United Airlines parent UAL Corp named Glenn Tilton, the vice chairman of ChevronTexaco Corp, president, CEO and chairman as it seeks to get employee concessions and restore profitability.
UAL board members unanimously approved Tilton's appointment, which is effective immediately, UAL said in a statement. The world's second-largest airline spent four months seeking a new leader to help the company avoid seeking bankruptcy protection.
Tilton, 54, replaces interim CEO Jack Creighton, 70, who took over when Jim Goodwin was forced out of the job last year by unions after he said the company may "perish" if it can't stem losses. UAL has asked workers at the employee-owned company to provide US$9 billion in concessions over the next six years.
"He doesn't seem to have a large history with labor unions and that's going to be key with United," said Deutsche Bank Securities analyst Susan Donofrio, referring to Tilton. Donofrio, who has a "market perform" rating on UAL and doesn't own the stock, said she's concerned about his lack of airline experience.
UAL President Rono Dutta and Chief Operating Officer Andrew Studdert resigned to allow Tilton to appoint his own senior managers, UAL said.
UAL had a loss of US$850 million in the first half of this year, mainly because of a drop in air travel and fares since the Sept. 11 terrorist attacks. A drop in business travel and rising labor costs hurt UAL before the attacks.
"Our highest priorities must be to restore employee trust and revive investor and customer confidence," Tilton said in a statement. Tilton declined to be interviewed, UAL spokesman Joe Hopkins said.
Tilton, who had been chairman and CEO of Texaco Inc, became vice chairman of ChevronTexaco last October when his company merged with Chevron Corp.
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