CEOs You Don't Want in the Cockpit

It's a good thing that Donald J. Carty, the chairman and chief executive of American Airlines, doesn't also pilot one of its planes. If he did, and if the plane went into an uncontrolled dive and he handled it the same way he's running the company, he'd bail out as the plane fell to earth, drift dreamily down on a golden parachute, land lightly amid the carnage and give himself a nice cash bonus for coming through unscathed.

Over the past week it has become clear that Carty has engaged in the same kind of double-dealing, to conceal the same kind of double standards, that last year made his fellow Texan and CEO Ken Lay a household name.

Carty's just the latest in a string of bad AA management types that stretch back to the days of Bob Crandall. He was even accused of bribing the ATC ground controllers into putting other carriers' planes into phony ground holds so that AA planes could take off first.

I haven't been a fan of AA for a LONG time.

Michael

"The real problem, of course, is that Don Carty isn't all that exceptional among his fellow corporate statesmen -- certainly not at many of the major airlines. Over at Continental, CEO Gordon Bethune pulled down a handsome $14.7 million last year -- a 172 percent increase over 2001, though the company lost $451 million. At Delta, chief executive Leo Mullin got himself paid $13.8 million -- a 104 percent increase over 2001, though Delta lost $1.27 billion. In this quadrant of American capitalism, at least, there is indeed a relation between executive pay and company performance. It's inverse.
Or maybe there's a special problem with Texas CEOs. I know a former CEO of Halliburton Co., now the No. 2 in a larger concern, who keeps arguing that the public's legal right to oversee public business does not pertain to the topmost public executives when they meet to make energy policy and who knows what else. Then there's Dick Cheney's boss, who's out stumping for a budget that will force state governments to increase class sizes and cut medical care but will reward the richest 10 percent of Americans with massive tax cuts.

When these guys think of shared sacrifice, the saps get the sacrifice and they get the shares."

"Haysus Marimba, I hope the controllers reported it."

Some anonymous ATC guys DID report it, which is how it came to light. It was one of the tactics Crandall is said to have used to help engineer the demise of Braniff Airways.

Michael

Well, yes, but... The leaders of EVERY organization try to feather their own nest, every organization. Take these 3 unions, their leaders have perqs that most folks would die for. They aren't widely known, but they are there.

They always follow the same logic. First, it is so important that the leader be free of concern over the details of everyday life that he can focus on the big picture aspects of the organization and do it 24/7, that he has all sorts of perqs. They include a leased car, maybe a driver, and, eventually, a limo with driver. The F/A union leader probably has a fully furnished apartment so he can live near the Company. There are union owned computers, telephones, and, maybe, a clothing allowance. He has "top hat" insurance, life, health, vehicle, maybe a personal assistant to pick up his laundry, etc.

Second, the union leader has to appear to be on a par with the leader of the company and competing unions. So, he has an expense account that you wouldn't believe and salary allowances that would let him appear to live the good life.

All organizations do this. Nonprofits may be the worst but unions are right up there. Do you think the pilots' and F/As' union leaders stay in the same hotels as the crews when they are on business? No, the saty in the same five star places that the airline leadership uses. Look at Congressmen if you want to talk about wealth for when this gig is over!

The F/A union leader probably has a fully furnished apartment so he can live near the Company. There are union owned computers, telephones, and, maybe, a clothing allowance. He has "top hat" insurance, life, health, vehicle, maybe a personal assistant to pick up his laundry, etc.

Considering the gender of the vast number of F/As, why do you assume the head of the union is a he? :-)

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