Comment on – MERGER FEARS: A TALE OF TWO CITIES: Atlanta To Put Up Fight For Delta; Business Leaders Vow To Keep ‘hometown Airline At Home’

Commentary on Business & Society

 

Gather round, kiddies, for a nostalgic view of the airline industry and its exciting early days. Airlines and the cities they headquarter in are very importawnt business partners! Back in our early journalistic days we were “an aviation writer,” something there are very few if any of today in newpapers, wire services, even broadcasting (the ABC TV Network even had a full-time av-writer in the space shot days).

 

Most airlines with familiar brand names came to life in the 1929 – 1940 era and were headed by luminaries and industry legends — CR Smith at America; WE Woolman at Delta; WA Patterson at United. (Most didn’t use their first names, as you see — the airline brand was more important to build!)

 

Airlines were glamorous endeavors (once upon a time), before the cattle-car days that came with wide-bodies like the Boeing 747. Why, this writer even remembers having to wear a suit and tie when boarding first-class on most airlines!

 

Airlines grew up around cities that they served – and the identification as an “airline city” was very important to local business interests — as it is in Atlanta today.

 

Atlanta had Delta (which began life as a southern crop-dusting operation); United called Chicago home; American Airlines started in Texas, moved to Chicago and then called New York City home before moving back to Dallas-Fort Worth. Pan Am (“Pan American World Airways,” America’s foreign flag carrier to the world!) was always a New York City fixture with additional outposts in Miami (its gateway to Latin America). Eastern started out in New York with Rockefeller Family seed money, with WW I aviation hero Eddie Rickenbacker at the helm; it shifted to Miami after space hero Frank Borman took over and looked to cut costs. Continental Air Lines was headed by the dashing Bob Six who called Denver and the Rockies — the Continental Divide — home. Trans World Airlines (TWA) began as Transcontinental Western Air (TWA) and called New York home “at the end” (it was absorbed into American Airlines). The legendary aviator and investor Howard Hughes owned this airline (and others).

 

Regional airlines — Allegheny before it became USAirways — similarly served local cities they grew up in. Mohawk, upstate New York. Southwest — today’s darling profit-maker — was a tiny Dallas-based carrier serving Texas. Alas, nothing is forever (especially in business, and airlines are businesses, even if losing money most of the time!)

 

Hometown business interests were loyal to their hometown airline — and corporate fliers made up the bulk of scheduled airline profits. Then came de-regulation (late-170s/early 1980s). Things were never the same for airline managers — and passengers!

 

We hope Atlantans get to keep their airline at home. What would Atlanta be without Coca-Cola headquarters? Looking at the “Official Airline Guide” of late-1937 — 70 years back — we find Delta Air Lines — “the trans-Southern route” — connecting Atlanta with such cities as Birmingham, Charleston, Shrevesport, and Dallas. And its been an important part of the great city of the south — Atlanta — ever since. Great them for campaign — Keep Delta My Delta — and in Atlanta! Good luck. If Delta were to move…it would be one more indication of how far we have moved from the glory days of the American airline industry.

 

Hank Boerner

 

Editor – AC

 

Disclosure – HB was once American Airlines’ PR manager in NYC and then manager of corporate social responsibility programs for USA. His past airline consulting clients have included Royal Jordanian, American, NY Helicopter, Tower Air, SAUDIA, and other scheduled carriers…in the good old days! Sic Tempus Fugit! Time flies indeed — especially if you are in the “flying” business.

Comment on – Push For More Minorities On Boards; Chicago United Says Many Are Qualified

Commentary on Corporate Governance and Accountability…

 

Three cheers for Chicago United — for hi;ghlighting the issues and sending a list of qualified men and women of color to the executives and board chairs at Fortune 1000 companies for consideration as board members. Board nominating committes should reach out to Chicago United if they don’t get the list (we are approaching nominee list-making for the 2008 proxy season elections).

 

The world has changed a lot and the “face of America” has surely changed in the last decades of the 20th Century. Corporate boards are seeking highly-qualified candidates and many such folk could be found if boards looked a little harder in the various minority / under-represented communities of the United States.

 

Why is this important? Consider that New York City, the world’s premier financial capital, is now a city of minorities — the majority of NYC are minority populations. (A half-million Dominicans who are wooed by canidates back in the D.R. are emblematic of the power of New York’s minorities.) We won’t have a “majority” or many “minority” populations in the not-too-distant future. Outfits like Chicago United can help forward-looking companies attract representation from under-represented communities-of-interest — good for them!

 

If you are a board member or corporate board recruiter, here’s the Web site for you: http://www.chicago-united.org/ (Take a look at their mission, capabilities, conferences and upcoming meetings.)

