Anderson to be named CEO of Delta

[~~~^~~~]

Hey fins, I told you I thought he could be our man.

Bye Bye--General Lee

You called it.

Guess this means the Delta campus isn't getting a Starbucks....

 

[lowecur]

Hopefully Whitehurst won't feel like Malally and leave Delta because he didn't get the job. He's one guy that we need to keep around and hopefully this won't cause him to leave. He's still 15 years younger than Anderson so maybe Whitehurst can be the next CEO or the next one after the next one.

Speculation is he's gone. The question is, where?

F9 just hired a new CEO. Jetblue has Dave. Maybe UAL? Someone will grab him, and it may just surprise us all where he sits at the end of this latest version of musical chairs. I wonder what Jetblue would pay to find out the inside workings of it's biggest headache?

imp:​

 

[Sedona16]

August 21, 2007
Dear Fellow Pilot,
This afternoon, Delta announced that its board of directors has selected Richard
Anderson to succeed Jerry Grinstein as Delta’s chief executive officer. Mr. Anderson is a
former-CEO of Northwest Airlines and most recently served as the executive vice
president of UnitedHealth Group Inc.
Delta’s board also announced the appointment of Ed Bastian to serve as Delta’s president
and chief financial officer.
Over the past week, I have met with Delta board chairman Daniel Carp and Mr.
Anderson. During conversations with each, we spoke at length about the importance of
management-labor relations in a company whose lifeblood is integrally tied to the level
of service provided to its customers. We discussed the poisonous atmosphere that has
often permeated management-labor relations in our industry and which continues to exist
at many airlines today.
In our conversations, I emphasized that during the latter stages of Delta’s bankruptcy and
subsequent exit from Chapter 11, we strived to develop a productive and professional
working relationship with Delta’s senior executives based on earned trust and mutual
respect. It is through that relationship that we have been able to negotiate a number of
letters of agreement that have been beneficial to the Delta pilots, and we have been able
to do so outside of the normal Section 6 process and without the contentious environment
that accompanied these types of negotiations in the past. I stressed my firm belief that
the health of our working relationship is crucial to the continued success of Delta Air
Lines.
Since Mr. Anderson was once the CEO of Northwest Airlines, media speculation is sure
to arise about industry consolidation and specifically, the potential merger of Delta and
Northwest. I addressed this specific topic with Mr. Anderson. While industry
consolidation has been predicted for some time and may eventually take place, Mr.
Anderson assured me that he was not selected as CEO to facilitate a merger between
Delta and Northwest or any other airline and that he believes Delta can grow and thrive
as an independent, standalone carrier.
Over the past two years, we have seen tremendous change in our profession and our
company. The selection of Mr. Anderson as Delta’s next CEO is the next milestone in
Delta’s rebirth. With this “changing of the guard” at the highest levels of our company, it
is only natural to view this development with concern and some degree of skepticism.
That said, my initial impression is that both Mr. Carp and Mr. Anderson share the vision
of a Delta Air Lines where management and labor can continue to build and promote a
professional and productive relationship in an industry that is well known for its constant
change and often destructive management-labor strife.
As a labor union, it is now more important than ever that we continue to develop and
pursue a policy of “engagement” with Delta’s senior executives. We will not standby
and watch our collective careers dissolve at the hands of others; we must participate in
any process that provides us with the ability to shape the direction of our company and
our careers. Labor and management have often had disagreements and differing goals,
and that will not change. In my view, the best way to successfully resolve those
differences is not through isolationism, but through active engagement at every step in
the process.
As Delta continues its transition, I commit that your MEC will continue its efforts toward
a professional and productive relationship with Delta’s new team of senior executives. I
encourage Mr. Anderson, Mr. Bastian and the entire Delta team of senior executive to
embrace the path of progress in management-labor relations that will be crucial if Delta
and its employees are to enjoy long-term success. I look forward to working with Mr.
Anderson and continuing to work with Mr. Bastian on behalf of the Delta pilots. But
while I am encouraged by my initial conversations with Delta’s chairman of the board
and its new chief executive officer, we must be mindful of the old Russian proverb
“​

Doveryay, no proveryay”—Trust but verify.
Fraternally,
Lee Moak, Chairman​

Delta MEC

 

[gutshotdraw]

Well liked at NWA? Where on earth did you hear that? He was certainly not well liked by the rank and file. Maybe the board or some other anti labor groups at NWA liked him.

After the joke that was Dasburg, Anderson was at least given nodding approval in this (now former) NWA household. In the light of the disaster that is Steenland, Anderson has looked better every day. Delta could have done much worse.

