United’s Tilton Leads the Airline Out of Bankruptcy
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

ELK GROVE, Ill. – United Airlines lawyers converged on bankruptcy court two weeks before Christmas 2002 to begin what would prove a long and grinding reorganization that would cost thousands of jobs, eliminate pensions, and land yet another haymaker on reeling employee morale.
At the same time, however, a tall and cheerful marketing guy was working the long corridors of Chicago O’Hare International Airport, shaking hands and spreading cheer to United employees and holiday travelers.
Industry observers thought that United Chairman Glenn Tilton, hired only three months before and with zero airline experience, was not taking the grave condition of the nation’s second largest carrier seriously enough, glad-handing around an airport while his airline teetered.
Now, three years later, United and Mr. Tilton, 57, are still around. The substantially leaner airline is scheduled to emerge today from Chapter 11 bankruptcy protection. And, though United and its parent, UAL Corporation, could still face trouble ahead, Mr. Tilton sounds like a man who knew something all along.
“I wasn’t crazy. It was intellectual optimism,” he said, relaxing in a United headquarters conference room last week, sans jacket and tie. Mr. Tilton likes to lean back in his chair as he talks, fold his arms over his head, take up space. “I knew all we had to do was get our costs down and aligned with the rest of the industry.”
United employees had lived through a failed employee takeover in 1994 and the 2001 sacking of chief executive James Goodwin, who had angered employees. Mr. Tilton had worked his way up through the marketing side of oil company ChevronTexaco Corporation. He was the embattled airline’s fourth chief executive in four years.
But he saw things that others might not have: The operations were mostly fine, he thought. It was the costs that were out of control. He began slashing, and the cuts were draconian: Over the past three years, $7 billion in expenses have been cut. The pension plan was terminated. Part of the fleet was grounded, and about 26,000 jobs were eliminated. Mr. Tilton found that the costs of labor, aircraft leases, and contracts with regional jet operators were too high and needed to be cut.
Mr. Tilton’s message to employees and unions was little different than that of other bankruptcy chief executives: We can either make the cuts or fold the company. You decide.
But Mr. Tilton was not a dour, besieged chief executive. He continued to exude a pragmatic optimism, and employee morale reflected it. He visited the airline’s hubs and gave weekly telephone updates to employees.
“If you think of your sacrifice as an investment, rather than something that’s gone forever, you’ll have a different mindset about it,” he said he told workers.
In the conference room at United’s headquarters, Mr. Tilton sat under a framed and mounted poster signed by dozens of United employees at Reagan National Airport. The poster reads: “Thank you. Your efforts are recognized and appreciated.”
During the airline’s restructuring, many analysts concluded that the carrier was near liquidation. “It became a word used very often,” Mr. Tilton said.
But he said United would be missing too many opportunities if it folded.
“This company was not only worth preserving, if we got this right, it would be a really, really interesting place to work in the years to come. We preserved all that potential. And as proud as I am of all of the work we’ve done in the past three years, we can be much better,” he said.
The airline will have to be, analysts say, while acknowledging Mr. Tilton’s turnaround.
“It’s not easy making major changes, even in bankruptcy. You have to give credit where credit is due,” said Calyon Securities Inc. analyst Raymond E. Neidl, who had been an outspoken critic of the airline. “Now the question is, do they have the mantle to make this a project going forward, keep peace with employees, and further reduce their cost structure, as rapidly as this industry changes?”
Mr. Tilton must now convince the airline’s 57,000 workers, who have watched as pay and benefits were cut, that the sacrifices were needed not only to keep the airline in business, but to help the carrier excel and thrive, in large part by improving customer service.
“My big goal for the company is to move it to a performance culture, rather than a status quo culture,” he said.