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United Airlines Names Oscar Munoz Chief Executive Officer

Submitted
CHICAGO, Sept. 8, 2015 /PRNewswire/ -- United Continental Holdings, Inc. UAL, +1.45% today announced that it has named Oscar Munoz as president and chief executive officer. Munoz will also continue to serve on United's board of directors. The board appointed Henry L. Meyer III, United's lead independent director, to serve as non-executive chairman of the board of directors. (www.marketwatch.com) More...

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LGM118
LGM118 6
So apparently it has to do with the investigation into Bridgegate. Why is it that everyone who had anything even remotely to do with it is suffering real, actual, material consequences except for the one guy in the center of all of it?

As someone who will be living in New Jersey for the foreseeable future, I sincerely hope that Chris Christie's political career ends already.
PhotoFinish
PhotoFinish 4
This is all about influence peddling between Smisek and Sampson. He was a very poor manager. The post-merger integration has been horrible for the combined companies. Many say that it is because they moved the HQ to Chicago and were using the United people because of a sweet tax deal, instead of using the Houston people with a proven track record of great performance.

But what an incompetent manager. Even if he had added the SC flight to curry favor with the Port Authority (landlord at Newark and major transportation player in the NYC metro area), why would he cut the flights as soon as Sampson got sacked as the chairman of the Port Authority?? Amateur move. Should've kept the flight for some time afterward, cutting it later only after the dust had settled on the Port Authority investigation, and preferably as part of a restructuring when multiple flights get cut.
preacher1
preacher1 4
Stupid is the operable word here. I told Jeffrey several years ago that the merger was probably a good deal and then grow it into something solid. Then I told him that moving to Chicago was stupid cause I didn't figure some of his key people would go. Whether his fault or not, some of the crappy stuff at UAL has happened on his watch and it was his responsibility. Your statement on letting the dust settle is only good, common sense. Apparently that is lacking in some quarters.
preacher1
preacher1 2
Looking at his severance package though, he won't be begging bread on a street corner.
cheshire
Cal Keegan 2
I understand there is a clawback for felonies or crimes of moral turpitude.
hitter439
hitter439 1
Hate to be cynical but my guess is there will be no clawback. DOJ has probably already cut a deal that if Smisek co-operates with the investigation (articles I have read indicate he has stated he will) he will not be prosecuted. Clawback provision is probably just PR by United's BOD.
narit01
Ian Narita 1
Nothing illegal about having a flight from EWR to CAE. It's just too many fingerprints. If on the other hand any of those flights were delayed for Mr Samson that could be viewed another way. Say a 6pm flight was delayed to 9 pm without any explanation, CAVU weather no mechanical delay or other explanations, then Mr Samson had a meeting that went late and during that time Mr Samson made a phone call to United.
amiablebird
Ed Merriam 2
I just realized that the Gov's gotten all the transit bases covered: planes, trains, and automobiles

if he's following Enron's throttling model everyone better keep an eye on the pensions
clipper759
joe johnson 4
A little good news for a change.
artminburi
art kochaphum 4
Joe I do agree with you "great new day for United"
hitter439
hitter439 1
Good riddance to Smisek. He has ruined the passenger flying experience at United through aircraft seat configurations whose density are beyond absurd - of course you can pay an extra 10% - 33% for a "premium" economy seat that you can actually get in / out of without a shoe horn. I pay to check my bags, for food - fine, but for my economy ticket price I deserve a seat I can actually sit in, especially when you charge $600 for a 5 hour flight (LAX - ITO). BTW I am 6'0, 180 lbs.

Recently flew Alaska Airlines - 737-800, CRJ-700 and Q400 aircraft. Although not "spacious", the economy seats on these aircraft were fine.

