MULLIN OUT AT DAL! (eff. 1/1)

[FL000]

It's about time. He had no business running an airline with his lack of leadership skills. I can't wait to see how big and how golden his parachute is.

-------------------------------------

Mullin stepping down as Delta CEO on Jan. 1

Mullin came to Delta in 1997.

Delta Air Lines Chairman and Chief Executive Leo Mullin is retiring, the company announced today.

Mullin, 60, will step down as CEO on Jan. 1 and will remain chairman until Delta's annual meeting on April 23.

Gerald Grinstein will take over as CEO on Jan. 1. He is a 16-year member of Delta's board and has chaired the board's executive sessions since 1999.

Grinstein, 71, served as non-executive chairman of Delta from August 1997 to October 1999. He is a former CEO of Western Airlines and Burlington Northern railroad, and a former non-executive chairman of Agilent Technologies.

John F. (Jack) Smith Jr., has been elected the presiding director of Delta's board, and he will assume the position of non-executive chairman of Delta effective at the company's annual meeting in April. Smith, 65, is a former chairman and chief executive officer of General Motors and a member of Delta's Board since 2000.

AJC story

 

[jarhead]

Well, so much for the huge bonus and golden parachutes for 33 top executives, designed to keep them from leaving the company. It would appear that the effect was just the opposite. Leo leaves with a $16 million dollar payoff! How do ya like them apples!

 

[46Driver]

Considering Delta is in the best shape of any of the hub and spoke carriers, be careful what you wish for.

 

[Boeingman]

This is interesting. He is suddenly replaced by an older guy with a hand in other boards (i.e. not focused on the carrier).

Prelude to a merger?Naw, no way. Although it was always rumored that Gordon wouldn't step down between a CAL/DAL merger with Mullin at the helm.

 

[jetexas]

Leo leaves with a $16 million dollar payoff! How do ya like them apples!

Hey if I leave Eagle will I get my mulitmillions?

 

[Typhoon1244]

Hey if I leave Eagle will I get my mulitmillions?

Sure! Go ahead! We'll meet you in the parking lot with the check.

 

[fr0g]

So.. anyone have the inside scoop?? is this the beginning of the end for Delta? Did he leave because he knows something we don't - or is this just a routine leadership change? For everyone's sake - I hope that DL is on the road to recovery..

 

[Bluestreak]

I like these stickers,etc. about Leo:

www.cafeshops.com/ceo

 

[T-Gates]

He is a former CEO of Western Airlines......

Thats a great thing to have on your resume..... Was he CEO when they went CH 11 and DAL bought them in '85?

Not the kind of track record I'd want for a new CEO...

 

[jarhead]

Reuters
Delta CEO Retires, Pilot Deal Elusive
Monday November 24, 11:17 am ET
By Julie MacIntosh


NEW YORK (Reuters) - Delta Air Lines Inc. (NYSEAL - News) on Monday unexpectedly said Chairman and Chief Executive Leo Mullin would retire in the midst of a crucial series of pilot wage talks, leaving each of the top three U.S. airlines with new leaders since the Sept. 11, 2001, attacks.
Mullin, a former banker who steered Delta through a cash crunch following the attacks but has come under increasing pressure from employees over his compensation, will retire as CEO on Jan. 1 and step down as chairman on May 1.

Two members of the board of directors at No. 3 U.S. airline Delta, who are both older than the 60-year-old Mullin, will split his duties going forward.

Jack Smith, 65, the former head of General Motors Corp. (NYSE:GM - News), will succeed Mullin as chairman of the Atlanta-based airline.

Gerald Grinstein, 71, the former chairman and CEO of railroad Burlington Northern Corp. and regional air carrier Western Airlines, will succeed Mullin as CEO.

Grinstein, a long-standing Delta board member, sold Western Airlines to Delta in 1984 and was a key figure in Delta's decision to hire Mullin as CEO six years ago.

Mullin receives a pretax retirement package of $16 million, which Delta said has already been mostly funded and disclosed.

PRESSURE AT THE TOP

Mullin and Delta's board came under fire earlier this year, after retention bonuses and pension perks awarded to senior management during the worst-ever U.S. airline industry downturn inflamed workers and shareholders.

Delta said it would stop contributing to a pension plan aimed at retaining executives, and Mullin gave himself a $9.1 million pay cut. Delta's pilots, who have been asked to make mid-contract cuts to their industry-leading pay package, have wielded the example as one of excess.

Delta representatives to the Air Line Pilots Association (News - Websites) said on Monday that the news was unexpected, and said they "remain focused on protecting the piloting profession and helping Delta Air Lines return to profitability."

Delta spokespeople said Mullin hadn't just bowed to pressure from labor to account for the compensation fiasco.

"This was a personal decision made by Leo," said a Delta spokeswoman. "He believes this is a logical transition."

In an industry known for enmity between labor and management, the pressure can be intense. The CEO of AMR Corp.'s (NYSE:AMR - News) American Airlines, Donald Carty, resigned last spring after he infuriated unions with an untimely disclosure of special executive retention plans.

