Tough UAL Management Pledged During Buyout

UAL Corp. Chairman Stephen M. Wolf pledged today to manage United Airlines’ parent company as aggressively as he can while its employees try to accomplish their $4.38-billion buyout.

Wolf, the company’s chairman since late 1987, is likely to be replaced by United’s three labor unions if they succeed in getting the financing for their $201-per-share bid, which UAL’s board has accepted.

Separately, UAL reported a first-quarter loss of $36.4 million on revenue of $2.19 billion, compared with a profit of $65.44 million on sales of $2.04 billion in the year-ago period.

“I want you to know that I will continue to manage the company in as aggressive a fashion as possible,” Wolf told today’s annual shareholders meeting.

Wolf said UAL’s board and management “are committed to using these next few months to deliver the strongest possible United Airlines to its new owners.”

He said he is opposed “in principle” to any group borrowing money to buy an airline “given the cyclical nature of the business and the enormous capital investments required in the industry.”

But he said that if “leveraging is inevitable, as it was in this case, I believe the preferable course to be employee ownership.”

Wolf reportedly fought the employee buyout plan behind the scenes but ultimately relented. The board had to choose between selling the nation’s second-largest airline to its 71,000 employees or facing a proxy fight with UAL’s largest shareholder, Coniston Partners, that could have ousted the company’s directors.