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.
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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.
PHOTO: NY TIMES
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.
People who know Tilton are not surprised that he follows his own path. He always has. Born in Washington, he and his wife, Jacqueline, married when they were teenagers.
While he went on to become an oil industry executive -- rising to chairman and chief executive of Texaco before it was bought by Chevron in 2001 -- Jacqueline Tilton trained as a lawyer, though she does not practice. They have a grown son and daughter and one grandson.
Tilton's jousts with labor contrast with the endorsement he received from labor leaders last September, when he was hired as UAL's third chief executive in less than a year. His two predecessors, John Creighton Jr. and James Goodwin, were ousted by union representatives on the board when each man predicted that the airline would be forced to file for Chapter 11 protection.
Union ownership
Until recently, United's unions owned most of the company's stock and had supervoting rights on its board. They lost that power this month when union members' ownership slipped below 20 percent.
Tilton said publicly when he joined the airline that it could remain solvent, though privately, friends say, he had no illusions about United's eventual fate. Even with a federal bailout, a bankruptcy was probable. Analysts criticized him for not being more visible in his first weeks at United, when it was lobbying for federal loan guarantees amid strong opposition from other airlines.
Instead, he spent the time meeting with employees, trying to gain their trust for the rough days he knew were ahead.
"He genuinely does care about people and wants them to be his partners," said Elizabeth Smith, who worked with Tilton for years at Texaco and was vice president for investor relations while he was chief executive there.
Even if United seeks permission to abrogate the labor pacts, Smith said she expected Tilton to continue negotiating until the May 1 deadline that the airline faces for replacing US$1 billion in temporary concessions with real cuts.
"He would bend over backwards and go up to the last second trying to explain to you how important it is to be a partner," she said. "He's not the one to use that big stick if he doesn't have to."
But if time expires, Smith added, Tilton will not hesitate to impose his plan on the unions. "He's a gutsy guy," she said, "and he will do what needs to be done."
Some experts still doubt his strategy, particularly the plan to start a low-fare airline. "The track record of carved-out carriers and airlines-within-an-airline is dismal," said Robert Mann Jr., an airline industry consultant based in Port Washington, New York. Union leaders say it will result in a second class of workers with lower wages and benefits than those at the parent airline.
Tilton is barnstorming the country, outlining his proposal in speeches, interviews and employee meetings, and touting some promising statistics. United had the indust-ry's best on-time record and fewest cancellations in February. And, it had positive cash flow of US$1 million a day last month, versus the US$12 million a day it lost in January.
Even so, Tilton warned Friday that a war could force United to trim its schedules, impose more temporary concessions and lay off more workers. Such actions would come "only as a last measure, only as a last resort."
"I need my employees," Tilton said in the interview, "to do what they're doing to generate this performance."
Tilton also said Friday that the airline also would ask lenders to agree to delays in payments that United must make on US$1.5 billion in debtor-in-possession financing.
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