spin88

I think you draw the wrong conclusions. Anderson (new to DL) hired/retained the best, ended up with a team with two from NW, two from DL, and two (including himself) from elsewhere in the top spots. Having different views avoided group think, and allowed the adoption of the best practices. Under Jeff, while some sUA folks had top spots at first, Jeff set out to impose the CO way and force out the sUA folks. He tried to create what you advocated for, and finally got it at the end, having run United into the ground. Savvy...

First time I saw Jeff in the video, it was clear to me doing a 5 second diagnosis that he was creepy and a narcaissist. Also totally dishonest. I think my take was the take that employees had. I know its hard for those in management to see it this way, but if line folks don't respect the guy at the top - and no one respected Jeff - it is not gonna work out.

+1, as good as the e145 comment

I see this all the time in Asia, often with even bigger spreads. UA is now getting bottom basement fares, usually $100 cheaper than its *A peers, and more for good quality competitors. This is what poor product and service get you after a while. No on in HKG will fly on UA, so they need to offer cheap seats to attract the kayak crew who has not yet experienced UA's "savvy" service to fill the plane.

BearX220

When I shop for transcons now United typically comes up cheapest by a long shot. I just bought early October one-ways SEA-SFO-BOS for some relatives for $130 AI apiece. That's pretty unheard of. (I don't buy United for myself unless as a last resort. I have to get where I'm going within 24 hours of starting out as a rule.) You have to conclude general unreliability and bad word of mouth is finally costing them.

5khours

Yes

EWR764

I take it as a tacit admission that the former leadership had become tone-deaf with its employees, and this roadshow, if anything, is at least a gesture to demonstrate to the people of United that he is serious about changing the (toxic) culture.

I have to disagree with you, though, and I believe it is telling that after being on the board so long, the new CEO's first step is to attempt to reestablish credibility of management and begin to earn back the respect and trust of the employees. He obviously believes employee relations have become a major, existential threat to United, and kudos to him for understanding that nothing will improve until he solves the people problem at this company.

It's a page straight out of Bethune's playbook, and say what you want about his personality or record at Continental, but his reputation among employees was and is unassailable. His people deeply respected and trusted him as a boss, and that type of leadership style is desperately needed at UAL. Smisek may have gotten his airline start in the Bethune stable, but by 2015, it is abundantly clear that he cultivated a style of his own, and, as they say, "the proof is in the pudding."

spin88

I 100% agree with this view, and had no problem with the tone of his letter. At the board level - and it appears to be so with this guy - on non-active boards, the details don't get passed on, but the board member understand the issues broadly. Here he clearly sees a toxic corporate culture to have developed, and knows that to get labor issues fixed he needs to attack that first.

LPDAL

"Might as well be" means nothing, no official announcement has been made, and the product still exists on a large scale. Nor does differentiation discount the fact that GlobalFirst still exists.

John Rainey and Jeff Smisek may have made references to the product being obsolete in favor of enhanced business class service, however, neither of their statements include any hard date for retiring of GlobalFirst or the 744s. So it is outright incorrect to claim that there is "No more GlobalFirst" when it is actually abound throughout United.

-LPDAL

exerda

I know UA will continue to lobby (they have to), but I'll be interested to see if the new leadership stops trying to blame everything on "the government." It really seemed like Smisek was whining about taxes & fees & regulations at every appearance.

Well, the rest of the US industry faces those same fees & regulations, and vis-a-vis foreign carriers, all you can do is lobby Congress (and maybe look at what you can do to compete absent utter protectionism). Whining about it all the time doesn't get you anywhere.

wcalvert

My friend was on an EWR departure this morning and said no Smisek on the safety video.

Wow, that was fast.

FlyWorld

I appreciate this perspective and will keep an open mind.

The question weighing most heavily on me right now is this:

How much of this disaster was attributable to Smisek and how much to the board?