I'm just glad the better half won't have to worry about a screwjob of seniority integration that should be coming along sometime next year......

 

[Frank Lorenzo]

Anyone wanting any sort of merger or consolidation had better watch what they wish for.

One or more of these airlines could end up being broken up into pieces and sold off to "maximize shareholder value" and to assuage political resistance.

Parts of an airline (assets only) could be sold to another airline and the employees of the parsed out airline could be left in the unemployment line.

 

[~~~^~~~]

Never mind.

 

[Draginass]

If NW and DAL tried that, I wonder what AMR would try to do.

 

[~~~^~~~]

Jim Whitehurst obviously connected with many employees who were getting objective results. Delta has been trending in all the right directions - better service, better revenue, better morale and profitability. What is the message sent to those employees regarding hard work and loyalty to Delta?

IMHO Whitehurst was a much better pick. The fact that he is not mentioned in the PR and wasn't talked to by Anderson does not give a positive indication regarding his future role.

How could anyone familiar with UHC's performance and NWA's performance see this was a good thing?

...and Delta's board expects different results, why? From the bleachers this looks like board room cronyism. Not the best for Delta Air Lines, again. Someone please tell me why I'm wrong.

 

[michael707767]

IMHO Whitehurst was a much better pick. The fact that he is not mentioned in the PR and wasn't talked to by Anderson does not give a positive indication regarding his future role....... someone tell me why I'm wrong, please.

You're not. Whitehurst was the better pick, and the BOD dropped the ball. No other way to put it.

I hope we don't lose Mr. Whitehurst, but I fear we will. He deserves better.

 

[T-Bags]

You're not. Whitehurst was the better pick, and the BOD dropped the ball. No other way to put it.

I hope we don't lose Mr. Whitehurst, but I fear we will. He deserves better.

Too bad UAL won't make a play for him. He doesn't meet the qualifications. Unlike many of UAL's execs, he apparently HAS a Masters degree and can turn a profit without the lowest payrates in the industry... Stupid Whitehurst!!

 

[General Lee]

You're not. Whitehurst was the better pick, and the BOD dropped the ball. No other way to put it.

I hope we don't lose Mr. Whitehurst, but I fear we will. He deserves better.

I liked Whitehurst too, but he was a relative unknown outside of Delta. I hope he doesn't go, and keeps his COO position, but I don't know if he will.

Bye Bye--General Lee

 

[jetflier]

Incoming Delta CEO says no plan for Northwest deal

Tue Aug 21, 2007 5:02PM EDT

NEW YORK, Aug 21 (Reuters) - The incoming chief executive of Delta Air Lines Inc (DAL.N: Quote, Profile, Research) said on Tuesday there were "no plans or intentions" to merge Delta with rival Northwest Airlines Corp (NWA.N: Quote, Profile, Research).
Richard Anderson, who was named as Delta's next chief executive earlier on Tuesday, made the comments on a conference call with reporters after being named as the successor to Gerald Grinstein, who retires on Sept. 1.
The appointment of Anderson, a former CEO of Northwest, fanned speculation from earlier this year that the two airlines, which emerged from bankruptcy a few months ago, might merge.




Bye Bye--General Lee

Hi General,

Yup ! IMHO this was cast in stone when Dal and Nwa entered CH 11 procedings,...it's just begining
to play out.

Me thinks that "Richard" was our favorite CEO at NWA. He certainly steered us in the right direction after Sept 11...He is also remembered for his carisamatic relationship with the employees. "pelase call me Richard " was his normal response to a hello.

Soooo, I think that I either have to dust off my hat or start sewing a second set of buttons on my blazer.

See ya...

 

[ExAF]

Follow the Cash

For the record the President of UHC has made a lot of money. He has made billions for its investors. It makes a lot more money than you think.

You are correct; however, I think the point is that he (Anderson) isn't leaving UHC for the money, he is making a lot there. He definitely made more there than at NWA.

 

[~~~^~~~]

Calyon Securities upgrades Neutral to Add. Calyon upgrades DAL to Add from Neutral on valuation. The firm believes that at the naming of Mr. Anderson to the post and the elevation of the CFO, Ed Bastian, to President means that DAL is seriously preparing for industry consolidation and this should excite the markets over the coming days. They do not believe, however, that there will be any immediate deal. Nonetheless, firm says this move should make the industry exciting this fall. They say the question is not if DAL wants consolidation, but will they be a buyer or a seller; they believe DAL is better suited as a seller. Firm says DAL's system would fit very well with network carriers such as NWA, UAUA, particularly due to their strong Pacific operations.

