United unions look to replace Tilton

[Hatu]

CHICAGO, Feb 20 (Reuters) - Leaders of the pilots and machinists unions at United Airlines have been talking to potential investors in an attempt to get a bankruptcy judge to replace Chief Executive Glenn Tilton, Business Week reported in its latest edition released on Thursday
According to the article, Tom Buffenbarger, president of the International Association of Machinists, and Paul Whiteford, head of the Air Line Pilots Association (News - Websites), have been talking to former United CEO Gerald Greenwald, as well as David Bonderman and his Texas Pacific Group (News - Websites), George Soros, Marvin Davis, the Blackstone Group, and several state pension funds.
Union officials and potential investors told Business Week the unions'' goal was to find a partner and go jointly to U.S. Bankruptcy Judge Eugene Wedoff in the next few weeks with a competing recovery plan for the airline.
http://biz.yahoo.com/rf/030220/airlines_united_1.html

 

[UnitedChicago]

Oh lord. I really don't know whether to say the union leadership still thinks that time is a luxary or go union leadership.

If they can get a top shelf venture or investment firm to back them (ie. Texas Pacific Group) then I say go for it - as long as it's put forth within days, hours at best.

Otherwise, come together for christ sake because time is truly not on anyone's side at United.

 

[DB Cooper]

BW Online


MARCH 3, 2003

NEWS: ANALYSIS & COMMENTARY

The Dogfight for Control of United
Labor is trying to line up financing--and outmaneuver the CEO


Can beleaguered UAL Corp.'s United Airlines Inc. (UAL ) be saved from going out of business altogether? Ever since the carrier entered bankruptcy in December, CEO Glenn F. Tilton has been under attack by skeptics who say his recovery strategy isn't viable. As the airline burns through $10 million a day, United needs a new flight plan fast.

Now United's unions are taking matters into their own hands. BusinessWeek has learned that Tom Buffenbarger, president of the International Association of Machinists, and Paul Whiteford, head of the Air Line Pilots Assn. at United, have been talking to former United CEO Gerald Greenwald and other potential investors in a desperate attempt to get the bankruptcy judge to replace Tilton's team with a new crew. Labor is also talking to David Bonderman and his Texas Pacific Group, George Soros, Marvin Davis, the Blackstone Group, and several state pension funds. The unions' strategy: find a partner and go jointly to Judge Eugene R. Wedoff in the next few weeks with a competing workout plan, say union officials and potential investors. They're hoping that the judge, who has criticized UAL management for not having a workable recovery plan, will agree.

If Judge Wedoff sides with the unions, they intend to quickly return to the federal Air Transportation Stabilization Board to ask for a bailout loan. In December, the board rejected United's application after concluding that Tilton's plan wasn't credible. "We're looking for the right group that can assure a future for United Airlines," says Gregory E. Davidowitch, president of the Association of Flight Attendants' United chapter. With his job on the line, Tilton will no doubt try to head off such an alliance. Says a United spokeswoman: "We're working hard with our unions to allow United to emerge from bankruptcy." Failing that, however, Tilton could ask Wedoff to abrogate the unions' labor contracts and force $2.5 billion in concessions on them.

Still, a new chief wouldn't save the unions from large cuts. The board rejected Tilton's loan request partly because his cutbacks didn't seem drastic enough. What most irks unions is Tilton's plan to launch a discount airline to take over many United routes because it would be staffed with lower-paid workers. Union officials point out that most major carriers, including United itself, already have tried that idea unsuccessfully.

Greenwald is labor's favorite would-be savior. The unions brought him in as CEO in 1994, when employees bought 55% of the company. The carrier flourished for several years and many workers look back on those years as golden ones. Greenwald, who left on a high note, is currently managing partner of Greenbriar Equity Group LLC, a venture fund in Rye, N.Y., with $700 million in capital to invest in transportation.

Under recent talks with union officials, Greenwald, now 67, would take over as a nonexecutive chairman and bring in new capital and management. He and the unions floated a similar plan last summer. But UAL's board wanted a fresh face and went with Tilton instead. Now the unions want Greenwald to take control, though so far he hasn't agreed. "He doesn't want to roll up his sleeves and run the company day to day," says a union official.

That's why Bonderman's group may be more realistic. Labor likes his work in salvaging Continental Airlines Inc. (CAL ) and America West Airlines Inc. Bonderman, in this scenario, would head the equity investors and name a CEO. He is said to be assessing candidates in the industry and elsewhere, as he considers getting involved.

