(PRWEB) July 26, 2006 -- In remarks prepared for delivery to an Atlanta civic club, Harry L. Nolan, Jr., author of the acclaimed book, "Airline Without A Pilot – Lessons in Leadership," says "Grinstein is betting on the wrong horses."
“ Hollis was a great listener and communicator. He was realistic and honest. If he said something would happen, it did. ”
The strongest candidate to head Delta is Hollis Harris, the successful and widely respected aviation executive for over 50 years. As Nolan’s book documents, Harris was clearly the best qualified candidate to succeed Dave Garrett in 1987. However, through company politics, Ron Allen got the job instead and started the downhill slide that contributed to Delta’s eventual bankruptcy.
After Harris left Delta in 1990 as President/COO and Board Member, he went on to successful stints as CEO at Air Canada, Continental and World Airways, steering the latter two back to profitability. While at Air Canada, Harris was instrumental in creating the strategic agreement between Air Canada and United Airlines that produced the Star Alliance - the largest airline group in the world. In 1996, he was deemed "Number One CEO" by Financial Times of Canada. He was elected to Georgia’s Aviation Hall of Fame in 2005.
Harris was widely respected and loved when he was at Delta; many were disappointed when he was not made CEO in 1987. His considerable support at Delta continues to this day. For example, Harris was asked to be keynote speaker at the recent Delta Pioneers annual convention in Atlanta. One long-time Delta frontline employee told Nolan, "Hollis was a great listener and communicator. He was realistic and honest. If he said something would happen, it did." The headline of an article in the alumni publication of his alma mater, Georgia Tech, says aptly, "Hollis Harris has his head in the air and his feet on the ground." Harris is now an active 72-year old whose home is near Delta headquarters.
By contrast, Nolan says in his remarks, neither Whitehurst nor Bastian has the industry knowledge, business experience or credibility to lead Delta to sustained success once it leaves bankruptcy and Grinstein retires to Seattle. Both carry the stigma of having been recruited by and serving under deposed and widely disrespected Delta CEO Leo Mullin, Grinstein's predecessor.
Whitehurst is a 38 year old who has been with Delta only since 2002. Formerly a management consultant with a large firm, where he reportedly led project teams of up to 60 people, his expertise is in computers. Although he is considered smart, likeable and a good presenter, many question whether Whitehurst could effectively lead a company with billions in annual sales and over 50,000 employees.
Grinstein credits Whitehurst as the architect of Delta’s Transformation Plan and the bankruptcy reorganization plan now in process. As Nolan’s book shows, the Transformation Plan took a full year to develop, while Delta was losing millions every day. He contends this lack of sense of urgency contributed to Delta filing for bankruptcy.
Now Delta has asked the bankruptcy judge to give them a second extension, this one for four months, on the due date to file their reorganization plan. If Delta does not meet this date, then the creditors will have the right to file alternative plans of their own.
Bastian is also a relative newcomer, who joined Delta in 2000 and left briefly in 2005 for another job. He returned when Delta made him CFO, repaid Bastian’s 6 figure signing bonus from his new employer and gave him a several hundred thousand dollar annual pay raise in the process.
In a scathing email to the members of DALRC (Delta Air Lines Retirement Committee), Chairman Cathy Cone said, "The Delta of today...appears to be run by the 30-40 year old short timers that are often identified as 'promoted from within'…but leaving out 'within 5 years of employment' and consultants that seem to be people that once worked at Delta but left with large SERPS and now make more money than when they were employed… as consultants seem to be putting a 'new face' on Delta and from my perspective….an ugly one." She backed this statement up with concrete examples of the lack of leadership and confusion at the top now prevalent at Delta.
Nolan's book says Grinstein is to be admired for his ongoing efforts to try to save the pensions of Delta's 90,000+ retirees, active duty employees and dependents. Grinstein and Delta have lobbied in Washington for a longer time to make up for the company's pension underfunding, threatening to turn Delta's pension obligations over to the government if they do not get this extension.
However, the book points out the difficulty of getting any such legislation through Congress. The inability of the U.S. House and Senate conferees to agree on a compromise pension bill last week is further evidence of this difficulty. In his remarks, Nolan also observes that the White House has previously indicated its opposition to legislation giving special treatment to airlines. This makes a Presidential veto a possibility even if Congress does pass a pension bill favoring the airlines.
The stage is now set for Delta once again to blame management decisions that harm Delta people irreparably - in this case shedding the company's pension obligations - on an outside factor instead of lack of leadership at the top in the company. Here Congress or the President would be blamed. Before it has been 9/11, low fare competition and high fuel prices.
Nolan says, "It is time for Grinstein to bring in the first team to succeed him to insure Delta’s survival and future prosperity. Delta’s creditors and lenders can make certain they will be repaid by insisting Grinstein bring in Hollis Harris now as his successor and board chairman. However, if Delta sheds it's pension obligations, the harm to the Delta culture - Delta's traditional competitive advantage - would be devastating and Harris should then be brought in immediately to replace Grinstein as CEO."
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