 

[GogglesPisano]

Whitehurt came in and talked to our newhire class. He struck me as an extremely sharp, focused, and talented individual. He gave concise answers and displayed remarkable clarity if thought. The Harvard MBA probably helped.

I thought for sure he would be picked.

 

[gutshotdraw]

Calyon Securities upgrades Neutral to Add. Calyon upgrades DAL to Add from Neutral on valuation. The firm believes that at the naming of Mr. Anderson to the post and the elevation of the CFO, Ed Bastian, to President means that DAL is seriously preparing for industry consolidation and this should excite the markets over the coming days. They do not believe, however, that there will be any immediate deal. Nonetheless, firm says this move should make the industry exciting this fall. They say the question is not if DAL wants consolidation, but will they be a buyer or a seller; they believe DAL is better suited as a seller. Firm says DAL's system would fit very well with network carriers such as NWA, UAUA, particularly due to their strong Pacific operations.

Could the fact that the Northwest name must remain on the airplanes to continue the landing rights in Japan mean Delta would be the seller and Northwest the buyer? Hmmmmm

 

[RJAA]

Could the fact that the Northwest name must remain on the airplanes to continue the landing rights in Japan mean Delta would be the seller and Northwest the buyer? Hmmmmm

Not really, United acquired Pam Am's NRT rights in the 80s. Sell it to DL and DL buys NW or transfer the rights straight up.

 

[General Lee]

Could the fact that the Northwest name must remain on the airplanes to continue the landing rights in Japan mean Delta would be the seller and Northwest the buyer? Hmmmmm

Ummm no. IF the two did merge, a part of each name would be on the new name. Delta would bring the word "Delta" and Northwest would bring the word "Airlines." The combination, you see, would be "Delta Airlines." Anyway, I don't think there will a merger between the two, and Delta has it's own Asian expansion plans already.

Bye Bye--General Lee

 

[~~~^~~~]

http://www.cnbc.com/id/20390135

 

[get2flyin]

Maybe both the Northwest and Delta MECs should sit down with their respective pilot groups and start talking about the definition of final and binding. Just a thought.

 

[GogglesPisano]

http://www.cnbc.com/id/20390135

A very, very informative interview. Anyone who has a vested interest should watch it.

 

[General Lee]

In an e-mail response to a query from BusinessWeek, Whitehurst said, "I want to assure you that I have NOT resigned and have no intention of resigning."


Let's hope he sticks around, but you never know.

I liked that CNBC video Fins brought up, but Anderson couldn't go into major details. He sounds like a good businessman who hopefully will keep Whitehurst around for a go between to the employees. That would be smart IMO. But, we don't want another Leo Mullin who could have been a good CFO but lacked leasership skills. I think Anderson will be more active than Leo but not as communicative as Jerry. We'll see I guess.

Bye Bye--General Lee

Delta's New Top Pilot a Surprise
The airline taps ex-Northwest chief Richard Anderson as its new CEO, spurning retiring Gerald Grinstein's picks and fueling merger chatter

by Dean Foust

When US Airways Group (LCC) shocked Delta Air Lines (DAL) with a hostile bid last year—just as the Atlanta-based carrier was working its way out of a wrenching bankruptcy—Delta's creditors were jubilant. With US Airways offering those creditors a hefty 25% premium to where Delta's debt was trading at the time, most would have recouped a big chunk of their losses.

But when Delta's management team, led by Chief Executive Officer Gerald Grinstein, dug in against US Airways' bid and cut many unsecured creditors out of the vote, many of those stakeholders were furious. Now, with Delta out of bankruptcy, and those creditors controlling Delta's reconstituted board, they finally extracted their revenge when the airline named its new CEO Aug. 21. While Grinstein, 75, had publicly lobbied for one of his two top lieutenants to succeed him following his retirement this summer, Delta's new board spurned his wishes, picking former Northwest Airlines (NWA) CEO Richard Anderson, himself a member of the new board, as its new chief executive.
Simmering Resentment

While Anderson arrives with sterling credentials—as Northwest CEO he pared back the airline's cost structure while fending off challenges to its Heartland stronghold—his appointment is nonetheless taken by a number of Delta watchers as a clear sign that the creditors are calling the shots at the nation's third-largest carrier.

