spin88

I hear you, but the stock will be under pressure until he goes. Oil price moves can swamp the fundamentals (see today where UAL with its supposedly "savvy" new planes got crushed worst of all). Its possible that the stock (which is priced to expect the profits to be more than 50% higher this year, with ain't gonna happen, will fall far more than 20% by the time he goes.

If I could time it, its a smart bet. But hard to buy just before he gets cannned.

CoMooter

+1

I have contacts inside Wacker Dr. and both have told me that morale throughout the company is about as low as it has ever been.

To them SMI/J is showing all the signs of a bitter, embattled leader - where he sees nothing but enemies on all sides. Contact with the shareholders, customers or line employees are the least of his concerns now. He barely interacts with anyone outside of his direct reports.

Any type of a leader would have used this event to engage and explain to those that are now so angry.

But, as we have seen from his other actions SMI/J is anything but a leader or visionary. He made a bet on where the industry was headed (i.e, the lowest common denominator) and lost. He cared little about legacy Customers or employees and thought the magic of the balance sheet was the key. Too much lawyer/finance guy, not nearly enough of a line manager/ops guy.

The general feeling is that SMI/J is now just trying to extricate himself from this mess with his pockets as filled as much as possible and something resembling any kind of respect before he is shown the door. There is little to nothing he can do for UAL now (except allow his flunky direct reports to run it even further into the ground), nor will he be running any other major Corporations in the future.

SMI/J was a horrible choice to lead this firm through the merger. Someone like Gordon, CrAAndall or Herb probably could have pulled it off considering what they started with, but SMI/J never seemed to pick up what made CO come back so well from the brink.

The Hedgies and Institutional's will call the shots on this one (the BOD appears to be composed of useless flunkies and lackies to allow things to get this bad) as to the exit package/resignation, but I would be very surprised if SMI/J makes it to 4Q14 in his current position.

channa

Part of the reason a lot of analysts are bullish on UAL is there's more upside to UA if they fix the place up.

nerdbirdsjc

I think the end of the year or early 2015 is more appropriate. Most good potential replacement CEOs will have zero desire to be greeted by incomplete merger-related labor negotiations or major system cutovers coming through the door, and these items likely won't fully play out until the end of the summer or well into the fall.

channa

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There is littl likelihood of the labor relations working themselves out while Smisek is at the helm.

fastair

Not that anyone expected a change, but Smi/J had about 1.5x as many "no" votes to get reelected to the BoD as most of the others on the board. (Vitale <President of Chicago Board of Education> was up there too.) http://biz.yahoo.com/e/140612/ual8-k.html

dank0014

That's not going to matter since he has still way too much control over that decision. It was a mistake on behalf of UA after the merger to give him a seat on the board as part of his offer. He's got the majority of the board members wrapped around his fingers.

Passmethesickbag

Any hope of him opting out of showing his face in the safety video then?

airplanegod

I know Jeff mentioned he also flew on the competition in both classes. Just curious when he flies UA does anyone know if he flies E-, E+, or Business/First?

dank0014

Can vary, there is a thread about seeing him on board

I've ran across his twice at ORD, but so far never the same flight.

JBord

This is a spot-on observation.

I've seen this with CEO's a couple of times. First time, was a long time CEO who was allowed to announce his retirement. He was very well liked, just couldn't guide the company through a big change.

Second time the CEO holed up and didn't communicate to anyone but direct reports for nearly a year, but she managed to pull the company out of a bad financial situation, and is still in place.

I believe, similar to you, that he's out around the time of the Q3 earnings call. He knows he's in trouble.

entropy

Its worth noting that the election results have similar 'Da' rates to North Korea and Libya.

The fundamental responsibility of the board is to hire and fire the CEO. This board seems grossly incapable of that.

boolean64

two questions arise from this...

1) what did he fly as "competition" internationally? If interntinally he only flew an old AA bird and LH, then he probably doesn't realize how far behind UA is.

2) interesting to note "both classes" I find it hard to believe he's never experienced F on LH or an asian carrier. But it is telling that he thinks about 2-class.

dank0014

I don't think so. I think at this point, if the board is smart, use Jeff to do all the ugly stuff now and then start fresh sometime mid-next year at the earliest.

There is two things they are hoping for: 1) Jeff can turn it around, or 2) If he isn't able to turn around that he takes all the crap for doing the dirty job so that the new CEO can win morale over. If it's the latter, the dirty work will not be done by Q3, it's still quite a ways out.

Why bring a new CEO into this mess to have them lose trust so quickly and then have to bring another new CEO in and ramp up within 1-2 years.

CO_Nonrev_elite

It would be interesting to know if he flew the good planes or bad planes. If he flew the newer AA service on the 777, he must have crapped his pants like the person in the other thread.