Newsmaker: United Upholds 'Gold Standard' In House

<B> Newsmaker: United Upholds 'Gold Standard' In House</B>

By Jay Campbell

He could better pass for a football coach than a CEO and is more of an everyman than a slick executive, but United Airlines' next chairman and CEO, Jim Goodwin, "knows this business inside and out," said his predecessor, Gerald Greenwald.

United's Board of Directors--which includes representatives of the pilots' and machinists' unions--elected the 32-year United veteran to the top posts in late March; he will take over when Greenwald retires in July. Goodwin's appointment ends months of searching, after United's employee-owners forced out John Edwardson (<I>BTN,</I> Oct. 5, 1998), Greenwald's chosen successor. "During the course of our search," Greenwald said, "it became clear to us that Jim was the template against which we were measuring everyone else. He emerged as the gold standard."

As head of the North American division, a slot now occupied by Chris Bowers, Goodwin had profit responsibility for customer service, sales, reservations and city ticket offices. Before that, he was senior vice president of maintenance operations. Goodwin joined United as an accountant in 1967, and has held positions in every management department "except flight ops and public relations," he said.

"I am honored by the Board's confidence and deeply appreciative of the trust and support I have received from my fellow employees," Goodwin said. "The main challenges I see ahead are meeting the needs of an increasingly sophisticated customer on a global basis and building upon the strides we have made already to improve the relationship among management, unions and all employees. These are the keys to industry leadership and financial growth for United."

Goodwin's first major challenge will be negotiations over renewal of the 1994 employee stock ownership plan that gave 60 percent of the company to pilots, machinists and other salaried workers in exchange for wage concessions. Renewing the plan, which expires in April, would again mean wages-for-stock. But canceling it would slowly reduce the employees' ownership and create two tiers of workers: owners and new hires. In any event, new contracts will have to be ironed out. As Greenwald told reporters last fall, "Whether or not we have another ESOP, and if we do, regardless of the form it takes, our costs are going to increase."

Goodwin will attempt to offset the increases with cost reductions gained by introducing new technologies for flight planning and maintenance, as well as sales and distribution, and through improved purchasing, flight planning and aircraft replacement. The need to hold down costs is compounded by revenue pressures generated by new competition with US Airways in the East and American Airlines in the West, a weakened Asia market and lower yields as business travelers continue to find ways to book cheaper tickets.