in senior management - that was simply an observation one could conclude reading the article.

CH7 is not a forgone conclusion, so lets not get all "resigned" to that outcome.

The problem here is that the union thinks that they can control the outcome of the airline. You are along for a ride sir!!

Althought the board is trying to appease labor ( they known there is a fine line to walk), they will eventually do what they need to regardless of what ALPA or the IAM or any other union wants.

The BK judge has his hands on your cajones and he will be the one who deceides how hard to squeeze.
I agree borescope.

In creating this post - I wasn't taking sides either way. I was just introducing a new topic and made an observation.

There's an extreme fine line to be walked...
This BOD will not initiate or approve anything unless an outside force makes 'em do it.

How much longer do you think UA's creditors will tolerate labor's folly that they still control the company? Especially when no forward progress is evident!

Let's suppose for a moment that you are a creditor (not a 'stakeholder', but a secured creditor):

would you trust this BOD with your money?
It's about time the board of directors(especially labor representatives) started doing their job. They should've started looking out for the interest of the employee's and what's best for the company back when the US Air buyout was presented to them. Way to go BOD's, veto management's proposals if it doesn't make good business sense. Look's like you(BOD's) finally learned your lessons.