Ulrich Bremi, who oversaw Swiss Re, appointed some of Switzerland's top executives and ran the country's parliament for a year, set out two weeks ago to rescue the national airline with the help of local companies and banks.
Instead, Swissair grounded its flights for two days last week because it didn't have enough money to pay for fuel. Finance Minister Kaspar Villiger made a US$278 million emergency loan to get the airline flying for the rest of the month. Villiger and Marcel Ospel, the chairman of Switzerland's largest bank, UBS AG, traded barbs over who was responsible for the failure.
The collapse of the 70-year-old airline and the public recriminations that followed surprised the Swiss, who are used to business leaders stepping in when companies are ailing and enjoy a reputation for discretion and financial security.
``It's a shock that the people in charge weren't able to avoid the worst-case scenario,'' said Urs von Arx, a fund manager at Pictet & Cie, a Swiss private bank, who was stuck in Geneva when Swissair halted flights Tuesday.
In Switzerland, where 7 million residents have the third- highest standard of living, executives cooperate to rescue troubled companies.
Management consultant Nicolas Hayek and banks financed and merged the two largest watch companies, Asuag and SSIH, in the 1980s when they were about to collapse. The company is now known as Swatch Group, the world's biggest watch maker.
Adecco, now the world's largest temporary employment agency, was saved by Switzerland's banks and financier Klaus Jacobs in 1993. Jacobs took over after he sold his Jacobs Suchard AG chocolate empire to Philip Morris Cos.
Former Credit Suisse Group Chairman Rainer Gut, Roche Holding AG's previous chief executive, Fritz Gerber, and entrepreneur Ulrich Albers rescued Grasshopper Fussball AG, Switzerland's biggest soccer club, by putting up 5 million francs two years ago.
That's why the failure of the US$1.8 billion Swissair bailout was such a shock.
``It's a disaster for Switzerland,'' President Moritz Leuenberger said at a briefing in the capital city of Bern.
Swissair's debt swelled as part of former CEO Philippe Bruggisser's growth strategy. He purchased minority stakes in foreign airlines including Sabena SA, the Belgian airline that has made a profit once in 40 years, to expand abroad. Swissair also added hotels and catering businesses, piling up debt that now amounts to SF17 billion.
Bruggisser resigned in January and nine of 10 board members quit three months later. Record losses of US$1.8 billion last year, compounded by a slump in air travel following the Sept. 11 terrorist attacks in New York and Washington, drained cash.
Bremi, 72, was plucked by Villiger because he's one of Switzerland's most experienced leaders. While in parliament for 25 years, he campaigned for lower taxes. Bremi helped lead negotiations among the government and industrial companies in 1997 to set up a compensation fund for Holocaust victims. At Swiss Re, he once hired Lukas Muehlemann, who is now Credit Suisse's chairman and CEO.
Bremi was supposed to convince Credit Suisse and UBS, whose board includes a former Swissair chairman, to bail out the airline.
The plan failed. UBS and Credit Suisse announced Monday they would buy the most efficient parts of the airline for SF259 million (US$160 million), take control of its planes and routes and put the rest into bankruptcy.
Swissair, which has won the Leading European Airline award five times, didn't get the money fast enough and stopped flying for the first time since World War II. The company's 63,000 shareholders saw the value of their stock drop 86 percent this week. Unions say 10,000 jobs may be lost.
Canceled flights stranded 19,000 passengers. The carrier didn't pay for customers to eat at airport cafes. Travelers were offered cots in Zurich Airport's basement nuclear fallout shelters Tuesday night.
``The way the Swissair rescue plan was implemented and the unspeakable chaos it created is beyond description,'' said Neue Zuercher Zeitung, Switzerland's most influential daily paper.
The confusion was fed by a public spat between UBS and the finance ministry.
Villiger blamed UBS's Ospel for triggering the cash crunch and said the bank leader refused to take his phone calls Tuesday as the airline ran out of money.
The next day, Ospel said Villiger's comments were ``far from the truth'' and blamed Swissair's management, saying the company ignored warnings about its swelling debt and failed expansion plans.
UBS and Credit Suisse are feeling the backlash as some retail customers close their accounts in protest. Others are just sorry that Swissair, which has been flying under the Swiss flag logo for more than 30 years, may be no more.
``It's as if a close relative has died,'' said Roesli Wenger, a former nurse from Bern.
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