Anderson's appointment also raises speculation that, with an outsider at the helm, Delta may reverse its "go it alone" strategy and pursue a merger with either United Airlines (UAUA), Continental Airlines (CAL), or Anderson's former employer, Northwest, with whom Delta held exploratory talks during bankruptcy. What's more, since Northwest left bankruptcy May 31, the carrier has been beset by horrendous relations with its employees, who are angry over deep pay cuts and executive compensation. The airline was forced to cancel dozens of flights in June and July after pilots began calling in sick, hurting profits and boosting the pressure on CEO Doug Steenland.

Delta management "really did give creditors the middle finger when they turned down US Air's bid, and I think there was some residual resentment among the creditors," says Roger King, senior analyst for CreditSights, an institutional research firm based in New York. "Merging Delta with another airline could take out a lot of capacity and make the combined airline much more profitable."

Delta's New Top Pilot a Surprise

(page 2 of 2)


New Culture

For his part, the 52-year-old Anderson says he isn't coming on as an agent of change, nor does he plan to package the airline for a long-rumored merger with his former employer—a vow he made during a meeting with Delta's pilots' union earlier in the day. "I asked him point-blank about that, and he promised (scouts honor or something to that effect) me he isn't here to facilitate a merger with Northwest," says Lee Moak, chairman of the executive committee of Delta's pilots' union.

In an interview, Anderson was firm that he wants to continue the strategic course that Grinstein and Co. set during bankruptcy: lessening Delta's dependence on cutthroat domestic routes by expanding aggressively into more lucrative international markets like Venice, Kiev, and Bucharest. "Delta has a strong position in the industry and will remain in control of its own destiny," says Anderson.

Still, the board's choice of an outsider came as a shock for many of Delta's rank-and-file workers, who were expecting to see either of Grinstein's top aides, Chief Operating Officer James Whitehurst or Chief Financial Officer Ed Bastian, named to the job. Delta management has long put stock in preserving a culture built around the "Delta family," and both Whitehurst and Bastian had pushed to make sure Delta employees received $350 million in stock to compensate for the pay cuts they took during bankruptcy, a move that generated grumbling among more than a few creditors and may have led to their efforts to consolidate power on the board. "I think Jerry [Grinstein] didn't anticipate that he'd lose control of the new board," says one Atlanta executive who is a friend of Delta's retiring CEO.

Indeed, the board's selection of Anderson, a no-nonsense lawyer by training who once worked as a Texas prosecutor, suggests that the board wanted an outsider who would bring a dispassionate focus on Delta's bottom line. "There's going to be a culture shock at Delta," says one airline industry executive who has worked with Anderson. "He is not the kind of CEO who shows up at an employee rally and hugs all the workers. He is all business."

Board Has His Back

And more management changes may yet come. While Anderson moved quickly to name Bastian as his new president and CFO, he didn't indicate what Whitehurst's new role would be, prompting speculation that Whitehurst could be next to depart. (In an e-mail response to a query from BusinessWeek, Whitehurst said, "I want to assure you that I have NOT resigned and have no intention of resigning.")

While not a Delta insider, Anderson nonetheless has some familiarity with the carrier by dint of his years at Northwest. The two airlines, along with Continental, have a "code sharing" agreement that allows, for instance, Delta to book passengers on connecting flights to cities that it doesn't serve, with Continental or Northwest actually flying the last leg. What's more, Delta and Northwest also participate in an international code-sharing agreement that allows the two carriers to tap into the route structures of foreign-based airlines like Air France (AKH), Aeroflot, and Korean Air.

But there will be no honeymoon for Anderson at Delta. For one, the new CEO has to begin winning over employees who remember that the airline's only other outsider CEO—Leo Mullin—ended with the carrier filing for bankruptcy. But if Anderson builds the same goodwill at Delta that he did at Northwest, the rank and file will likely come around on their new CEO. Northwest employees say that during his years at the Minnesota-based airline, Anderson earned a reputation as an executive who was attuned to the needs of the ground troops. When Northwest was looking to cut costs following the 2001 terrorist attacks, Anderson endorsed an employee proposal to let 2,400 attendants who agreed to take leaves retain their medical benefits. He also built an "Ask Richard" button on Northwest's internal Web site that let workers e-mail him with questions. "He'd get back to you," says Kevin Griffin, a 27-year flight attendant. "He actually came out and listened to employees. I think [Delta] got a better deal. If we could trade, [we'd] do it in a heartbeat."

