10 items found for your search. If no results were found please broaden your search.
(01/30/07 4:20am)
CHICAGO -- McDonald's has finally selected a new trans-fat-free oil for cooking its famous french fries after years of testing, the fast-food chain said Monday.\nWhile it has developed a healthier new oil, the company still is not saying when it will be used in all 13,700 U.S. restaurants. It already trails competitors in committing to a zero-trans-fat oil.\nSpokesman Walt Riker said the oil is currently in more than 1,200 U.S. restaurants after extensive testing, but declined to provide details on timing or locations.\n"We can confirm that we've got the right oil," he said. "We're phasing it in."\nThe choice of a new oil comes as McDonald's and others face a July 1 deadline to begin complying with an ordinance passed by New York City last month making it the first U.S. city to ban all restaurants from using artificial trans fats.\nOak Brook, Ill.-based McDonald's has said for months it would comply with such a ban, and said it would introduce any new oil nationwide rather than have a separate oil for its New York restaurants. But it had not confirmed that testing was complete.\nRiker said the new oil is canola-based and includes corn and soy oils.\nAddressing long-held concerns that changing the oil could jeopardize the popular taste of its fries, he said: "We're very confident in our test and taste results. ... We're very confident in what we're hearing back from our customers."\nThe Chicago Tribune, which first reported McDonald's decision on a new oil Sunday, said the company has tested 18 varieties of oil in more than 50 blends during the last seven years.\nMcDonald's had been under pressure for moving more slowly than smaller rivals Wendy's International Inc. and Yum! Brands Inc.'s KFC and Taco Bell to rid its oil of the artery-clogging trans fats.\nA public health advocate who has criticized McDonald's fries as nutritionally "disastrous" applauded its move toward a new oil.\n"So many people eat there that making this change can really provide a significant benefit to the public's health," said Michael Jacobson, executive director of the nonprofit Center for Science in the Public Interest. "It also reconfirms with the restaurant industry that trans fat is a real problem and now even the biggest chain is beginning to deal with it. Hopefully now the smaller chains and mom-and-pops will also get rid of it."\nThe $22 billion company was especially cautious after reneging within months on a September 2002 pledge to introduce a new oil, citing concerns about changing the taste of its fries.\n"It's just taking a little bit of time because as we move forward we don't want to jeopardize the iconic nature of the french fry, which as you know is so very important to our brand," Chief Executive Jim Skinner told an investor conference in New York two months ago.\nThe company uses a healthier oil blend in some countries overseas but says regional differences in agricultural production require development of different blends.\nMcDonald's has not identified the test markets the latest oil was used in. Riker denied that Phoenix was among them, as the Tribune report said.\nShares in the company rose 30 cents to close at $43.23 on the New York Stock Exchange.
(04/18/06 4:45am)
OAK BROOK, Ill. -- McDonald's Corp. will promote its healthier menu choices to counter negative publicity expected from a new book co-written by the author of "Fast Food Nation," Chief Executive Jim Skinner said Monday.\nWhile McDonald's maintains that the strategy is not aimed solely at undermining "Chew On This," which is due out next month, Skinner acknowledged that "it's important to ramp this up now" amid heavy criticism of the fast-food industry for its perceived role in increased obesity.\n"I wouldn't call it a campaign," he told reporters in a news conference at McDonald's headquarters. "It is a continuous improvement relative to the communication of our story regarding our high-quality food in McDonald's."\nThe approach signifies a marked departure from the way the world's largest fast-food chain remained mostly quiet after being skewered in both Eric Schlosser's "Fast Food Nation" in 2001 and filmmaker Morgan Spurlock's 2004 documentary, "Super Size Me."\nThis time, the company is trying to get its side told even before publicity hits for both "Chew On This," which was co-written by Schlosser with Charles Wilson and targets 11- to 15-year-olds, and a film version of "Fast Food Nation" that is due out later this year featuring Patricia Arquette and Ethan Hawke.\nMcDonald's has been promoting its commitment to balanced, active lifestyles in recent years and adding healthier products, such as entree-sized salads and the option to substitute apple slices and juice for fries and soft drinks in Happy Meals.\nBut Skinner said "we're not doing as good a job as we could, quite frankly," in telling the company's story.\nAfter warning its U.S. franchisees about the upcoming film, the company issued a statement last week saying it was aware of Schlosser's new book and movie, as well as his upcoming publicity tour. "While we don't agree with some of his conclusions, it is clear he shares McDonald's passion for food safety, good jobs and quality food," it said.\nAccording to early reports about the book, it holds fast-food companies responsible for the nation's childhood-obesity epidemic and criticizes them for being low-wage employers.\nMcDonald's already has been hit by lawsuits accusing it of causing obesity in tens of thousands of children. Courts have dismissed most obesity claims, but an appeals court in New York reinstated one suit against it last year.