United buyout of Westin and Hertz -- why did it not work?

[shon7]

Can anyone give more information on why the buyout of Westin and Hertz by United in the 70s and 80s didn't work. Westin and Hertz seem to be doing extremely well as independent companies. Was UAL doing something wrong -- or will airlines just never mesh with any other business?

 

[HalinTexas]

Hard Landings by Petzinger covers it pretty well.

Boils down to a Hotel guy was hired to run an airline. He wasn't that good at either. Secondly, terrible marketing. Similar story with TWA and Marriott. Airlines were cash cows under deregulation, and managment frequently looted that cash to run subsidiaries. It's all in the book. I've read it twice.

 

[FlyBoeingJets]

Couldn't agree more with Halin.

Why did Delta bring in rich banker Leo Mullin to run the show?? He must have been someone's buddy. When the revenue started to crumble he just rewrote his retirement package to ensure it was protected from bankruptcy. I'm not aware of any belt tightening having affected Leo. To him it just sucked to have to leave his cush job early.

Same thing with AA, UAL and USAir.

 

[Ty Webb]

Couldn't agree more with Halin.

Why did Delta bring in rich banker Leo Mullin to run the show?? He must have been someone's buddy.

You're killing me. I said the same thing three years ago. Although he was formerly with First Chicago, at the time they hired him, he was being groomed for the CEO position at an electric utility, Com Ed in Chicago.

What Delta needed was an innovator, but what they got was a guy who had spent his whole life in the highly-regulated (protected) industries of banking and utilities, not the cut-throat, testosterone-charged airline industry. Big mistake.

As for United trying to run a non-airline company- do you even have to ask? They can't even run an airline.