The Pack Is Watching UAL's Chief (Pt. 2)

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The Pack Is Watching UAL's Chief
(Page 2 of 2)



Mr. Tilton said publicly when he joined the airline that it could remain solvent, though privately, friends say, he had no illusions about United's eventual fate. Even with a federal bailout, a bankruptcy was probable. Analysts criticized him for not being more visible in his first weeks at United, when it was lobbying for federal loan guarantees amid strong opposition from other airlines.

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Instead, he spent the time meeting with employees, trying to gain their trust for the rough days he knew were ahead.

"He genuinely does care about people and wants them to be his partners," said Elizabeth P. Smith, who worked with Mr. Tilton for years at Texaco and was vice president for investor relations while he was chief executive there.

Even if United seeks permission to abrogate the labor pacts, Ms. Smith said she expected Mr. Tilton to continue negotiating until the May 1 deadline that the airline faces for replacing $1 billion in temporary concessions with real cuts.

"He would bend over backwards and go up to the last second trying to explain to you how important it is to be a partner," she said. "He's not the one to use that big stick if he doesn't have to."

But if time expires, Ms. Smith added, Mr. Tilton will not hesitate to impose his plan on the unions. "He's a gutsy guy," she said, "and he will do what needs to be done."

SOME experts still doubt his strategy, particularly the plan to start a low-fare airline. "The track record of carved-out carriers and airlines-within-an-airline is dismal," said Robert W. Mann Jr., an airline industry consultant based in Port Washington, N.Y. Union leaders say it will result in a second class of workers with lower wages and benefits than those at the parent airline.

Mr. Tilton is barnstorming the country, outlining his proposal in speeches, interviews and employee meetings, and touting some promising statistics. United had the industry's best on-time record and fewest cancellations in February. And, it had positive cash flow of $1 million a day last month, versus the $12 million a day it lost in January.

Even so, Mr. Tilton warned Friday that a war could force United to trim its schedules, impose more temporary concessions and lay off more workers. Such actions would come "only as a last measure, only as a last resort."

"I need my employees," Mr. Tilton said in the interview, "to do what they're doing to generate this performance."




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