\nSkinner said the company has to balance efforts to produce healthier food with the fact it is a for-profit restaurant company.\n"There is a distinction between what people say they eat, say they want to eat and what they eat," he told reporters at the start of a daylong session and tour focusing on McDonald's food safety and job opportunities. "It's about choices. It's about opportunities for people to come to McDonald's and get a meal that they feel good about having eaten ... that fits into their lifestyle."\nHe dismissed the notion that McDonald's is nothing but a minimum-wage employer with dead-end jobs, calling it "a company of opportunity." He said 67,000 McDonald's restaurant managers got their starts working behind the counter, as did 1,200 owners of McDonald's franchised restaurants and 20 members of top management, himself included.\nOne area where the company remains particularly vulnerable to criticism is the level of harmful trans fatty acids in its fries, which it said earlier this year was higher than previously thought. It's now been almost four years since McDonald's pledged to switch to a new oil that would halve the level of trans fats in the popular product.\nAsked about that promise, Skinner said there's still no timetable for when the switch might occur and the company must first get the taste right in ongoing testing.\n"We're not there yet," he said. "We believe that we will be. We just don't know exactly when that's going to be. ... But trust me, we are very much focused on this."\nMcDonald's shares fell 51 cents to $34.34 in afternoon trading on the New York Stock Exchange.
(02/21/06 5:17am)
CHICAGO -- The nationwide rush to go wireless appears poised to extend to its biggest city yet.\nChicago is launching an effort to offer wireless broadband, city officials said Friday, jumping on the Wi-Fi bandwagon as similar initiatives proceed in Philadelphia, San Francisco and smaller cities.\nChicago has hundreds of Wi-Fi hotspots in places like coffee shops, bookstores and libraries, where anyone can walk in, sit down and connect to the Web. Hoping to extend that wireless blanket to all 228 square miles, the city plans to ask technology companies this spring to submit proposals for the project.\nWhile it's too soon to say how the system would operate, the goal is to make Internet access "broad and affordable" for residents and heighten Chicago's appeal for businesses and tourists alike, according to Chris O'Brien, the city's chief information officer.\nThe city did not specify goals for how much the system would charge for access. In Philadelphia, EarthLink Inc. is building a citywide network that will charge a wholesale rate of $9 a month to Internet service providers that would then resell access to the public at an undetermined price.\n"We think it's important for residents of the city and tourists and businesses to have lots of different ways to connect," O'Brien said. "For a city as big as Chicago, with the vibrant business community and diverse citizen base that we have, you want to make sure all kinds of technology are available to them as they work and enjoy entertainment options."\nIf all goes smoothly, the system could be running as soon as 2007, O'Brien said. That would all but certainly leave the city behind Philadelphia, which hopes to have its entire system in place late this year or early next year. But the size of a Chicago network would dwarf Philadelphia's planned 135-square-mile network or anything now in place.\nCurrently, the biggest municipal Wi-Fi network is the all-free MetroFi in the south San Francisco Bay area at 35 square miles, according to Wi-Fi expert Glenn Fleishman. By spring, that title will be passed to one covering nearly 110 square miles in the neighboring Phoenix suburbs of Tempe and Chandler, Ariz., he said.\nCities' race to get into municipal broadband is being increasingly embraced by Internet service providers, since most cities are enlisting private companies to help build the wireless systems rather than doing it on their own. EarthLink created a division last year to solicit deals similar to Philadelphia's with the 50 largest cities.\nCities besides Philadelphia that have put Wi-Fi projects out for proposals in the last four months alone, according to EarthLink, include Portland, Ore.; San Francisco, Anaheim, Pasadena and Long Beach, Calif.; Denver and Aurora, Colo.; Minneapolis; Milwaukee; Grand Rapids, Mich.; Pittsburgh; Arlington, Va.; and Brookline, Mass.\nRather than viewing the cities' efforts as competition, said Don Berryman, president of Earthling's municipal networks division: "This allows us to build our own network and provide broadband service anywhere we want and not have to work through the Bell company or the cable company, so it gives us a lot of freedom."\nChicago's main phone company, AT&T, says it similarly would not be opposed to a city-initiated effort.\n"AT&T always has believed that the best approach is to stimulate investment in broadband," spokesman Rick Fox said. "As long as you're working with the private sector, that's a good thing."\nThe idea of a citywide Wi-Fi network got a big thumbs-up from several Chicagoans who were sitting in cafes with their laptops Friday.\n"I'm always searching for Internet hotspots," said Beibei Que, a law student getting in some work at a coffee shop. "I like to have the Net at my fingertips wherever I go."\nKate Harper, who works mostly out of her home, said she would welcome the chance to get online elsewhere. "It's nice to be able to go out and sit somewhere and get connected," she said.
