The day he was named chief executive of UAL, the parent of United Airlines, Glenn Tilton made a point of meeting with the leaders of the airline's six labor unions. He wanted to assure them that he was not their enemy, and they praised him afterward as "proven" and "creative."
Other airline executives, however, were openly dismissive of Tilton, noting that he had spent his entire career in the oil business and thus was unqualified to resolve myriad problems then dragging United toward bankruptcy. At one point, Gordon Bethune, the chief executive of Continental Airlines, called Tilton "clueless."
What the industry didn't realize then was that Tilton's background had made him a shrewd diplomat. After earning a bachelor's degree in international relations from the University of South Carolina in 1970, he joined Texaco and spent two tours in Europe. The second included a time as president of Texaco Europe, responsible for government relations in 20 countries.
Now, competing executives are beginning to realize how much they may have underestimated him. Since the airline filed for bankruptcy on Dec. 9, Tilton, 54, has embarked on a strategy that involves winning US$2.56 billion in labor concessions, cutting thousands of jobs and shifting 30 percent or more of United's capacity into a new low-fare carrier.
Labor angry
The plan has already angered the unions and generated skepticism on Wall Street. But it if succeeds, executives at rivals may wind up thanking him for finding a way for major airlines to survive amid diminishing revenue, soaring costs and fierce competition from low-cost airlines like Southwest and JetBlue.
Gary Chaison, a professor of industrial relations at Clark University in Worcester, Massachusetts, said other major airlines were paying close attention to what Tilton is trying to do.
"The question is not whether the strategies will work for United," he said. "It's whether they will work for them."
A particularly important event is likely to occur today, when United is expected to file a motion in US Bankruptcy Court in Chicago, asking for permission to abrogate its labor agreements if negotiations with the unions fail to yield the concessions the company says are essential to its survival.
United officials said that they had no plan to seek cancellation of the contracts immediately and that they would continue talks with union leaders, which could stretch for weeks.
Nonetheless, such a motion would give Tilton a tool that no airline chief executive has had since Frank Lorenzo used the bankruptcy code to shut down Continental in 1983 and reopen it as a union-free carrier. (Afterward, the law was changed to make such a move more difficult.)
"It's a real brinkmanship game," Chaison said. "It's saying, `You'll either grant us concessions, or we'll take them.' It's the labor movement's worst nightmare."
US Airways, which filed for bankruptcy last summer, sought a similar motion. But it did not apply it, emphasizing negotiations. Still, unions had to grant multiple rounds of concessions before it finished its restructuring plan in January. US Airways says it expects to emerge from bankruptcy at the end of this month.
Tilton said he did not want to follow that example. In an interview this month, he said he wanted to do the restructuring only once and "never, ever come back here" to the brink.
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