Wasn't it basically this same board that fired Larry and put Smisek in control of Continental in the first place?

minnyfly

The necessary dirty work to bring UA in line with the market is largely done. Some of it did have to be a "war on customers". Because if UA kept acting like a premium product in a market that demands LCC prices, UA would have been sunk. UA has some work to do, namely the labor groups, but the major tough changes in the fleet, labor, hard product, soft product, and IT are mostly done. Jeffy did his ugly job, walks the plank, and lets the new CEO take the credit. The new CEO has a good framework to work with to keep UA on the upward track. If he can get the FAs and mechanics on board and improve operational performance, UA is in a great position now and for the future.

Silver Fox

Joy of joys! He has always looked like a creep.

cerealmarketer

Anderson got to choose his key operational players before the merger was announced - he recruited them to Delta beforehand - and didn't have to pick on the spot.

Just IT and legal were in place on the NW side.

UA/CO ended up doing a shotgun wedding after the announcement - and had a board designed 50/50 split between UA and CO, which resulted in a 50/50 senior management team from the start.

Big difference.

Delta / NW was in the works for a longer period of time than UA/CO ever was.

DL/NW was a romance, engagement, wedding.

UA/CO showed up to Vegas to get a marriage license.

Time and again it's been shown that mergers that pretend to be of 'equals' are more likely to underperform. What competitor sees another as an equal? Daimler Chrysler, Thomson Reuters, NBC Universal, Citibank / Travelers...it goes on...

I do wonder why UA didn't insist on having its leadership run the show - after all they owned 55% of the company.

But guess they weren't strong enough at the time to dictate. And we got a marriage of two insecure people.

aacharya

He's no longer the CEO. So I imagine the engineers figured out something overnight. It's one thing to have his face in Hemispheres (folks tend to forgive outdated printed matter)- it's another to have it on a daily visual basis.

EWR764

That was probably the best move the Board could have made at the time. As a relatively small player (with two desirable pieces... the IAH Latin network and the EWR hub), a boatload of debt, dim prospects of an AA+CO merger passing regulatory muster without significant divestitures and an even dimmer outlook as a standalone carrier post-merger mania, Continental had to merge, and it had to merge with United. That deal preserved billions of dollars of shareholder value in the combined entity and, despite the integration problems, set both companies up on a long-term path toward success, if properly managed.

Larry didn't want to merge, and while I'm sure he understood that CO was going to become increasingly marginalized in the 2010-onward timeframe, I doubt he wanted any of the blood on his hands that a merger would bring. The bottom line is that, in a consolidated industry, CO would have been staring a third Chapter 11 in the face by now, if not sooner. On the other hand, United would have gone off with US as soon as CO walked, and Doug Parker would be running the show in Chicago. Any divergent interpretation is, I believe, revisionist history.

I'm not sure they wanted to. Tilton certainly did not want to remain in a leadership role. By 2010 the United management team was on board with Tilton's ultimate strategy... polish UAL's existing gold-plated assets (there were many) up for a merger, hide any skeletons in the closet, and leave the inevitable integration mess for the next leadership team to deal with.

JBord

^^^ Thank you for posting this!

IMO, this is the best thing Munoz can do, set a different tone. CEO's don't really have the direct impact on day to day things as people here tend to believe. If he sets a better tone, employees will know that customers are important and they won't be afraid to help them. And his direct reports will know that they come to him with ideas that aren't only about cutting cost.


I don't think this is a fair statement.

First of all, it's very common for a new CEO to say they will spend time understanding the company before making changes. It's actually a very strong leadership tactic, and builds confidence in employees. And some CEO's actually mean it. Think if you got a new boss and his/her first move was telling you what to do differently and changing everything. You wouldn't trust that boss. But if they listen and learn first, you would likely gain a ton of respect and be more likely to trust their decisions.

Second, it's not fair to think that board members know all the details of a business. Their job is to provide direction to leadership, sort of as a checks and balances process for shareholders. It's likely Munoz understands some of the big issues (Ops performance, financials lagging the industry, customer loss, etc.), but he may not know exactly how to fix those issues yet. As a board member who spends a few days a year with UA, you shouldn't expect him to.

I don't know if he'll be good or bad, but let's not judge him yet.