Smisek may have increased United's profits short term - but destroying your basic product will IMHO have longer term consequences. Hopefully Oscar Munoz will realize this.
cheshire
Cal Keegan 2
Work hard, bribe right.
Dubslow
Bill Winslow 2
It says very little about Smisek. Was he "fired"? Leaving for personal reasons, or...?
shawnconnelly
Denver Post article from AP story confirms Newark investigation connection, http://www.denverpost.com/breakingnews/ci_28777248/united-says-ceo-jeff-smisek-is-out-effective
shawnconnelly
The Wall Street Journal is reporting it may be related to an investigation. Of course, they have a paywall, so posting the story would be a waste of time for most folks.
preacher1
preacher1 1
It all goes back to that Port Authority deal and as it is being kept kinda quiet, methinks there is a whole lot more there than being told. Just guessing but I'll bet it has something to do with the Fed's poking around in it.
narit01
Ian Narita 1
According to what I heard on PRI Marketplace on the radio, some time back he was having dinner with the Port Authority head David Samson and Samson related about the difficulty with flying to South Carolina with his wife for the weekend. They have a property in or near Aiken, SC.
The next thing they knew United was flying twice a week to Columbia, SC (KCAE) from Newark (KEWR). I can only guess what days of the week.
I can only guess this is fallout from the Bridgegate mess. It may have come up during that investigation over the George Washington Bridge lane closures and the skyway renovation funding.
PhotoFinish
PhotoFinish 2
There were only 2 flight a week NYC-> SC (Thurs) and SC->NYC (Sun) or some similar arrangement that magically fit the times that PA Chairman needed to fly to his vacation home for the weekend.
cheshire
Cal Keegan 1
I hear that flight was very frequently delayed, perhaps waiting on a VIP passenger?
preacher1
preacher1 1
That was the gist of it. The stupid or amateur part of it was the start and stop times and as per the post below, the flight schedule themselves. It was one thing to accommodate Samson as stuff like this probably goes on all the time, but as Samson was going down, Jeffrey tried to deny any type of bribery and then immediately cut that flight while it was center of attention. That was there for the world to see and became rather obvious. That was the stupid part. This has brought Bridgegate back into the limelight, probably by a Christie political opponent, and UAL is trying to distance itself from the fed. investigation by shaking up management and promising cooperation. As I said, it probably wasn't anything that wasn't done in the normal course of business at that level. He was probably just made the scapegoat in this deal as UAL was heading for a financial recovery.
blueflash2
Ken Urquhart 1
Bring back Gordon Bethune!
preacher1
preacher1 1
Wasn't he one of the one's that helped put it in the tank in the first place?
mwjones71
Michael Jones 1
Bethune was the "turn-around" guy that brought it back from the brink, actually leaving it on solid ground when he left in December 2004. His book "From Worst to First" talks about it. Larry Kellner (who replaced Bethune) and Smisek were both brought in by him and were part of the overall team that made Continental what it was before the merger.

I know both Bethune and Kellner were not interested in a merger, and there were even rumors that Kellner's retirement/departure was pressured by a board that wanted the merger - which Smisek delivered just months after being named CEO.
preacher1
preacher1 1
I'm kinda like Ken Schmidt here below. I hope he can run an airline better than he ran trains. That said, when you manage a group of people that sise, you have a bunch of folks in outlying places and you need to get out of the office and go see them, and not only get to no them but let them get to know you. I am reminded of a corporation out here. A manager took over a decent corporation but never got out to his plants. It started down hill. Board changed managers and it started up hill again. Reason was that if you called the office for that new manager, they would just tell you what plant he was at that day.
jimcolby
James Colby 1
The September 10 and today's edition (September 11) of the Wall Street Journal has an interesting story-line on this (one not connected to the never-ending gripes about the merger). The "new" United had been hammering the Port Authority for years to upgrade facilities and lower fees given its huge presence at Newark. Regardless of how one views Mr. Smisek's handling of overtures to the Authority Chairman, the Journal articles suggest that the new United CEO will have the same problems in pressuring the Authority for the upgrades.
preacher1
preacher1 1
Well, as has been said several times below, this was/is business as usual in these circles and as you say, will continue with the new chairman. I personally think that Jeffrey just got made the scapegoat in the deal in order to keep others and UAL out of trouble.
jimcolby
James Colby 1
I am also inclined to give Mr. Smisek the benefit of the doubt here. I recall years ago that Delta was engaged in similar gymnastics with the Minneapolis airport authority.
preacher1
preacher1 1
Yeah, slower than planned but he was bringing the ship around financially. I hope Munoz can do it. He will have to do better with this Airline than he did on CSX trains.
narit01
Ian Narita 1
I was looking at the news release that the Columbia, SC Airport did when the KEWR KCAE flight started.
When I looked at the same time Delta was announcing that Delta was adding a second flight on their route KLGA KCAE. LaGuardia is also run by the Port Authority. I wonder how much business Delta did on the route.
Where are the feds going to ask questions next?

