Hollis Harris Leaves Continental Airlines
Hollis Harris Leaves Continental Airlines
Aug. 22, 1991
HOUSTON (AP) _ Continental Airlines says its shakeup of top management - including Chairman Hollis Harris - will speed its emergence from nearly nine months of bankruptcy restructuring that is trying creditors' patience.
Meanwhile, the Wall Street Journal reported today that Northwest Airlines has resumed efforts to acquire Continental. The newspaper said officials of both carriers have been meeting over a possible combination.
Merger talks had broken off in March because of emerging labor problems. The Journal said discussions resumed partly at the request of Continental's creditors committee.
In the second day of turmoil at the troubled carrier, Harris, 59, and the board of directors agreed Wednesday he should step down as head of the airline a year into the job.
His departure and that of R. Lamar Durrett, executive vice president for personnel and administration, came one day after a bankruptcy court denied a request from creditors to file their own restructuring plan for the airline.
The creditors complained that Continental was not making enough progress fast enough to emerge from the Chapter 11 bankruptcy protection it sought in December.
At virtually the same time that U.S. Bankruptcy Judge Helen Balik gave Continental an extension Tuesday to file its reorganization plan, the airline announced major changes beginning this fall. They include 600 job eliminations, 133 flight suspensions, the end of its operations at Houston's Hobby Airport and the removal of 22 leased aircraft from its fleet.
''The new management team ... will be a strong force for managing and expediting Continental's restructuring in the face of adverse industry conditions,'' said Carl Pohlad, chairman of the board of the parent company and newly-named chairman of the airline.
''They will be focusing a great deal of attention in that area so that we can achieve our goal of emerging from Chapter 11 sooner rather than later.
The carrier has been plagued with huge losses due in part to the effects of recession and the Persian Gulf War that have hurt the entire industry.
After a late Wednesday board meeting, Pohlad issued a statement in which he said, ''After much soul searching, the board of directors on one hand, and Messrs. Harris and Durrett on the other, reached the mutual conclusion that a change in leadership was appropriate.''
Harris was chairman, chief executive and president of the airline and president and chief executive of the parent company, Continental Airlines Holdings Inc.
In Harris's place, Continental named Robert R. Ferguson III as president and chief executive officer of the holding company.
Ferguson also was named to the airline's board of directors and becomes vice chairman and chief executive of Continental Airlines. Lewis Jordan was named president and chief operating officer of the airline. Pohlad will be a non-executive chairman of the airline.
In the last 18 months, Continental's losses have set records for the industry, posting a $2.3 billion loss for all of 1990. That loss included a $2.2 billion loss in the fourth quarter, which the company attributed to write-offs from the liquidation of sister airline Eastern, and from poor economic conditions.
Last month, it posted a second-quarter loss of $109 million.
Harris came from Delta Air Lines to replace Frank Lorenzo last August. Harris was president and chief operating officer of Atlanta-based Delta, having risen from a position as transportation agent in 1954.
When he left Delta, Harris seemed to be just what Continental needed - someone with the financial savvy to keep the carrier afloat and with the charisma needed to encourage dispirited employees.
Several months after Harris was hired, employees referred to him as ''a breath of fresh air.''
Lorenzo, who is still a member of Continental's board, stepped down from his management position at the airline after continuing labor disputes with Continental and Eastern Airlines, which stopped flying in January after fighting unsuccessfully to reorganize under Chapter 11.
Ferguson had been executive vice president for finance and marketing since July 17. Before that, he was senior vice president for corporate development of the airline and vice president, chief financial officer and treasurer of the parent company since October 1990. He has been an officer of Continental Holdings and Lorenzo's now-defunct Texas Air Corp. since 1985.
Jordan had been executive vice president and system general manager. He joined Continental in 1986.
Charles Goolsbee was appointed executive vice president for corporate affairs at the airline and executive vice president and chief operating officer of the holding company.
Goolsbee had been senior vice president for corporate affairs since July 17. Previously he was an executive with Texas Air.
A. Thomas Hickey was named non-executive vice chairman of the airline.