United chief's job may be at risk
By Dave Carpenter
Associated Press
CHICAGO — When Glenn Tilton took over the leadership of United Airlines in 2002, skepticism abounded that a career oilman could learn the airline business fast enough to pull the carrier out of its dangerous dive.
Industry experts questioned how Tilton could persuade employees to agree to drastic wage and benefit cuts, raise United's operating performance sharply and reshape it into a cost-competitive airline.
Tilton
United's emergence from bankruptcy is still not assured after a more than 18-month stay in Chapter 11. But the unflappable Tilton has used diplomacy and people skills to help achieve the first two objectives and is chipping away at the third.
But whether he will keep his job is an open question as a result of yesterday's decision by the Air Transportation Stabilization Board to reject the airline's application for a $1.6 billion federal loan guarantee.
In need of a cash infusion, United now may turn to an outside investment group that's almost certain to demand more cutbacks — and new leadership.
For now, the 56-year-old Tilton gets a grade of "incomplete" along with acknowledgment from even his skeptics that he has taken solid advantage of the leverage of federal bankruptcy law to pare United's out-of-control cost structure to a manageable size.
Morningstar Inc. airline analyst Nicolas Owens is among those who credit Tilton with doing a good job so far, particularly in avoiding labor or operational turmoil.
"He's shown a willingness to sit down and listen, which is not something that his predecessors were known for," he said. "And something United is doing particularly well is they're continuing to focus on the customer and maintaining a good-quality product in the face of all this restructuring."
What Tilton has failed to do is come up with a way to stop United's losses that have now reached a staggering $9 billion in four years.
"He may have made some progress with tactical issues but there has been no new strategic vision under his leadership that I can see," said Ron Kuhlmann, an Oakland, Calif.-based transportation consultant for Unisys R2A, downplaying the creation of United's new discount carrier Ted this year.
If Tilton is unable to see his recovery plan through to completion, it won't be for lack of confidence or effort.
In an interview with The Associated Press last week, he said the carrier's undisclosed new business plan is so strong that he expects United to exit bankruptcy by year's end "with or without" the loan guarantee — the first time the CEO has made such a declaration publicly.
Logging more airplane time than many pilots, he travels constantly to New York and Washington — where he was closeted in talks with the ATSB yesterday — and throughout United's worldwide network to talk up the business plan, nurture key contacts and boost employee morale and customer confidence.
"It's a job of perpetual motion," he said at United's headquarters near O'Hare International Airport after recent trips to Singapore and Frankfurt. "It's very invigorating. ... I benefit from it because I enjoy it."
Union leaders declined to comment for this story.
One cited concern about impending change at United if the bid for government backing fails and particular sensitivity in the wake of the latest painful concessions on employee retirement benefits.
