St. Louis University announced today that they have un-invited the businessman who was supposed to speak at commencement next month. His name is Donald Carty -- but in St. Louis these days, his name is really mud.
Donald Carty is the CEO of American Airlines, which employs thousands of people here at their hub at Lambert Airport. Or at least he is CEO for another day or two, before they fire him. That request will come from the board of directors, following a disastrous series of events over the last week, culminating with American Airlines' latest earnings announcement.
Under Donald Carty, American Airlines lost one billion dollars.
A billion dollars. That's a one with three commas and nine zeroes after it. Not in a decade, not in a year, but in a quarter, three months.
A billion dollars in three months.
If the company had been run by someone else, anyone else, could they possibly have done worse? You could have pulled a random person out of the line waiting to board an American flight, told them, "You now run this airline!" -- and they would have stood a good chance of doing better than Donald Carty. Hey, if they only lost nine hundred million, they'd win that bet.
On our plus/minus list of things accomplished during Carty's reign, here's how we stand. The plus side has exactly one good entry: they added more leg room between the rows on the planes. I'm a tall guy, so I like that one. Over on the negative side, well, let's start with that missing billion dollars.
A billion dollars is more than Delta and Northwest lost, combined. In business terms, that's the definition of running a company into the ground, which is not a phrase you want associated with big metal things that defy gravity all day everyday.
The scale seems to be tipping a bit, and we've only just begun (to quote a Carpenters song that's no doubt playing on one of those audio channels no one listens to on an airplane -- they could've saved some money just by eliminating that unnecessary entertainment expense!).
Not only did Carty's Cartel sit in the saddle and hold the reins while this stagecoach went out of control, they also lied to their employees. They told them that, unless they made sacrifices, the company would have to declare bankruptcy. So they got their unions to give up hundreds of millions of dollars in concessions, laid off thousands of people, told the rest they'd have to take pay cuts of up to 23% and have their benefits reduced. Now it looks like they'll have to declare bankruptcy anyway.
Among the hardest hit are the former TWA workers who were swallowed up when American bought that airline. These folks survived Carl Icahn, but they should have seen real trouble ahead when Carty And Friends told them whoppers about how they were essential to the operation, how everyone would thrive as a bigger team, and how happy American was to welcome them to the family. Some family. Yeah, we're happy to have you stay over, but you're eating at the kids table and sleeping in the doghouse.
What did Donald Carty and his executive pals at American get while the rank-and-file saw their careers upended? They gave themselves extra pension benefits and a raise -- a 100% salary bonus. They called it a "retention bonus," because they said the airline had to pay them a lot or some other company might steal them away. Because there are lots of other corporations that are frothing at the mouth to hire the kind of economic geniuses who can lose a billion dollars in three months.
When the news of this deception came out, Carty started his mea culpa act. He actually told the employees that his first priority had always been to be honest with them, and he never intended to mislead anybody. Right. Translation: I didn't think anyone would see that small print about the bonuses and benefits we gave ourselves, and I'm sorry -- sorry that I got caught.
He apologized for the "mistake in judgement" and hoped the unions would forgive him. Don't count on it, Don. If the unions had their way, you'd be sitting in the middle seat in coach between a crying baby on the aisle and a smelly fat guy with a weak bladder in the window seat on a trans-Pacific route, held up on the tarmac by bad weather for two or three hours with no air conditioning and a malfunctioning vent blower above your seat.
This is the man who was to give the commencement address. That would have made all the economics majors and MBA candidates proud to be entering the business world. They haven't even started their careers, and they're already a billion dollars ahead of some hotshot CEO!
Now, the only question is, who can SLU get to fill Carty's slot as commencement speaker? Anyone know what Ken Lay is doing on May 17th?Labels: columns