(04/21/05 4:29am)
CHICAGO -- Motorola Inc., the world's second-largest mobile phone maker, reported a better-than-expected 14 percent increase in first-quarter earnings Wednesday, continuing its comeback on another solid rise in sales.\nCoupled with stronger-than-anticipated profits and sales from Intel Corp., Wednesday's first-quarter results added up to a more than respectable early scorecard for the tech sector despite concerns following an earnings shortfall from International Business Machines Corp. last week.\nSchaumburg, Ill.-based Motorola cited the success of its latest phones as fueling a sixth consecutive strong quarter, during which time it has ramped up its effort in new products, spun off its struggling semiconductor business and changed top management.\nSecond-year CEO Ed Zander said the "bang-up quarter" in cell phones had enabled the company to boost its share of the world market to an estimated 17.1 percent, the highest it's been since late 2002. Finland's Nokia, which reports earnings Thursday, remains the runaway leader.\n"We were able to grow market share, gross margin and profits in a very tough, competitive market due primarily to our focus on execution, innovative products and increased global focus -- and we see more growth ahead," Zander said.\nMotorola's net earnings were $692 million, or 28 cents per share, up from $609 million, or 25 cents per share, a year earlier.\nEarnings from continuing operations, also 28 cents per share, easily exceeded the consensus estimate of 19 cents per share by analysts surveyed by Thomson Financial.\nRevenue rose to $8.16 billion from $7.44 billion, up 9.7 percent and topping Wall Street's expectations of $7.72 billion.\nMotorola said sales from the cell phone business rose 6 percent to $4.4 billion. The company's primary unit posted operating earnings of $440 million, up from $406 million.\nThe company shipped 28.7 million cell phones during the quarter, or 13 percent more than a year earlier, and continued to benefit from its ultra-slim Razr and an array of other new products. It announced 27 new devices during the quarter and began shipping seven others.\n"It looks like they've got momentum," said Morningstar analyst John Slack. "This is increasingly a product-driven business, and right now they've got the hot hand."\n"Those are good numbers," Brian Modoff, an analyst for Deutsche Banc Securities, said of the results from the mobile phone division in particular. "You're clearly seeing the strength of their product line."\nHugues de la Vergne, principal analyst with market research firm Gartner Inc., said Motorola's share gains in North America and Latin America, where it is No. 1, were impressive. However, he added, "their CDMA portfolio is still lagging and needs to be addressed in 2005."\nZander noted that the improvements came despite a 2 percent decline in average selling price, which is a key industry barometer of performance. But the high-end Razr, which was introduced last fall and costs $450, remains the "flagship," he said.\n"Without question, the Razr is the standout," the CEO told analysts on a conference call, while disclosing few specifics about its sales.\nNot all the company's new phone projects have gone off smoothly. The highly anticipated new iTunes phone was supposed to have been unveiled six weeks ago before a last-minute delay; Zander said Wednesday it will come out in the next few months.\n"We're on track," he said in response to a question. "We just didn't get all of our ducks lined up when we wanted to show it"
(04/20/04 5:26am)
CHICAGO -- McDonald's Corp. chairman and CEO Jim Cantalupo, who orchestrated a turnaround of the fast-food giant in a 16-month tenure as chief executive after overseeing the proliferation of its restaurants worldwide in the 1980s and 90s, died unexpectedly of a heart attack Monday at age 60.\nThe company moved quickly to name Cantalupo's successors. Charlie Bell, McDonald's 43-year-old president and chief operating officer, was elected CEO by the board of directors and will keep the president's title; Andrew J. McKenna, 74, the board's presiding director, was named chairman.\nCantalupo was stricken in Orlando, Fla., where McDonald's was holding its international franchisees' convention. The company said he died at a hospital after suffering the heart attack at his hotel just after 4 a.m.