But for Anderson, rallying employees at Delta is only half the battle. On the operations side, he has to make a decision initiated by the previous management team on whether to sell or spin off regional feeder carrier Comair as part of its ongoing restructuring. And with the pilots' contract up for renewal in 2010, Anderson—who analysts credit with smoothing out Northwest's chronically poor relations with its unions during his two years as CEO there—must begin negotiating with Delta pilots who feel they bore the brunt of the pay cuts management insisted were necessary to get Delta back into the black. But as an outsider, Anderson won't be as wedded to Delta's culture as the other candidates. And he'll know that this board has his back.

Foust is chief of BusinessWeek's Atlanta bureau.

 

[Schwanker]

Could the fact that the Northwest name must remain on the airplanes to continue the landing rights in Japan mean Delta would be the seller and Northwest the buyer? Hmmmmm

I think more telling is the poison pill. To fend off a takeover by USAir/America West, Delta had to forego a poison pill provision. This would make it easier for Delta to be acquired. NWA, on the other hand, could not be so easily acquired as one would have to pony up a very healthy premium.

Schwanker

 

[Diesel-9]

Friends I talk with at UAL and CAL both have said talking between the two has advanced. Still a big if but would be the event to start the Big Bang. The future is the Pacific Markets and who has the routes and rights to be there will be the buyers. NWA will announce the new freighter by end of year. Down to a choice between 2 airframes. Plans to grow the cargo division significantly.

 

[General Lee]

I think more telling is the poison pill. To fend off a takeover by USAir/America West, Delta had to forego a poison pill provision. This would make it easier for Delta to be acquired. NWA, on the other hand, could not be so easily acquired as one would have to pony up a very healthy premium.

Schwanker

Complete employee implosion if NWA were to take over. Unlikely. I would think that IF there were a merger, it would have Delta's name on it, with an ATL base and a DL management team. I don't know if it could get any worse over there at NWA, but a buyout of DL would lead to even more problems on the Southern Front. Nah.

Bye Bye--General Lee

 

[180ToTheMarker]

Complete employee implosion if NWA were to take over. Unlikely. I would think that IF there were a merger, it would have Delta's name on it, with an ATL base and a DL management team. I don't know if it could get any worse over there at NWA, but a buyout of DL would lead to even more problems on the Southern Front. Nah.

Bye Bye--General Lee

I hope you're right GL. As a FNG here this merger talk makes me nervous

 

[Truckdriver]

Complete employee implosion if NWA were to take over. Unlikely. I would think that IF there were a merger, it would have Delta's name on it, with an ATL base and a DL management team. I don't know if it could get any worse over there at NWA, but a buyout of DL would lead to even more problems on the Southern Front. Nah.

Bye Bye--General Lee

I'm with the General on this one. If Anderson is as focused on the link between employees and customer experience as he is saying he is, he should know that letting NW takeover DL would be the new textbook example of how to ruin customer service overnight. I know very little about what is going on here, but I'd venture to bet that nothing will happen until the next downturn. That may be next year or it may be 5 years down the road. When that happens, I think DL will be one of the stronger airlines out there and will be in a position to pick up pieces of those airlines that don't make it if the government doesn't step in and prop up the weak guys. This could all change if Tilton can talk someone into buying UAL which may happen so it's anyones guess as to what will happen over the next couple of years.

 

[Schwanker]

Complete employee implosion if NWA were to take over.
By whom? DAL or NWA employees. Why the implosion?
Unlikely.
I agree. It is hard to vision a merger of any of the top 5 legacies passing regulators. If it were to happen, the near future is probably the time. Don't forget the "golden share" NWA has over CAL. Another huge variable that will come into play if consolidation is forthcoming.
I would think that IF there were a merger, it would have Delta's name on it, with an ATL base and a DL management team.
It's nice you would think that. Does it make you feel better? I'm not sure regulators or financers put a whole lot of weight on feelings.
I don't know if it could get any worse over there at NWA, but a buyout of DL would lead to even more problems on the Southern Front. Nah.
I could get worse at NWA. A lot will be determined pending the outcome of TDC implementation. Not sure what you mean about problems on the Southern Front. Are things not going well there?

Bye Bye--General Lee

Schwanker

 

[IXLR8]

Lets hope there is no merger....

 

[gutshotdraw]

Ummm no. IF the two did merge, a part of each name would be on the new name. Delta would bring the word "Delta" and Northwest would bring the word "Airlines." The combination, you see, would be "Delta Airlines." Anyway, I don't think there will a merger between the two, and Delta has it's own Asian expansion plans already.

Bye Bye--General Lee

Bwaahahhaaaa> Gee General. I never heard that one before.......

You need some new material.