By DAVID KOENIG, Associated Press
FORT WORTH, Texas (AP) — It took Thomas W. Horton 26 years to reach the corner office, but the promotion came with a catch:
His company was going into bankruptcy protection.
Horton was elevated from president to CEO of American Airlines parent AMR Corp. on a late-night phone call last November. On the same call, the company's board finalized the decision to file for Chapter 11 the next morning. Horton says he got little sleep, knowing that he would have to explain the move to thousands of investors, employees, business partners, and reporters.
The filing wasn't a surprise. American, once the world's biggest airline and known for innovations such as the frequent-flier program, had lost more than $10 billion since 2001. Fuel and labor costs soared, competitors grew bigger and tougher, dropping American to third place in the U.S. airline industry. The company seemed to lack fresh ideas. Investor patience with CEO Gerard Arpey was running out.
The 50-year-old Horton, a devoted runner who trains for marathons, wants to set a fast pace and push American through bankruptcy. He says the company can't afford to move slowly in Chapter 11 unless it wants to be sold to a rival or broken up. He's willing to make unpopular moves — he wants to cut 13,000 jobs.
Horton sat down recently for an interview with The Associated Press in his sixth-floor corner office. He has a view of Dallas-Fort Worth International Airport on the horizon. One wall is dominated by a photo of aviation pioneer Charles Lindbergh in the cockpit of a Robertson Aircraft plane, one of the companies that formed American Airlines 80 years ago.
Horton discussed managing in the 21st century, dealing with unhappy workers, and his plan to rescue American. Here are excerpts from the interview, which was edited for length:
Q: What happened the day you were picked to replace Gerard Arpey as CEO?
A: We had a board meeting in New York. I flew back here that night, and we had a board telephone call late that evening to make final what had been tentatively decided earlier in the day. I was made chairman and CEO on that phone call, and the next morning we filed. That was a night that I didn't get a lot of sleep.
Q: Did the board think AMR needed a new face as CEO going into restructuring?
A: I think Gerard has said publicly that his view was that maybe I was better wired for this task. I don't know if that's true or not. Time will tell.
Q: What's it like to lead a company during this kind of turmoil?
A: I'll get back to you in about a year.
Q: But I'm sure when you were back at the Cox School (Southern Methodist University's business school), you didn't imagine you'd make CEO on the eve of the company going into bankruptcy.
A: No, I did not imagine that. (Laughs) This was not exactly the way I would have planned it. But I do love this company. It is a great American institution. It's a company that bears the name American, it flies the flag all over the world, and so I think there could be no higher duty or calling than to return this company to leadership. That's a tall order, but I'm going to give it everything I've got.
Q: Do you hear from (former AMR CEOs) Gerard Arpey or Bob Crandall?
A: This is a company that hasn't had many CEOs, and it's unique in that regard. That is humbling. These statues right here (he turns and points to bronze figures, each about a foot high, of a Pony Express rider and an Indian warrior) belonged to C.R. Smith (CEO of American Airlines for more than 30 years; he died in 1990). I feel the weight of the office, and I do talk to these folks. I hear from Bob, and I talk to Bob often, and I hear from Gerard.
Q: Do they offer advice or do they just say, 'Hang in there?'
A: I would say they're pretty good about offering advice when asked for it.
Q: They don't offer it unsolicited?
A: Not often.
Q: What was the unsolicited advice?
A: Oh, I would never betray that.
Q: What can or should a CEO do to boost morale when the company is going through bankruptcy?
A: The most important thing we can do is make the company successful, make it a winner again. People want to be part of a winner. Look, I've talked to thousands of our employees over the past three months. I've just spent a lot of time meeting with people, and it's really been helpful to me because I get to hear perspectives. I also get to explain what I think the future of the company can be. But often when you hear someone who is unhappy and you get up under it, it's often that the company has not been successful.