\n"Jim was a brilliant man who brought tremendous leadership, energy and passion to his job," McKenna said. "He made an indelible mark on McDonald's system."\nA three-decade veteran of the Oak Brook, Ill.-based hamburger giant, Cantalupo returned from a brief retirement to take over the top post in January 2003 in a management shakeup after McDonald's had struggled through two-plus years of sagging U.S. sales and reported its first-ever quarterly loss for the last three months of 2002.\nUnder his leadership, the company worked to revitalize its brand through new products, a focus on health and a return to the basics -- better food and faster service -- instead of the expansion he'd once championed.\nThe fast-food giant slowed its breakneck expansion pace and has sharply boosted U.S. sales in recent months with help from three new products -- entree-sized salads, McGriddles breakfast sandwiches and white-meat chicken nuggets -- as well as by keeping more of its domestic restaurants open late at night. Led by the U.S. resurgence, McDonald's revenues for the last three months of 2003 jumped 17 percent to $4.56 billion.\nLast week, the company kicked off an anti-obesity campaign by announcing the introduction of Adult Happy Meals, with salad, bottled water and a pedometer, as well as healthier options for children's Happy Meals it introduced last year overseas.\nThe company also introduced a new global advertising campaign, adopting a slogan -- "I'm lovin' it" -- meant to appeal to younger and hipper consumers. Customers responded, and so did shareholders -- McDonald's stock rose 71 percent during his tenure.\nCantalupo previously had made his mark as head of international operations, overseeing a more than sixfold increase of its international restaurants from 1987 until his retirement in 2001.\nBell had been the heir apparent since the company promoted him from head of European operations in December 2002 as part of the shakeup that saw CEO Jack Greenberg depart.\nA native of Australia, Bell began his McDonald's career as a part-time crew worker in Sydney and advanced through the ranks, becoming Australia's youngest store manager at 19, vice president at 27 and a member of the Australian board of directors at 29. He previously headed the company's operations in his home country and in the Asia Pacific, Middle East and Africa divisions.\n"Charlie Bell has worked side by side with Jim during these past 16 months to revitalize McDonald's all over the world," the board said in a statement after the succession vote. "He is ideally suited and prepared to continue Jim's remarkable focus and discipline on our business."\nCompany spokeswoman Anna Rozenich said she was not aware of Cantalupo having had a previous heart attack or health problems.\nHe had lost weight in recent years and appeared fit after having been overweight in the 1990s, said franchisee consultant Dick Adams, a former McDonald's executive. Adams said international travel takes a toll on industry executives, resulting in numerous premature deaths.\n"He was doing an extensive amount of international travel," Adams said. "That's about the most stressful thing you can do to yourself."\nThe Orlando convention, where Cantalupo was to have given opening remarks to franchisees Monday morning, was postponed. Franchisees interviewed expressed sadness but said they expect the company's day-to-day operations to remain the same.\n"The company has been on a roll for the last year," said Jim McGarry, who owns a McDonald's in Boston. "He was a big part of it. ... Everybody's walking around here kind of shocked. (But) business will go on."\nAnalysts said Cantalupo's death is a harsh blow to the company, even if it was well-prepared with a deep lineup of experienced executives.\n"Cantalupo was, in my mind, the one guy who was able to get their organization shifted out of the expansion mode and more in an efficiency mode," said Morningstar analyst Carl Sibilski. "It was a tough thing to do. Not a lot of people thought he could do it, but he proved them wrong."\nCantalupo, a Chicago native, joined the company as controller in 1974 after eight years with Arthur Young & Co. He was promoted to vice president in 1975, senior vice president in 1981, Chicago district manager and zone manager for the northeastern U.S. before moving to the international job.\nMcDonald's shares fell 71 cents to close at $26.75 on the New York Stock Exchange.
