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Report: UAL to name top exec
Wall Street Journal says board picked Tilton
By CBS.MarketWatch.com
Last Update: 3:11 PM ET Aug. 31, 2002
NEW YORK (CBS.MW) -- Troubled UAL Corp. will soon have a new top executive, the Wall Street Journal reported Saturday on its Web site.
Glenn Tilton will be named as soon as Monday when the UAL board is scheduled to meet in Chicago, the Journal said.
Tilton, who has no airline management experience, is presently vice chairman of the board at ChevronTexaco (CVX: news, chart, profile) and interim chairman at Dynegy (DYN: news, chart, profile), in which ChevronTexaco holds a stake.
Quoting sources close to the UAL decision, the Journal said Tilton, 54, was selected over John Walker, a UAL director who is chairman at Weirton Steel (WRTL: news, chart, profile), based on Tilton's leadership skills.
Tilton was chairman and CEO at Texaco before it merged with Chevron in October 2001.
The present executives would be expected to leave soon, the Journal said. Jack Creighton, UAL's interim chairman and CEO, announced in May that he would be leaving those posts. UAL President Rono Dutta and COO Andy Studdert would also step down, the Journal said..
Tilton would take over an airline that's in deep schism with its unions amid attempts to gain a federally guarantee for a $1.8 billion loan.
United Airlines' flight attendants union on Friday rejected management's proposed steps to slash costs by $9 billion over six years until a new top executive comes in with a recovery plan.
Echoing the position of the carrier's unionized pilots and mechanics, the flight attendants took issue with the offer as the airline scrambles to qualify for the federal loan guarantee.
United parent UAL Corp. (UAL: news, chart, profile) has until Sept. 16 to resubmit its application with the Air Transportation Stabilization Board, whose aid it hopes would help it stave off filing for bankruptcy.
Though details haven't been released, United's emergency cost-savings plans include employee concessions that would wipe out $1.5 billion a year in wages and benefits, canceled or deferred raises. Management also is calling for other work-rule changes toward making as much as $2.5 billion in annual cuts.
United says that chopping out $2.5 billion in expenses a year "will better align costs with anticipated future revenues and increase the likelihood that the company will qualify" for its loan guarantee.
That's an awful lot of money for a $1.8 billion backup, the flight attendants said. Like the pilots, the flight attendants suspect there's an underlying motive.
"The math doesn't add up," said union President Greg Davidowitch. "So, we ask again: Who's using whom?
"Is United using the ATSB as its heavy to extract huge concessions from its workers to cover for years of mismanagement?" he added. "Or is the White House attempting to dictate what airline workers in his country earn through the ATSB? Both scenarios are un-American."
The union, which represents more than 26,000 United flight attendants, reiterated that it wouldn't consider compromise without a viable plan and called for a new executive to replace Creighton.
"United management wants its employees to invest $9 billion of our hard-earned money in an airline with no plan and no leader," Davidowitch said. "While we continue to meet with the company, there will be no concession talks under these circumstances."
The pilots union, a much stronger force because of their 28 percent ownership position, took an even harsher stance, saying that the pricey request was "totally and wholly unacceptable."
Such tough attitudes do not bode well for quick recovery, say analysts at Standard & Poor's, which is keeping UAL's debt rating on watch with "negative implications."
"The scale and complexity of reaching concessionary agreements in a short time, the unions' initial very negative reaction, and United's long history of difficult labor relations imply that a bankruptcy filing is more likely than not," said S&P analyst Philip Baggaley.
Wall Street Journal says board picked Tilton
By CBS.MarketWatch.com
Last Update: 3:11 PM ET Aug. 31, 2002
NEW YORK (CBS.MW) -- Troubled UAL Corp. will soon have a new top executive, the Wall Street Journal reported Saturday on its Web site.
Glenn Tilton will be named as soon as Monday when the UAL board is scheduled to meet in Chicago, the Journal said.
Tilton, who has no airline management experience, is presently vice chairman of the board at ChevronTexaco (CVX: news, chart, profile) and interim chairman at Dynegy (DYN: news, chart, profile), in which ChevronTexaco holds a stake.
Quoting sources close to the UAL decision, the Journal said Tilton, 54, was selected over John Walker, a UAL director who is chairman at Weirton Steel (WRTL: news, chart, profile), based on Tilton's leadership skills.
Tilton was chairman and CEO at Texaco before it merged with Chevron in October 2001.
The present executives would be expected to leave soon, the Journal said. Jack Creighton, UAL's interim chairman and CEO, announced in May that he would be leaving those posts. UAL President Rono Dutta and COO Andy Studdert would also step down, the Journal said..
Tilton would take over an airline that's in deep schism with its unions amid attempts to gain a federally guarantee for a $1.8 billion loan.
United Airlines' flight attendants union on Friday rejected management's proposed steps to slash costs by $9 billion over six years until a new top executive comes in with a recovery plan.
Echoing the position of the carrier's unionized pilots and mechanics, the flight attendants took issue with the offer as the airline scrambles to qualify for the federal loan guarantee.
United parent UAL Corp. (UAL: news, chart, profile) has until Sept. 16 to resubmit its application with the Air Transportation Stabilization Board, whose aid it hopes would help it stave off filing for bankruptcy.
Though details haven't been released, United's emergency cost-savings plans include employee concessions that would wipe out $1.5 billion a year in wages and benefits, canceled or deferred raises. Management also is calling for other work-rule changes toward making as much as $2.5 billion in annual cuts.
United says that chopping out $2.5 billion in expenses a year "will better align costs with anticipated future revenues and increase the likelihood that the company will qualify" for its loan guarantee.
That's an awful lot of money for a $1.8 billion backup, the flight attendants said. Like the pilots, the flight attendants suspect there's an underlying motive.
"The math doesn't add up," said union President Greg Davidowitch. "So, we ask again: Who's using whom?
"Is United using the ATSB as its heavy to extract huge concessions from its workers to cover for years of mismanagement?" he added. "Or is the White House attempting to dictate what airline workers in his country earn through the ATSB? Both scenarios are un-American."
The union, which represents more than 26,000 United flight attendants, reiterated that it wouldn't consider compromise without a viable plan and called for a new executive to replace Creighton.
"United management wants its employees to invest $9 billion of our hard-earned money in an airline with no plan and no leader," Davidowitch said. "While we continue to meet with the company, there will be no concession talks under these circumstances."
The pilots union, a much stronger force because of their 28 percent ownership position, took an even harsher stance, saying that the pricey request was "totally and wholly unacceptable."
Such tough attitudes do not bode well for quick recovery, say analysts at Standard & Poor's, which is keeping UAL's debt rating on watch with "negative implications."
"The scale and complexity of reaching concessionary agreements in a short time, the unions' initial very negative reaction, and United's long history of difficult labor relations imply that a bankruptcy filing is more likely than not," said S&P analyst Philip Baggaley.