KCAE news release

http://www.columbiaairport.com/abouttheairport/news.aspx?article_id=79
RRKen
Let's just hope he can operate planes better than he did run trains.
narit01
Ian Narita 1
Oscar Munoz was the number two man at CSX under Mike Ward. Munoz was being groomed as Ward's replacement.
CSX is,in my opinion,the weakest of the big four class 1 railroads.(of the 7 class 1 railroads in the US). Not to impinge Mr Munoz he was working in not the beat of circumstances. He does have a set of skills that may prove to be useful at United. Experience with labor, dealing with a complex transportation organization with a lot of moving pieces. Railroads also have to deal with various governmental organizations. The one place he may or may not have experience is dealing with the public at large. It was not a necessary at CSX to a major degree.
watkinssusan
I don know all of the "legalities" involved in the smisek situation,but I do know the employees of continental before it was "eaten" by united airlines,did not care for him nor respect his leadership..they liked bethune much better and he had his own issues..continental was once "the proud bird with the golden tail" under others leadership, and their customer service showed it..when mediocre united airlines managed to take over,the whole aura that was continental disappeared..i am not at all surprised there was some "underhanded" dealings going on with christie or officials in new jersey..i hope mr munoz can bring back respect for united in some way...
mwjones71
Michael Jones 1
I was an IT contractor for CO during the last year of Bethune's leadership, and was there midway through the Merger (2011). I had a lot of respect for Bethue and Kellner, both who were very friendly to talk to and approachable. Smisek not so much.

That said, the move to Chicago was big tax incentives - along with the prestige of moving corporate, System Operations and other critical functions into the Willis (Sears) Tower for that prestige. Too many of UA's failed policies and culture ultimately bleed through, and it has damaged the reputation overall.
cheshire
Cal Keegan 1
Some more shenanigans, tens of thousands of dollars contributed from UAL execs to Christie's campaign a few weeks before a meeting with Christie, at the bottom of this article... http://talkingpointsmemo.com/cafe/how-bridgegate-probe-into-christie-crony-got-united-airlines-chief-fired
waderoberts
wade roberts 1
(Duplicate Squawk Submitted)

United ousts CEO in corruption probe

United ousts CEO Jeff Smisek in corruption probe; several other officers resign.

http://www.nytimes.com/2015/09/09/business/united-ceo-port-authority-investigation.html?hp&action=click&pgtype=Homepage&module=first-column-region&region=top-news&WT.nav=top-news&_r=0
Moviela
Ric Wernicke 0
Anyone who needs to work with the Port Authority has to step in the dogs' business to get anything done. I recall Ed Acker declined to participate in the "work with me here" culture at the Port Authority. Then there was a problem with the air conditioning at Pan Am's JFK terminal. It ran 80 degrees all summer.

The United exec's were caught in the glare of publicity over Gov. Christies alleged punishment of rival politicians. Otherwise, it would just have been a cost of doing business.
JerrySteinberg
(Duplicate Squawk Submitted)

Smisek Forced Out as United Airlines CEO

United Continental Holdings announced the immediate departure of its CEO, president, and chairman, Jeff Smisek, amidst an ongoing federal investigation. The Chicago-based airline named Oscar Munoz, CSX’ chief operating officer, to the position of president and CEO.

...

http://www.frequentbusinesstraveler.com/2015/09/smisek-out-as-united-airlines-ceo/

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