Editorial: Glenn’s gotta go at United

Posted by admin on August 26, 2009

There has been a lot of stuff out there written about United Airlines, and most of it isn’t positive. We’re all familiar with the United Breaks Guitars video (the second of three is out on YouTube, by the way), and the infamous “Untied” complaint website has been a thorn in the airline’s side for many years now. I was on the website of United’s Association of Flight Attendants the other day when I came across an account of how AFA members picketed the airline’s 2008 shareholder meeting. I figured that it would be another story about angry union protesters, but then the last part of the article caught my attention:

The worst part of the meeting was when Los Angeles Customer of the year, James Anderson, stepped up to the microphone and respectfully addressed [United CEO Glenn] Tilton as a shareholder and a loyal customer who spent $100,000 at United just last year. Employees clapped and cheered for Mr. Anderson. He explained to Tilton that he felt caught in the middle of all of this and expressed concern about the discord at the meeting and the state of employee morale at the airline. He questioned whether he should continue to buy tickets on United Airlines. Tilton shrugged his shoulders and told him it was his prerogative if he wanted to take his business elsewhere but that it was going on at every airline in the industry – so where would he go? There was a shocked silence from the room and Mr. Anderson seemed bewildered at having been so easily dismissed. He paused before quietly stating, “What I’m trying to say is that I’m concerned about this. You talked about aircraft enhancements in your presentation – and they’re great – but they don’t put smiles on the faces of your employees.”

I haven’t been able to independently verify the above story, and an email I wrote to the AFA requesting further details remains unanswered. But if the story is true (and I have no reason thus far to believe otherwise), then Tilton should be ashamed of spouting that kind of crap. First of all, it’s not going on at every airline in the industry. And secondly, what kind of CEO, airline or otherwise, tells one of his best customers to go ahead and shove it? Maybe if you’re Michael O’Leary, CEO of Ryanair. But O’Leary can do so because his airline’s fares are so low that people will always come back, regardless of service. If the price is right, service doesn’t really matter. But United’s no Ryanair, and the airline can’t afford to alienate key customers (let alone the rest of us).

That’s the attitude that Glenn Tilton conveys – we don’t really care about you. And you know what? Chances are that attitude is going to trickle down to the rest of the employees. And while I know that there are thousands of United employees that take pride in their work and do their best, I’ve also experienced a lot of less-than-stellar service on United. And you can’t really blame them too much, either. I’d probably be pretty cranky, too, if my pay and benefits were slashed while Tilton & Co. raked in the dough. A great article over at Forbes, entitled “United Airlines Shows You How Not to Run Your Business,” has this to say regarding employee morale:

United’s workers… have had their wages, pensions and benefits cut even as the chief executive officer has been paid nearly $20 million dollars over the last five years (despite United’s stock dropping 43% during his tenure)… All employees share the pain equally. If there are big cutbacks anywhere, senior management should take substantial pay reductions and limits on its privileges, such as fewer business class flights and trips on private jets. The troops look to senior management for direction. If those troops see the top brass caring for itself at the expense of others, the spirit of the entire organization erodes.

And there you have it. It’s no secret, Glenn – perhaps you should look across the Pacific at another airline that’s in trouble. JAL has been bleeding red ink as of late (posting a $1 billion Q2 loss). But their CEO takes the city bus to work and gives himself just $90,000 a year in salary (less than the pilots make), as CNN reports:

United’s long-running financial troubles show no sign of abating. Tilton’s strategy has been to try to polish up the airline enough to sell it off or merge it. Delta was always seen as the likely choice, but it opted for Northwest. And Continental figured that it would be better to just “remain good friends” with United (as evidenced by the new alliance between the two airlines) rather than a full merger. Nobody wants United, and that throws a wrench in Tilton’s plans. United’s fleet of planes is starting to get a little long in the tooth, and despite the airline’s recent talk about shopping around for a big airplane order, it’s clear that the airline would have a difficult time obtaining financing. As is pointed out in this Chicago Business article, United has billions in debt, and Tilton’s already burned most of the furniture already. There’s not much left.

Which means, quite simply, that it’s time for Glenn Tilton (and probably a lot of the rest of UAL management) to go. I don’t want to play armchair CEO, but it’s clear that whatever’s going on in Chicago needs to change, and change soon. Times are tough, sure, and everyone’s hurting. But United has consistently been a loser in many categories – financial performance, customer service, etc. Firing Tilton wouldn’t fix all of these problems overnight, but it would be the first major step on United’s much-needed road to strength and stability.

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