Any buyer who does emerge will need money by the planeload, which is where labor thinks public pension funds could play a role. A new investor may need $1.5 billion to buy out the banks that put up debtor-in-possession financing. Plus, the carrier could remain short of operating funds even after labor cuts.

So why would any financier want to dive into United now? Investors with big egos and deep pockets have in the past made money at airline turnarounds. At the right price--and with the right package of cuts--they believe United can again fly profitably. For now, though, insiders say none of the possible bidders has put forth a new strategy. Anybody out to save the day had better come up with a plan mighty quick.

By Aaron Bernstein in Washington and Michael Arndt in Chicago

 

[wts54]

"We're working hard with our unions to allow United to emerge from bankruptcy." Failing that, however, Tilton could ask Wedoff to abrogate the unions' labor contracts and force $2.5 billion in concessions on them."

What a liar the iam and ual talks broke last week over
the companies unwillingness to bargain at all over anything.Anybody from alpa or afa know anything about
their respective meetings about their contract??

 

[airknocker]

Be careful! Dave Bonderman of TPG is a good buddy of Dave Siegal of U, look out!

 

[rotate]

Yeah. Bonderman and Davis will become the new "friend of labor" and Greenwald wants to spend the rest of his retirement wearing the "hairshirt" at United. Yeah, right.

These guys are on halucinaginics and are suicidal.

For those of you old enough to remember pinball machines: TILT

Game over.

 

[wts54]

rotate, i love the tilt game over quote
so true.

 

[johnny gearpin]

TILT! This is very funny. I am a big fan of Pinball.

Glad to be out of there. Good Luck to all of those left.

 

[nw_a330]

Tick-tock, tick-tock, tick-tock . . .

The Grim Reaper (aka Chapter 7) is calling . . .

 

[ual747mech]

"Relax y'all." UAL union exec denies plans to oust Tilton.

http://www.chicagobusiness.com/cgi-bin/pri...pl?news_id=7995

Here's another denying report.

http://www.iam141m.org/united.htm

February 21, 2003
Machinists Respond to BusinessWeek Article

General Vice President Robert Roach, Jr. of the International Association of Machinists and Aerospace Workers (IAM) issued the following statement today in response to an article in the March 3, 2003 issue of BusinessWeek magazine:

“The BusinessWeek article regarding United Airlines is more fiction than fact. Using unnamed sources with highly questionable motives, the story draws erroneous conclusions based on assumptions.

We are engaged in direct negotiations solely with United Airlines in an effort to protect our members’ employment and enable the company to successfully restructure and emerge from bankruptcy.

The Machinists Union has not approached any other party regarding United’s restructuring, however many potential investors have approached us. Those proposals we consider credible have been passed on to United Airlines' management.

We continue to work collaboratively with United's management to reach an agreement that will help create a stronger company with more stable, long-term employment opportunities for our members.â€￾

 

[prechilill]

Perhaps the union leaders (ALPA and IAM) know something is up regarding liquidation. Wooing someone like Bonderman may be their last ditch effort to avoid the inevitable liquidation. With so many nuances coming in from different sources about the plight of UAL, the picture seems pretty bleak, especially in light of what Whiteford and Buffenbarger are talking about now. Something is up.

 

[ual747mech]

[blockquote]
----------------
On 2/21/2003 9:01:45 AM johnny gearpin wrote:

Glad to be out of there. Good Luck to all of those left.
----------------
[/blockquote]

"Thx, good luck to u 2 Johnny."

 

[dfw79]

I can just wait for the press release "UAL Corp. Hires Rakesh Gangwal and new CEO." Wouldn't that be interesting.

 

[Tim47SIP]

Thats the way to do it! Every time you don't hear what you want, just fire the guy. That way, you only hear what you want to hear. Now I have got it!
It is just that simple!!

My guess is that the unions must be much smarter than any CEO ever dreamed of, but just want to keep a low profile so that all of those groupies don't swarm them.

I wonder if the unions pushing these issues and delaying the inevidable realize that "IF" U.A. goes under, those unions will also go under due to credibility.

 

[L1011Ret]

Yes, it certainly sounds like they don't want to hear anything the CEO has to say nor do they like management's plans. Shoot the messinger when you don't like his message. But the end result is you will find you have shot yourself in the foot!