(01/27/04 4:30am)
CHICAGO - McDonald's Corp. capped off a turnaround year with a modest $125.7 million profit in the fourth quarter, posting strong sales and operating results as it continued a resurgence under CEO Jim Cantalupo.\nThe net gain reported Monday was one of its smallest for a quarter in more than a decade, reflecting a $323 million charge for last month's decision to shed a large part of its portfolio of non-hamburger brand restaurants.\nBut revenues jumped 17 percent as McDonald's showed no ill effects from a U.S. mad cow scare, and results were particularly impressive matched up against the Oak Brook, Ill.-based chain's worst-ever financial quarter and first net loss a year ago.\nNet earnings amounted to 10 cents a share, compared with a loss for the same period a year earlier of $343.8 million, or 27 cents a share. Excluding the 25-cents-per-share charge for the restructuring of its partner brand restaurants, earnings were 35 cents per share. That met the consensus estimate of analysts surveyed by Thomson First Call.\nRevenues rose to $4.56 billion from $3.9 billion.\nCantalupo said the U.S. market, where sales have risen in each of the last nine months, continued its impressive performance with robust sales and margins in the quarter. McDonald's executives are expected to disclose more information on a conference call with analysts Tuesday morning.\nFor the full year, net income was $1.47 million, or $1.15 per share, up from $893.5 million, or 70 cents per share. Revenue increased 11 percent to $17.1 billion from $15.4 billion.\nMcDonald's shares closed up 3 cents at $25.28 on the New York Stock Exchange before the report was released -- up 57 percent since Cantalupo took over at the beginning of 2003. They were trading 3 cents higher in after-hours activity.
(12/09/03 6:03am)
CHICAGO -- McDonald's Corp. extended the recovery in its once-slumping restaurants to an eighth straight month Monday, reporting a double-digit gain in U.S. same-store sales and a modest improvement in Europe, its second-biggest market.\nSystemwide sales from the more than 30,000 McDonald's-brand restaurants worldwide jumped 14.9 percent from a year earlier as the world's largest fast-food chain continued to benefit from new products, new marketing, a strengthened economy and the dollar's weakness overseas.\nSame-store sales from McDonald's restaurants open more than a year, a key barometer of performance, rose 6.4 percent from a year earlier. Most notably, comparable sales climbed 10.2 percent at U.S. restaurants -- the eighth consecutive increase overall and third month in a row of double-digit growth -- and 1.9 percent in Europe, where sales have been sluggish.\nMcDonald's U.S. sales have been invigorated since last spring by a pair of successful new products -- entree-sized salads and McGriddles breakfast sandwiches -- and extended hours.\nFirst-year company head Jim Cantalupo also cited contributions from the menu of $1 items, the new "I'm lovin' it" marketing campaign and "an improved customer experience."\n"While we still have work to do, our momentum continues as we maintain focus and discipline on what counts most -- our customers and restaurants," the chairman and chief executive officer said.\nAnalysts see the gains as likely to continue into 2004, at least until the monthly results start bumping up against tough comparisons with last spring's upswing.\n"They're starting to fire on more cylinders than they were last year," Morningstar analyst Carl Sibilski said. "Their business is more robust, and they're comparing it to a very weak period last year."\nCantalupo said the company will soon decide the future of its partner brands, which include Chipotle Mexican Grill, Boston Market and Donato's Pizza. McDonald's said earlier this fall it would take unspecified fourth-quarter charges amid speculation it might spin off the brands into a separate company, retaining a large equity stake.\nIndustry experts say the partner brands, providing just 2 percent of revenue, have been a distraction while the golden arches still faces challenges with service, food quality and new products in a crowded fast-food market.\n"The biggest bang for the buck is to get the McDonald's brand back to its previous level of excellence," Sibilski said.\nMcDonald's shares, which have more than doubled since last March, fell 35 cents to $25.64 in afternoon trading on the New York Stock Exchange.
