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American Morning

United Airlines Files for Bankruptcy

Aired December 09, 2002 - 08:46   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


JACK CAFFERTY, CNN ANCHOR: Tough Monday morning for United Airlines, Bill.
Andy Serwer joins us now, Minding Your Business, stocks on its way to zero.

ANDY SERWER, "FORTUNE": Well, you know, it's interesting you say that, Jack, because it closed at 93 cents yesterday on Friday and in the pre-market trading, it's down 50 cents. Why anyone owns stocks of these companies that are going into bankruptcy is beyond me.

United Airlines has filed for bankruptcy this morning, Jack. Glenn Tilton, United's CEO is right now talking at O'Hare Airport. He is saying he expects the company to emerge in 18 months. He says that it's one of the strongest airlines ever to go into bankruptcy, trying to spin it so that things will look good. Seventeen hundred flights a day, 20 percent of all U.S. flights are United. The flights will go on for people who carry your frequent flyer miles are safe for now.

CAFFERTY: Fifty percent owned by the employees. How would you like to be the judge who has to be...

SERWER: Right.

CAFFERTY: ... put in charge of overseeing the day-to-day operations on the business and the financial situation of this airline. I mean, what a huge job that will be.

SERWER: It's really complicated. And of course, this goes back to all this mismanagement, mismatch -- mismanagement, Esop (ph) owned. I mean, it's been a long, drawn-out history -- not a pretty one, either.

CAFFERTY: Now, it's probably unfair to suggest that Messrs. Pit O'Neill and Lindsey are Curly, Moe and Larry down there in D.C....

SERWER: I've heard that one.

CAFFERTY: They're not having... -- you've just heard it again.

SERWER: Yes.

CAFFERTY: They're not wasting any time, though, filling in those chairs, are they?

SERWER: Yes. We have learned -- CNN has learned that John Snow has been tapped to become the new treasury secretary. There he is right there. He needs to be confirmed by Congress, however. Also, we've learned that Stephen Friedman, ex of Goldman Sachs, has been tapped to become the president's new chief economic adviser. He does not need to be confirmed. Both of these guys are doing security clearance. We're expecting an announcement on them pretty soon.

Interestingly, Snow, a lot like O'Neill, the CEO of a big industrial company, not particularly known on Wall Street -- economics background -- but what I'm hearing is that Snow is kind of a kinder, gentle O'Neill, doesn't shoot his mouth off, not prone to gasp. And what the president's going to be looking for, Jack, is for him to get new taxes going, be on board, be in lockstep with him and the economic team.

CAFFERTY: Now, one final thing. Help me out here. On Friday when they announced that they were firing Lindsey and O'Neill, the market went up. It had been down almost 100 points, turned on a time, went back up, closed higher, now they're announcing who the replacements are, the market's going to go down today.

SERWER: You know, it's hard to call these things. But I think the fact that Snow is not known on Wall Street, people are not so happy about that. This could be a temporary thing, but it is true, that futures are down. The market was down pretty significantly last week. So again, more stuff for the market to sort of absorb and take in.

CAFFERTY: All right. Andy Serwer, minding our business.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com






Aired December 9, 2002 - 08:46   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JACK CAFFERTY, CNN ANCHOR: Tough Monday morning for United Airlines, Bill.
Andy Serwer joins us now, Minding Your Business, stocks on its way to zero.

ANDY SERWER, "FORTUNE": Well, you know, it's interesting you say that, Jack, because it closed at 93 cents yesterday on Friday and in the pre-market trading, it's down 50 cents. Why anyone owns stocks of these companies that are going into bankruptcy is beyond me.

United Airlines has filed for bankruptcy this morning, Jack. Glenn Tilton, United's CEO is right now talking at O'Hare Airport. He is saying he expects the company to emerge in 18 months. He says that it's one of the strongest airlines ever to go into bankruptcy, trying to spin it so that things will look good. Seventeen hundred flights a day, 20 percent of all U.S. flights are United. The flights will go on for people who carry your frequent flyer miles are safe for now.

CAFFERTY: Fifty percent owned by the employees. How would you like to be the judge who has to be...

SERWER: Right.

CAFFERTY: ... put in charge of overseeing the day-to-day operations on the business and the financial situation of this airline. I mean, what a huge job that will be.

SERWER: It's really complicated. And of course, this goes back to all this mismanagement, mismatch -- mismanagement, Esop (ph) owned. I mean, it's been a long, drawn-out history -- not a pretty one, either.

CAFFERTY: Now, it's probably unfair to suggest that Messrs. Pit O'Neill and Lindsey are Curly, Moe and Larry down there in D.C....

SERWER: I've heard that one.

CAFFERTY: They're not having... -- you've just heard it again.

SERWER: Yes.

CAFFERTY: They're not wasting any time, though, filling in those chairs, are they?

SERWER: Yes. We have learned -- CNN has learned that John Snow has been tapped to become the new treasury secretary. There he is right there. He needs to be confirmed by Congress, however. Also, we've learned that Stephen Friedman, ex of Goldman Sachs, has been tapped to become the president's new chief economic adviser. He does not need to be confirmed. Both of these guys are doing security clearance. We're expecting an announcement on them pretty soon.

Interestingly, Snow, a lot like O'Neill, the CEO of a big industrial company, not particularly known on Wall Street -- economics background -- but what I'm hearing is that Snow is kind of a kinder, gentle O'Neill, doesn't shoot his mouth off, not prone to gasp. And what the president's going to be looking for, Jack, is for him to get new taxes going, be on board, be in lockstep with him and the economic team.

CAFFERTY: Now, one final thing. Help me out here. On Friday when they announced that they were firing Lindsey and O'Neill, the market went up. It had been down almost 100 points, turned on a time, went back up, closed higher, now they're announcing who the replacements are, the market's going to go down today.

SERWER: You know, it's hard to call these things. But I think the fact that Snow is not known on Wall Street, people are not so happy about that. This could be a temporary thing, but it is true, that futures are down. The market was down pretty significantly last week. So again, more stuff for the market to sort of absorb and take in.

CAFFERTY: All right. Andy Serwer, minding our business.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com