United Airlines’ Parent May Pick CEO Soon
The top job at UAL Corp., parent of United Airlines, might not seem like a plum assignment with the company facing possible bankruptcy, involved in a bitter fight with its unions and in danger of losing a huge federal loan guarantee.
But numerous executives would like the chance to fix the ailing airline, which has been looking for a new chief executive for almost a year. Over the holiday weekend, reports surfaced that a CEO would be named soon, perhaps as early as today.
There was wide disagreement over who would get the job. The online edition of the Wall Street Journal quoted unnamed sources saying Glenn Tilton, vice chairman of ChevronTexaco Corp. and acting chairman of struggling Dynegy Inc., has the backing of the UAL board to become chairman, president and CEO. The newspaper also reported that a meeting of the board was scheduled for today.
In the meantime, Business Week magazine, also citing unnamed sources, reported that the top contenders are John Walker, CEO of Weirton Steel Corp. and a UAL director since March, and Michael Durham, who was chief financial officer of American Airlines in the early 1990s.
Company officials did not return calls seeking comment. UAL board members were told to keep quiet and said they could not confirm whether a board meeting was scheduled for today.
“I am not supposed to say anything,” said board member John Van de Kamp, former California attorney general.
The Air Line Pilots Assn. also was unable to confirm whether the naming of a new CEO was imminent, even though one of its members sits on the board of the 55% employee-owned UAL.
“That is the kind of stuff he has not been sharing with us,” said union spokesman Herb Hunter on Sunday. “He said that until the company makes a statement he would have no comment.”
UAL, which lost an industry record $2.1 billion last year, is seeking deep concessions from its workers. But its unions have said a permanent CEO needs to be named before negotiations can begin.
Interim CEO Jack Creighton, who said this summer that the nation’s second-biggest airline faces bankruptcy if it doesn’t cut costs drastically enough to win a $1.8-billion federal loan guarantee, took over last year when James Goodwin resigned under pressure.
On Friday, UAL fell 18 cents to close at $2.87 in New York Stock Exchange trading. The stock has lost 90% of its value this year.
“We need to get moving forward, the sooner the better,” said Hunter. “We are like a ship without a rudder.”
Tilton, 53, was chairman and CEO of Texaco before the company was sold to Chevron in 2001. He began his career with Texaco in 1970 as a sales trainee.
In early 2001 Tilton became chairman of the board and CEO of Texaco, but before the end of that year the company merged with Chevron and he was named vice chairman. He was named to the board of the troubled Dynegy in January and became interim CEO in May. San Francisco-based ChevronTexaco holds a 26.5% stake in Dynegy.
Walker was named CEO of Weirton in January 2001 and then set upon leading the seventh-largest U.S. integrated steel producer through a financial restructuring that eliminated jobs and reduced debt at the partly employee-owned company.
Durham was an executive with reservations system Sabre Holdings Corp. but left the company shortly before it was spun off from AMR Corp.--owner of American Airlines--in 1999. He set up a Dallas-based consulting firm called Cognizant Associates.
Durham is a director at Hotwire.com, an online travel reservations company partly backed by major airlines and Texas Pacific Group, an investment firm.
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Bloomberg News and Reuters were used in compiling this report.