(12/02/03 5:22am)
CHICAGO -- Boeing Co. chairman and chief executive Phil Condit, citing a year of controversies involving the huge aerospace manufacturer, resigned unexpectedly only days after the company fired two other Boeing officials for an alleged ethics breach.\nThe company's board accepted Condit's resignation after deciding "a new structure for the leadership of the company is needed," Boeing announced Monday, saying the decision was made several days ago.\nThe stunning move comes as the company is facing scrutiny by the Department of Defense for a much-criticized government plan to acquire Boeing 767 planes for use as refueling tankers and answering questions about the ousters of two executives for ethical misconduct during the period it was being negotiated.\nLewis E. Platt, the former Hewlett-Packard Co. CEO chosen to replace Condit as chairman, stressed that there appeared to be "nothing whatsoever" connecting Condit to the ethical issues that resulted in those firings.\nFormer Boeing president and chief operating officer Harry C. Stonecipher, 67, who retired last year, takes over immediately as president and CEO.\nCondit, 62, is being kept on to help with the transition before retiring on March 1, according to the company; he will not remain on the board.\nIn a conference call, Condit said he had first offered to step aside a week and a half ago, with the resignation becoming final Sunday "after a great deal of soul-searching."\n"I ultimately concluded it was the best decision for the good of the company," he said. "In the end, I concluded that the controversies and distractions of the past year were obscuring the great accomplishments and performance of this company. My fear was we would get bogged down.\n"I believe the best way for the company to stay on track is to step aside and bring in new leadership."\nBoeing has been roiled for months by ethical controversies over the aggressive methods it used to obtain lucrative defense contracts.\nThe shake-up comes a week after Boeing unexpectedly fired its chief financial officer, Mike Sears, for unethical conduct, saying he negotiated the hiring of an Air Force missile defense expert while she was still working for the Pentagon and was in a position to influence Boeing contracts. Sears has denied any wrongdoing.\nSears was dismissed along with the former Air Force official, Darleen Druyun. She was hired earlier this year as vice president and deputy general manager of Boeing's Missile Defense Systems unit.\nCondit had been with Boeing since 1965, when he joined the company as an aerodynamics engineer. He has been chief executive since 1996 and chairman since 1997, the company's seventh chairman since it was founded in 1916.\nPlatt praised Condit's "characteristic dignity and selflessness in recognizing that his resignation was for the good of the company" and said the board "is in unanimous agreement that the company has been pursuing the right transformation strategy and that Boeing is in excellent financial condition."\nStonecipher said on a conference call that a primary task of the new leadership is to strengthen the company's reputation with customers, employees and investors after the recent controversies.\n"We have the right strategy," Stonecipher added. "The task before us is to execute ... Boeing is a great company with tremendous capabilities to define the future in each of our markets and deliver consistent, profitable growth."\nFor decades, Boeing was primarily an aircraft maker, earning most of its money from its jetliners. But in the aftermath of the Sept. 11, 2001, terror attacks, Boeing's defense division now brings in more revenue than commercial airplanes. Boeing has expanded its space, communications and other businesses as well.\nRival Airbus expects to eclipse Boeing this year as the world's largest commercial jet manufacturer.\nDefense Department investigators are examining a newly approved deal to acquire 100 Boeing 767 planes for use as midair refueling tankers.\nThe deal was criticized this fall when documents revealed that Druyun, then the principal deputy assistant Air Force secretary for acquisition and management, told Boeing that Airbus had submitted a bid $5 million to $17 million less per plane than Boeing's offer.\nLast Friday, two senators who have long criticized the plan -- Republicans John McCain of Arizona and Peter Fitzgerald of Illinois -- said in a letter to Defense Secretary Donald Rumsfeld that it would be "irresponsible" for the department to go ahead with the deal without a full review into the firings.\nThe agreement, in which the Air Force would lease 20 tankers and buy 80, was authorized as part of the defense appropriations bill signed Nov. 24 by President Bush.\nIn July, the Pentagon punished Boeing for stealing trade secrets from rival Lockheed Martin to help win rocket contracts. Boeing has been indefinitely banned from bidding on military satellite-launching contracts, which has already cost it seven launches worth about $1 billion.\nA spokesman for the union representing engineering and technical workers at Boeing called Condit's departure "a real shock" and said there would be trepidation among the workers at Stonecipher's ascension to CEO.\n"There was no love lost between Mr. Stonecipher and the SPEEA-represented employees three years ago when our union went on strike," said Bill Dugovich of the Society of Professional Engineering Employees in Aerospace.\nBoeing's stock rose 10 cents to $38.49 in morning trading on the New York Stock Exchange.