UAL Corp.'s (OTC BB:UALAQ.OB - News) United Airlines' former CEO James Goodwin was also forced to retire when a firestorm erupted after he sent an internal memo to employees saying the airline might "perish" without massive cost cuts.

Negotiations between Delta and its pilots are scheduled for Tuesday.

COST-CUTS TO CONTINUE

"I reach this point with several conflicting emotions," Mullin said in a Monday note to employees filed with the Securities and Exchange Commission (News - Websites) .

He was proud of the launch of low-cost unit Song and the spread of Delta's alliance with Northwest Airlines and Continental Airlines this year, but said "Delta's financial performance continues to require massive improvement."

Delta, which reported a $164 million loss for its third quarter, announced this month that its fourth-quarter loss would be at least 50 percent larger than previously forecast. That was because more pilots than expected had decided to retire, leading to bigger pension plan charges.

Delta's costs remain the highest in the industry, and it says pilot wages put it at a $1 billion per-year disadvantage to its rivals, just as its market share is being gobbled up by lower-cost competitors.

Grinstein, who will soon move to Atlanta, said in another letter to workers that he was keenly aware of the "serious financial and strategic challenges Delta faces," and noted that Delta has a heavy debt burden, with more than $20 billion of debt and operating lease obligations.

"We must face head-on the cost issues anywhere in the company that stand between us and renewed financial strength," Grinstein said.

Shares of Delta traded 3.6 percent higher on Monday morning, up 41 cents to $11.84.

 

[bart]

I can't see anyone with a smidgeon of leadership talent wanting to take the CEO job at Delta on. I would liken it to trying to help a wounded rhino... you want to do something to save such a noble beast, but more than likely you will be ineffective because the wounded animal will kill you first. Yeah the pay would be good, but it would probably be your last job, since failure is about guaranteed.

I cannot see the interim chairman keeping the helm for any length of time. Is labor going to endorse a candidate for the job? I am sure the unions welcome the news, but I think in the long run, no matter who comes in, they will be demonized in short order. The systemic problems of the airline will most likely elude solutions until it is too late.

 

[jarhead]

Bart

From your post, I infer that you feel that their is no one who can save Delta Airlines. In other words, you see DAL as a doomed company. Am I correct in my inference? If so, do you have a time line as to when Delta will go T.U., and cease to exist?

 

[bart]

I see that if Delta continues in it current direction, without radical change, yes they are doomed. It may take another downturn of the economy in 6 or 7 years to do the job, but they are on the road for it. They have survived thus far because of their dominance in 2 markets and the amount of cash they had in the bank when things went South.

They have a bloated bureaucracy that can only think in terms of cutting costs, not in making an efficient system out of all the pieces they have laid before them. They also have a contentious management/ labor situation that costs them huge amounts of money in wasted energy and effort.

They are cash flow negative at the current time and the trend line for them is not good. LCC's are beginning to make inroads into their last bastion of mainline profitability, which is long-haul routes. As businesses continue to rein in travel costs, and business traveler's lose what little discretion they have left, the frequent fliers will go away, too.

If I am missing something, please let me know. I can only go by their financial filings and what I read and what I hear from employees, both pilots and management.

 

[jarhead]

Bart

What you state is hard to argue with. I agree, that regardlesss of how much cash an entity has, if it continues to burn more than than it takes in, the enterprize will eventually be gone. I would only argue, that wage reductions will be necessary, along with other efficiency and better management. The LCC has much lower costs for labor than the legacy carriers across the board. That is why you can no longer buy a TV, microwave Oven, or even a PC that is made in the U.S any more. These things are produced in Korea, China, Mexico, and other third world places. The only reason this is done, is because of relatively cheap labor. It's too bad, but that's the reality

I don't know many airlines that have "good", or even "fair" labor relations now days. "Poor" is the descriptive word. I have never seen any industry with such a dysfunctional employee-management relationship. Not very good at all. Don't know what happened from the days when Delta empoyees presented Delta with a gift of a brand new Boeing 767. Sure would not happen in these times.

Too bad.

 

[bart]

I could not agree more. As a longtime Atlanta resident, Delta has always been an important part of it. It is sad, but they will need to make some serious changes, throughout the organization, and that will be one hell of a leadership challenge. I do not know of a business leader out there that is up to it that would be able to unify the organization, which is what I believe it will take.

 

[jarhead]

Bart

I am a life long resident of the Minnapolis-St. Paul area.....the Headquarters of NWA. Things at NWA mirror that of DAL. Terrible employee-management relationships. Pilots hate the CEO Richard Anderson, who is also trying to get wage concessions. Flight attendants rage at management as well as the mx union. It's like watching a pit bull dog fight.....non stop.

 

[AA717driver]

bart and jarhead...

I thought you guys were talking about American...

Don't see any LCC senior management bailing with their golden parachute, do you?TC

 

[SDF2BUF2MCO]

Re: bart and jarhead...

Don't see any LCC senior management bailing with their golden parachute, do you?TC

Well not yet anyway....time will tell as it always does. Would like to think the biz is big enough for everyone to prosper.