United names oil executive as new CEO

Sept. 2, 2002 at 7:59 PM
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CHICAGO, Sept. 2 (UPI) -- UAL Corp., parent company of United Airlines, on Monday named veteran oil executive Glenn F. Tilton its new chairman and chief executive officer.

Tilton, 54, vice chairman of ChevronTexaco Corp. and acting chairman of energy firm Dynegy Inc., was selected by unanimous vote during a Labor Day conference call of board members, the company said.

He replaces interim CEO Jack Creighton, who is retiring. The company also announced that President Rono Dutta and Chief Operating Officer Andy Studdert are stepping down.

In a statement, United said their responsibilities will be assumed by other executives. Tilton also was given the title of president, and United did not elaborate on other management changes.

The airline, based in Elk Grove Township, Ill., lost $2.1 billion in 2001 and has already lost more than $800 million this year.

Last month the airline warned it would be forced to seek Chapter 11 bankruptcy protection unless it obtains $1.8 billion in federal loan guarantees.

The Air Transportation Stabilization Board, the federal agency set up to bail out the airline industry after last year's terrorist attacks, has told United that it won't approve the loan without deep spending cuts.

"Our highest priorities must be to restore employee trust and revive investor and consumer confidence," said Tilton in a statement. "That means working cooperatively with all of United's stakeholders on a plan to address near-term financial issues and develop a much-needed, long-term strategy for the company's renewed growth."

In 2001, Tilton was named chairman and chief executive officer of Texaco Inc., the nation's second-largest oil company, shortly before it was acquired by Chevron Corp. He was named to Dynegy's board in January and became interim CEO in May.

Based in San Francisco, ChevronTexaco owns 26.5 percent of Dynegy.

Tilton's previous posts included president of Texaco USA, president of Texaco Refining and Marketing and head of Texaco's Global Businesses unit.

Tom Buffenbarger, president of the International Association of Machinists and Aerospace Workers, called the management shakeup an important step to protect the interests of the employee-owners of United. The union represents 37,000 United employees.

"This is an opportunity for United's new CEO to put in place a team capable of managing a multi-billion dollar employee-owned company," said Buffenbarger. "The last team forgot that our members own the airline, and that the employees are United Airlines' most important asset."

Creighton, the airline's former chief executive, set a Sept. 16 deadline for unions to agree on $2.5 billion in annual cost cuts for the next six years. Those cuts included $1.5 billion in wage and benefit concessions from the unions themselves.

The unions, which have two seats on the UAL board, oppose the proposed cuts.

"Our members worked hard and sacrificed for eight years to make United Airlines the country's number one carrier," said IAM District 141-M President Scotty Ford. "We need a CEO that can return the airline to that prominent position while improving labor relations and employee morale. We hope Mr. Tilton is that person."

Shares of UAL lost 18 cents, or 5.90 percent, to close Friday at $2.87 on volume of 2.9 million shares traded on the New York Stock Exchange. Stock markets in the U.S. were closed Monday for the Labor Day holiday.

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