(12/10/02 5:16am)
CHICAGO -- United Airlines made the largest bankruptcy filing in aviation history Monday, saying it was the only way to keep the world's No. 2 airline flying after two years of heavy losses. \nThe Chapter 11 filing was the sixth-largest ever as measured by assets. The suburban Chicago-based company has lost $4 billion in the last two years due to a slumping economy, flawed business strategies and the Sept. 11 terrorist attacks. It faced debt payments of $875 million later this week. \n"We're in control of United's destiny,'' United CEO Glenn Tilton said in a telephone interview. "We've made a good decision for United. It is in fact Chapter 1. ... This is a tremendous opportunity for United to transform this company and to emerge stronger than ever." \nTilton told customers and employees at O'Hare International Airport that the carrier would keep flying. "We are now going to take this occasion to create a new beginning for United," he said. \nTilton said he expects the bankruptcy process to be completed within 18 months. \nAt a bankruptcy hearing at 7 a.m., Chief Judge Eugene R. Wedoff issued orders allowing United to keep operating until another hearing Monday when he is to issue further orders allowing the airline to continue its operations. \nUnited said it obtained $1.5 billion in financing from several banks to continue operating. The airline said it has $800 million cash on hand. \nJames Sprayregen, an attorney for United, told Wedoff that the company was losing between $20 million and $22 million a day this month and desperately needed to cut costs. The company and a coalition of union leaders were scheduled to meet Tuesday to begin talks about reducing costs. \nThe airline has promised to keep flying while it sheds costs under the auspices of a bankruptcy judge and overhauls its business plan to try to become profitable again. As of Monday's filing, United had assets of $22.8 billion and liabilities of $21.2 billion, the company said. \nUnited operates about 1,700 flights a day, or about 20 percent of all U.S. flights. It has the most extensive worldwide route structure of any airline. \nThe bankruptcy filing will come at a steep price for the 83,000 employees who own 55 percent of the company. A bankruptcy court judge is almost certain to order wage and job cuts and could dissolve the employee stock ownership plan. \nTwo of United's unions, the Air Line Pilots Association and the Association of Flight Attendants, said both sides must work together during restructuring. \n"Any successful restructuring of United in bankruptcy must involve continued cooperation and collaboration among ALPA, United management and all of the company's labor unions," the pilots' union said. We look forward to those discussions." \nThe carrier's stock, which reached $100 a share in 1997, rose 10 cents to $1.03 a share in afternoon trading on the New York Stock Exchange Monday. \nThe bankruptcy restructuring also is likely to result in fewer flights. Experts say frequent-flier miles and basic fare levels are likely to be retained for the short term, although fare hikes are likely over the longer haul. \nA spokesman for United's pilots union urged passengers Sunday not to abandon the airline during a bankruptcy filing. \n"This is going to be painful for the stockholders and the employees, but the airline's going to keep flying and we're going to come out of this stronger," pilot Herb Hunter said. "The passengers shouldn't notice any difference." \nAirline consultant Robert Mann said the company will have to keep the morale of United's workers from falling too low. \n"It's certainly demoralizing to employees, and the risk is that it will somehow translate into less friendly service -- in effect getting customers in the middle of an emotional problem," said Mann, of R.W. Mann & Co. in Port Washington, N.Y. \nOn pace to lose an industry-record $2.5 billion this year, United had pinned its last hopes of avoiding bankruptcy on getting federal backing for $1.8 billion of a $2 billion loan that banks wouldn't otherwise provide. But the Air Transportation Stabilization Board, created last year to help the airline industry recover after Sept. 11, rejected United's request on Wednesday. \nWhite House spokesman Ari Fleischer declined to comment on the bankruptcy filing. Fleischer said the Bush administration would not second-guess the stabilization board's decision. \nThe linchpin to United's proposal was $5.2 billion in labor cutbacks by 2008, but the three-member federal panel said the airline's business plan was financially unsound and a loan guarantee would have risked U.S. taxpayers picking up the tab. \nUnited has struggled even more than other airlines during the industry's worst-ever slump. The carrier already had lost about $1 billion since mid-2000 by the time of the attacks because of labor turmoil, the industry's highest costs and several failed strategies, including a costly and time-consuming bid to acquire US Airways -- itself now in Chapter 11 bankruptcy. \nUnited cut service and laid off nearly 20,000 workers after the terrorist attacks, but it hasn't come close to making up for revenue lost from the drop-off in business travel. \nUnited's filing dwarfs all other airline bankruptcies. The previous largest was by Continental Airlines in 1990. It is the 11th time a major U.S. airline has filed for bankruptcy since deregulation in 1978, including TWA three times.
