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AMR Board Member To Ask Replacement Of CEO Carty - MSNBC
NEW YORK (Dow Jones)--A prominent AMR Corp.(NYSE:AMR) (AMR) board member is seeking replacement of Chairman and Chief Executive Donald Carty, but not all-out resignation, MSNBC reported Thursday.
Former U.S. Sen. David Boren, R-Okla., said Carty has a credibility issue, MSNBC said. Boren now serves as president of the University of Oklahoma, a state where AMR''s American Airlines is a prominent employer.
Boren''s comments came as AMR''s board met to consider Carty''s fate along with a possible bankruptcy filing as management tried to assuage labor leaders angry over executive perks that could scuttle cost-cutting agreements reached last week.
Boren said most directors had been led to believe that the chairman and CEO had disclosed executive bonuses to union leaders before employees approved $1.8 billion in annual concessions, the AP reported.
Mr. Carty has lost the credibility and trust necessary to effectively lead the company through challenging times, Boren told the Tulsa World.
A spokesman said American had no comment on the Boren''s remarks.
On Wednesday, AMR reported a worse-than-expected $1.04 billion first-quarter loss, and Carty and other executives met with union leaders in an effort to salvage the concessions deals, which American says it needs to avoid bankruptcy.
Employees remain angry after learning late last week about executive bonuses and pension payments that would be protected in bankruptcy. Two of the three unions now want new votes on concessions that Carty insists are necessary to ward off a Chapter 11 bankruptcy filing.
Analysts say the labor unrest has increased pressure on the company''s board of directors to remove Carty.
U.S. Rep. Martin Frost, D-Texas, and Rep. Pete Sessions, R-Texas, both said a possible bankruptcy filing would be on the board''s agenda Thursday. The meeting time was as yet undetermined.
If it is left unresolved, there''s a pretty good chance the board will approve a Chapter 11 filing, Frost said.
A person involved in Wednesday''s negotiations, who spoke on condition of anonymity, said American was considering sweetening its original offers to the unions to stop new elections or to speed up the voting process.
Unions representing flight attendants and ground employees were planning 30- day elections, while the pilots'' union is threatening to withhold formal approval of its earlier vote.
The quarterly loss was equivalent to $6.68 a share, compared with a loss of $ 1.56 billion, or $10.09 a share, in last year''s first quarter. Analysts surveyed by Thomson First Call had expected a loss of $6.08 per share, or $948 million.
Carty blamed the first-quarter results on weak travel demand caused by the sluggish economy, war in Iraq and the SARS outbreak. He also said high fuel prices and low fares contributed to results that were truly dreadful.
All told, it''s a perilous climate and our success is far from assured, he said in a statement.
None of American''s unions have demanded Carty''s resignation, but some members of the pilot''s union board believe the CEO should go, said spokesman Steve Blankenship.
We''re not having to do much. This guy is setting himself up to fail, Blankenship said. The issue is clearly on the AMR board''s shoulders.
Carty has apologized for not disclosing the executive perks sooner. The company canceled the bonuses but not the $41 million in pension funding for 45 executives.
NEW YORK (Dow Jones)--A prominent AMR Corp.(NYSE:AMR) (AMR) board member is seeking replacement of Chairman and Chief Executive Donald Carty, but not all-out resignation, MSNBC reported Thursday.
Former U.S. Sen. David Boren, R-Okla., said Carty has a credibility issue, MSNBC said. Boren now serves as president of the University of Oklahoma, a state where AMR''s American Airlines is a prominent employer.
Boren''s comments came as AMR''s board met to consider Carty''s fate along with a possible bankruptcy filing as management tried to assuage labor leaders angry over executive perks that could scuttle cost-cutting agreements reached last week.
Boren said most directors had been led to believe that the chairman and CEO had disclosed executive bonuses to union leaders before employees approved $1.8 billion in annual concessions, the AP reported.
Mr. Carty has lost the credibility and trust necessary to effectively lead the company through challenging times, Boren told the Tulsa World.
A spokesman said American had no comment on the Boren''s remarks.
On Wednesday, AMR reported a worse-than-expected $1.04 billion first-quarter loss, and Carty and other executives met with union leaders in an effort to salvage the concessions deals, which American says it needs to avoid bankruptcy.
Employees remain angry after learning late last week about executive bonuses and pension payments that would be protected in bankruptcy. Two of the three unions now want new votes on concessions that Carty insists are necessary to ward off a Chapter 11 bankruptcy filing.
Analysts say the labor unrest has increased pressure on the company''s board of directors to remove Carty.
U.S. Rep. Martin Frost, D-Texas, and Rep. Pete Sessions, R-Texas, both said a possible bankruptcy filing would be on the board''s agenda Thursday. The meeting time was as yet undetermined.
If it is left unresolved, there''s a pretty good chance the board will approve a Chapter 11 filing, Frost said.
A person involved in Wednesday''s negotiations, who spoke on condition of anonymity, said American was considering sweetening its original offers to the unions to stop new elections or to speed up the voting process.
Unions representing flight attendants and ground employees were planning 30- day elections, while the pilots'' union is threatening to withhold formal approval of its earlier vote.
The quarterly loss was equivalent to $6.68 a share, compared with a loss of $ 1.56 billion, or $10.09 a share, in last year''s first quarter. Analysts surveyed by Thomson First Call had expected a loss of $6.08 per share, or $948 million.
Carty blamed the first-quarter results on weak travel demand caused by the sluggish economy, war in Iraq and the SARS outbreak. He also said high fuel prices and low fares contributed to results that were truly dreadful.
All told, it''s a perilous climate and our success is far from assured, he said in a statement.
None of American''s unions have demanded Carty''s resignation, but some members of the pilot''s union board believe the CEO should go, said spokesman Steve Blankenship.
We''re not having to do much. This guy is setting himself up to fail, Blankenship said. The issue is clearly on the AMR board''s shoulders.
Carty has apologized for not disclosing the executive perks sooner. The company canceled the bonuses but not the $41 million in pension funding for 45 executives.