 

Hank Boerner

 

Editor – AC

Comment on – Fidelity shift in 2007 proxy season tips scales toward corporate political disclosure

Commentary on Corporate Governance, Investing and Political Accountability

 

Watch this trend closely — could be a freight train pounding through Corporate America in proxy season 2008 and beyond. (“Last year, a Mason-Dixon Polling & Research survey found that 85 percent of shareholders agreed that the ‘lack of transparency and oversight in corporate political activity encourages behavior’ that threatens shareholder value. Commissioned by the CPA, the March 2006 poll was the first examination of shareholder attitudes on corporate political spending. It also found that 94 percent of respondents supported disclosure and 84 percent backed board oversight and approval of “all direct and indirect [company] political spending.”)

 

With giant Fidelity changing its position on the issue, other mutual fund managers — and especially those in the advisory companies that cast the actual proxy vote on behalf of millions of fund owners — are finding courage and common sense to either vote “yes” on transparency and disclosure or “withold” votes and put the finger on the scale of the side of those investors voting “yes.” Good for Fidelity, Franklin Templeton, Vanguard, PIMCO,and T Rowe Price. The three top mutual fund families in the USA are Fidelity, Vanguard and American (Capital Research) — if you are a mutual fund owner in any of these complexes, you can voice your concern and let proxy vote-casters know that you are watching and these issues matter to you!

 

And you can track progress or lack of in corporate disclosure and transparency on political contributions through the excellent work of the Center for Political Accountability. (See Web site –http://www.politicalaccountability.net )

 

Hank Boerner

 

Editor – AC

 

Disclosure – portions of our retirement accounts are invested in “American Funds” – we see the parent Capital Research folks doing a better job of communicating on governance issues, but they have quite a ways to go on political disclosure positions re: companies in their portfolios.

Comment on – BE HONEST AND DEPENDABLE; TAKE RESPONSIBILITY; Integrity Wins Customers

Commentary on Accountability — and Building and Preserving Trust

 

Good advice / information sharing from author Steve Watkins in IDB for tomorrow’s leaders of corporate, public and social sector organizations. And for each of us as we build (or tear down) our “trust level” with others.

 

Are you trustable? It could make the difference between success and failure in a crunch. Lessons: Back in November 1984, auto industry veteran Lee Iacocca published his autobiography — “Iacocca, An Autobiography,” with William Novak (co-author). CEO Iacocca had run Ford (he is the father of the Baby Boomers’ favorite car, the Mustang) and was recruited to turn around the ailing Chrysler (always #3 to Ford and GM). (All proceeds from the book went to the Joslin Diabetes Center in Boston — as dedication to his late wife, Mary.)

 

Lee Iacocca was one of the most trusted men in Corporate America. On his watch, when Chrysler was found to have sold new cars that were slightly used (dealer demos)New York State officials went after the company. CEO Iacocca was appearing on the popular “Donahue Show” and the ever-confrontational host (Donahue) went after Mr. Iacocca. The leader’s response is a classic case of assuming personal accountability.

 

Yes, we screwed up, he professed (we’re paraphasing here), and we’re sorry and we’ll make it right. He went on to explain what happened, what the company was doing to fix things — and most important, assured everyone that it would not happen again. In effect, TRUST US (and trust me), he told the national TV audience.

 

He didn’t read a weasel-worded PR statement; nor a carefully-parsed lawyer’s short brief; nor did he mumble and cover his lips or look nervously off to the side for the waiting aides’ hand signals. He went straight to the point, took personal responsibility and pledged to the nation it wouldn’t happen again.

 

Trust — Lee Iacocca built his career, and his [two auto] companies’ success on it. He was human and showed it. Americans loved it, even talked about running him for president. In his book he states…

 

“There are times in everyone’s life when something constructive is born out of adversity. There are times when things go so bad that you’ve got to grab your fate by the shoulders and shake it … I’m convinced … that pushed me to take the presidency of Chrysler…” And, “… with determination, with luck, and with help from lots of good people, I was able to rise up out of the ashes…” He was referring to being fired after 30+ years at Ford (where he rose to be CEO) and then rescuing basket-case Chrysler.

 

Trust had a lot to do with — workers trusted him; auto buyers trusted him; the federal government trusted him and arranged financial support [Treasury Dept] for the turnaround; his co-workers in the C suite trusted him; some of them had come out of retirement to join the dramatic turnaround effort and others left good-paying secure jobs to join Lee in Detroit; the board of directors obviously trusted him when they picked him — a very publicly-fired [Ford] CEO. And he trusted himself. Great lessons for tomorrow’s leaders.

 

(Read the book again: “Iacocca,” Published 1984 by Bantam.)

 

Hank Boerner

 

Editor AC