| Tilton (AFP)
New York, Sept. 2: The board of directors of UAL, the parent company of United Airlines, is likely to name Glenn F. Tilton, an oil industry executive, as the airline’s new president and chief executive in a meeting Monday morning, according to people with knowledge of the situation.
They said Tilton, one of the two vice-chairmen of ChevronTexaco Corp. and interim chairman of Dynegy Inc., the ailing energy trader partly owned by ChevronTexaco, was recommended for the post by a five-member committee of directors last week.
Another front-runner for the job was John H. Walker, a director at UAL and the chief executive of the Weirton Steel Corp.
Tilton would replace John W. Creighton Jr., who has been serving as the interim chief executive since last October and who turned 70 Sunday. Tilton would step into a job that requires turning around the nation’s second-largest airline, one that is 55 per cent owned by employees and has representatives from two unions on its board.
Creighton said on August 14 that United, which lost $ 341 million in the second quarter, might have to declare bankruptcy this fall if it does not get concessions from its unions and suppliers to bolster an application for a $ 1.8 billion federal loan guarantee.
Last week, United said it needed $ 1.5 billion in annual concessions over six years from its workers as part of an effort to cut costs by $ 2.5 billion a year.
But several unions balked at management’s proposed $ 1.5 billion in cuts. Those groups, especially the machinists’ union, the largest at United, have also said they would not enter serious discussions until a new chief executive was named. Many people in the industry have viewed Creighton as a lame duck since he announced in May that the company was searching for his successor.
Industry experts say Tilton, 54, would have a formidable challenge ahead of him. The first task is to figure out how to get the unions to agree to a revamping plan that would entail deep concessions, since United has some of the highest labor costs in the industry.
The two chief executives before Creighton, Stephen M. Wolf and James E. Goodwin, failed because they antagonised the unions. Creighton, a former paper industry executive, came from UAL’s board to fill in as chief executive after Goodwin’s departure.