(10/22/02 6:33am)
CHICAGO -- United Airlines said Monday that it is cutting 1,250 more jobs, or 1.5 percent of its work force, and closing three reservation centers as part of cost-cutting efforts aimed at saving the troubled carrier about $100 million annually. \nMore cutbacks are expected later this week by United as it joins other airlines in trimming back this fall to try to fight declining air traffic and mounting losses. \nThe announcement came three days after United, which is restructuring in an effort to stay out of bankruptcy, announced an $889 million third-quarter loss and said its operations have been losing about $7 million a day. \nThe Elk Grove Village, Ill.-based airline also said it will close a maintenance line and convert five cities to United Express service. \nThe moves came as United prepares to file an updated business plan with the federal government this week, hoping to strengthen its application for further financial assistance by detailing cost cuts and showing progress from weeks of concession talks with unions and lenders. \nThe nation's No. 2 airline, which has lost $4 billion since the middle of 2000, is seeking a $1.8 billion loan guarantee from the Air Transportation Stabilization Board to meet impending debt payments and help it return to profitability. \n"United is facing its toughest challenge ever,'' said Glenn Tilton, the carrier's recently named chairman, president and chief executive. "These actions are unfortunately necessary given the current weak revenue environment. Like other airlines, we need to make sure that we correctly match supply with demand.'' \nTilton made clear he is still counting on unions to agree to substantially more cutbacks at the airline, which is 55 percent owned by its employees. \n"These painful cuts will lower some of our costs, but they will not provide the labor-cost savings we need for our recovery plan to succeed,'' he said. \nUnited and the leaders of its five unions have agreed in principle on a target of $5.8 billion in labor concessions over 5 1/2 years. But implementation of such an agreement hinges on separate deals being reached with each union, and the International Association of Machinists is balking at some terms of the latest proposed concessions in direct talks with the company. \n"If these terms are not resolved, acceptance of the United Airlines recovery plan may not be ratified,'' Scotty Ford, president of IAM District 141-M, and other union officials said Sunday. \nTalks between the machinists and the company about the recovery plan and the layoffs were continuing late Monday afternoon, IAM spokesman Joe Tiberi said. He had no details. \nThe latest layoffs, which come on top of 20,000 made after the terrorist attacks in September 2001, largely affect mechanics and reservations workers -- both represented by the machinists union. \nUnited said that as of Jan. 7 it will convert to United Express service in Eugene and Medford, Ore.; Cedar Rapids, Iowa; and White Plains and Syracuse, N.Y. It said United Express carriers SkyWest, Air Wisconsin and Atlantic Coast Airlines can more efficiently serve those cities. \nThe switch will result in 150 layoffs. \nUnited said it also will close down one of its three Boeing 757 maintenance lines at its Indianapolis maintenance center, resulting in the layoffs of 250 mechanics as well as an additional 160 line maintenance positions related to schedule reductions. \nIt also will close its reservations offices in Indianapolis, San Francisco, and Long Beach, Calif., on Jan. 4, resulting in the layoffs of 686 employees. Nine reservations centers will remain. \nThe airline said it will announce additional adjustments to its schedule and staffing levels soon -- expected to be later this week, according to spokesman Joe Hopkins. He said he did not know what day the changes to the loan guarantee application would be filed. \nUnited currently operates more than 1,900 flights daily. As of Oct. 7, it had just under 84,000 employees, including 8,767 pilots, 22,294 flight attendants and about 37,000 machinists' union members -- encompassing mechanics, ramp, and reservations and customer service employees. \nShares in United's parent company, UAL Corp., closed 22 cents higher Monday at $1.93 on the New York Stock Exchange before the company's announcement.