United Selects Oil Industry Exec Glenn Tilton as CEO

By Dave Carpenter
AP Business Writer
Monday, September 2, 2002; 4:50 PM

CHICAGO –– United Airlines named veteran oil executive Glenn Tilton as its new chairman and CEO on Monday, reaching outside the airline industry in its effort to keep the ailing carrier out of bankruptcy.

Tilton, 54, vice chairman of ChevronTexaco Corp. and acting chairman of energy marketer Dynegy Inc., was selected by unanimous vote of the board of United parent UAL Corp. during a special Labor Day conference call, the company said.

He replaces interim CEO Jack Creighton, who turned 70 Sunday and had signaled his wish last May to retire.

As part of the switch, United announced that president Rono Dutta and chief operating officer Andy Studdert are stepping down. Both had been under fire from the company's unions for more than a year.

The company said their responsibilities will be assumed by other executives but did not elaborate.

Tilton last year was named chairman and chief executive officer of Texaco Inc., the nation's second-largest oil company, shortly before it was formally acquired by Chevron Corp. He was named to Dynegy's board in January and became interim CEO in May. San Francisco-based ChevronTexaco holds a 26.5 percent stake in Dynegy.

His previous posts included president of Texaco USA, president of Texaco Refining and Marketing and head of Texaco's Global Businesses unit.

The other finalist for the United job — John Walker, a UAL director and CEO of Weirton Steel Corp. — also has no experience running an airline. United had no luck attracting an industry veteran in its four-month search.

Creighton has earned the respect of United's unions but expressed no wish to extend his acting tenure. A UAL board member, he took the post last October when James Goodwin resigned under pressure.

UAL has posted losses of nearly $3 billion in the past 18 months and has threatened to filed for Chapter 11 bankruptcy protection this fall if it can't cut costs dramatically and win a government loan guarantee.

"United is a company with tremendous strengths on which we can build," Tilton said in a statement issued by the Chicago-based airline. "But in the days ahead, all of us with a stake in United must work together to re-establish a competitive company with a prosperous long-term future."

Creighton, who had vowed not to preside over a bankruptcy filing, set a Sept. 16 deadline for unions to agree on $2.5 billion in annual cost cuts for the next six years, including $1.5 billion from the unions themselves.

A spokesman for the airline's pilots union, which holds a seat on the board, said Tilton's background and record "make it sound like he's somebody who could exercise some leadership and help us to move on."

"He gave the board the impression that he wants to try to lead us out (of financial trouble) without some sort of a court-imposed settlement, and that's good news," spokesman Herb Hunter said.

Analyst Ray Neidl said that despite Tilton's lack of experience in the industry, his selection as CEO demonstrates United's preference to avoid bankruptcy rather than restructure under a federal court's protection.

"The guy comes from a company that's made money and has been successful, and he will try to impose that same attitude at United," said Neidl, of Blaylock & Co. "But it's not going to work unless he gets union cooperation up front."

———

On the Net:

http://www.united.com