Forgive the poetic license, but reading about the unfolding battle for control of the Boardroom at United Airlines and, for whatever reason brains do what they do, mine turns to the 1973 song Ballroom Blitz.
And the man in the back said ‘everyone attack’ and it turned into a [boardroom] blitz.
And the girl in corner said ‘Boy, I wanna warn you, it’ll turn in to a [boardroom] blitz.
It is a public fight for control of a major US airline the likes of which have not been seen in decades. Two investment funds representing 7% of the outstanding shares of the company have put forward a slate of seven new Directors for the company’s board, seeking to effect massive change. Leading the list of nominees is former Continental CEO Gordon Bethune, and he doesn’t want to just be a Director; he won’t take the gig unless it is as Chairman of the Board. Indeed, in an interview with Bloomberg Bethune is blunt about the situation, “You can’t be effective as one guy unless you come in as chairman. I would not go, nor think about going in, just as a board member. I don’t need a job.”
I agree with that view, particularly given his history with the Continental half of the company. He is beloved by the vast majority of rank and file employees from the Continental side of the operation and for good reason. His approach to managing employees and handling the rebuilding of the company exiting bankruptcy in 1994 with aplomb. But bringing him back now, while the company still has a massive legacy UA v CO internal battle waging, would likely upset the recent changes for good which have been seen since Oscar Munoz took over as CEO. Moreover, Bethune has historically been spectacularly publicly supportive of the Board and the company; it is unclear where this newly shared lack of faith is coming from.
And then there’s his views on what it takes to be a solid leader of an airline. Here’s what he said roughly 14 months ago, in support of then CEO Jeff Smisek:
The constraints of the recent merger agreement did not allow the new CEO a free hand in making decisions about executive personnel or other strategic moves for two years. That was just a cost of getting an agreement. The agreement was vital to the long term viability of CAL. It needed to happen and so sacrifices were made.
While understandable,many employees were not accustomed to poor operational performance that were a result of less than optimum operational planning and decision making. Since the CEO and Chairman titles were consolidated, I have seen a significant improvement in the operation and so have most customers and employees. That allowed for a single voice for decision making…the way I enjoyed my time at CAL as both Chairman and CEO.
Having a single person as the Chairman and CEO was, in his own words, key to success in leading the company. It was key to allowing Smisek the opportunity to right the ship. But that seems to no longer apply for Munoz.
I understand that some investors are pissed. They want to make more money and the company’s stock is down 15% over the past 12 months, trailing JetBlue, Delta and Southwest. But I’m not convinced overthrowing the Board is the right way to get there. The company needs stability, not further volatility. Even if the cowboy leading the charge is so well respected in the industry and by the employees.
Also, Ballroom Blitz:
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