Bastian on list of candidates for Delta CEO job
(Atlanta Journal-Constitution, The (KRT) Via Thomson Dialog NewsEdge) Oct. 1--As the oldest of nine children, Ed Bastian grew up being in charge of things. So it may be natural for him to want to run Delta Air Lines. Like many a politician, he protests he is not seeking higher office.
"I'm very engaged with my full-time job. I spend zero time thinking about any other job," Delta's chief financial officer said in a recent interview at the carrier's Atlanta headquarters.
But after being passed over twice for the CFO post, leaving Delta and then returning to get the top finance post just as the airline plunged into a bankruptcy reorganization, Bastian is now considered a contender to ascend to the ultimate job.
Chief among those who've floated Bastian's name is Delta's current chief executive, 74-year-old Gerald Grinstein. In a speech in July, Grinstein said his successor should come from Delta's ranks. He immediately mentioned Bastian and Chief Operating Officer Jim Whitehurst, implying they are viable internal candidates.
Bastian and Whitehurst were named to their current posts on the same day a little over a year ago.
Whitehurst has been highly visible within Delta, conducting numerous meetings with flight attendants and other employees as part of a campaign to forge a more customer-friendly company. Outside Delta, however, he so far has kept a lower profile.
Bastian, on the other hand, has been the face of Delta at numerous bankruptcy hearings and related proceedings. The 49-year-old accountant, who hails from upstate New York, runs Delta's financial affairs and quarterbacks its Chapter 11 reorganization.
It's a job that demands financial savvy, iron nerve and diplomatic skills.
Under Bastian's game plan, Delta has so far arranged $2 billion in financing; cut thousands of jobs; won deep concessions from pilots while scuttling their pension plan; ditched dozens of aircraft; and made other maneuvers that may ultimately lop off half of the airline's $20 billion liability load. Delta recently reported its first profitable month of operations - July - since going into Chapter 11.
Bastian looks the part of laser-focused executive. Tall and slender, he smiles easily but often wears dark, well-tailored suits and slicked-back hair that gives him a slightly edgy air.
Vernon Nagal, chief executive at Atlanta-based Acuity Brands, where Bastian briefly worked before returning to Delta, said Bastian's track record so far shows he is "absolutely the right person" to lead Delta's bankruptcy reorganization. "Ed has all the attributes to see and manage through ... all of the complexity," he said. "I think he's just done an outstanding job."
It was only 18 months ago that Bastian thought he had kissed his Delta career goodbye by taking a job as Acuity's financial chief in the summer of 2005. But as soaring jet fuel prices pushed Delta toward a Chapter 11 filing, Bastian came back to Delta - he says after company leaders asked him to return.
"I really felt pulled to come back here," he added. "It was going to be the critical point in Delta's history as to whether the company was going to survive or not, and I felt honored to be invited back to that challenge."
Saving Delta from oblivion wasn't the challenge Bastian expected when he first came to the airline in 1998 as its new controller, reporting to then-CFO Warren Jenson.
The airline industry "was a pretty exciting place to be," he said. Business travelers paid top dollar. Under its new CEO, Leo Mullin, Delta minted billion-dollar profits and explored online ticket sales. While not the top financial post, Bastian's job put him charge of a department of about 750 employees.
Heading the internal financial systems of America's third-largest airline was a big jump for Bastian. He is the oldest of four sons and five daughters of a dentist and a dental hygienist who ran their practice out of their home in Poughkeepsie, N.Y.
Growing up, Bastian jokes, he was something of an overseer of his siblings "by necessity," adding that they remain close. He wanted to be a professional ballplayer but chose accounting when he went to St. Bonaventure University, a small Franciscan university south of Buffalo, N.Y. He figured he was good with numbers, and he wanted "to understand what drives a business."
By the early 1990s he'd been in the New York City office of Price Waterhouse for 13 years, rising to partner in the big accounting firm. He was married, with a daughter and two sons. One highlight of the Price Waterhouse gig: Bastian appeared on TV during client MTV's music awards show as the accountant in charge of ballots.
But Bastian itched for a more active role in a company.
"He was a very serious type of guy, like he is today," recalled Gary Pell, a partner in the same office with Bastian. "He's extremely competitive. Business makes him tick."
Pell, now chief knowledge officer at PricewaterhouseCoopers, said Bastian was "obviously an up-and-comer."
Bastian's next move was to Dallas as controller of Frito-Lay's international division. He became a vice president in charge of "business process re-engineering," a job that he said "took me very much out of my finance world and very much closer to the business side of it."
When he moved to Delta, Bastian had no particular experience with airlines beyond being a frequent flier. By then he was divorced and, in addition to business travel, flying regularly back to upstate New York to see his children. He later remarried and now lives in Duluth with his wife and their 3-year-old daughter.
Bastian lost out on a promotion to Delta's financial chief in 2000, when the airline instead promoted M. Michele Burns.
"And I'll be honest with you, I was disappointed I didn't get it," said Bastian. But Burns "was good to work for," he added.
Bastian had a second shot at the CFO post when Burns - who became a lightning rod in an executive bonus controversy that rocked Delta in 2003 - left Delta near the end of that year, along with Mullin and most of his top managers. Grinstein came off the board to take over Delta's faltering effort to cope with its post-9/11 financial meltdown.
Instead of picking Bastian as CFO, Grinstein brought in an old colleague, Mike Palumbo.
After working awhile under Palumbo, Bastian resigned in April 2005 to realize his CFO ambitions at Acuity, an Atlanta-based maker of lighting fixtures and specialty chemicals.
He left Delta with a pension lump sum of $568,767 and a $198,720 severance package. He said his pension sum was not from the same kind of protected trust funds that other Mullin-era top executives got, angering many employees. "I had no special favors, which is one reason I've been able to come back," he said.
Nagel, Acuity's CEO, said Bastian had barely been on the job six weeks when the new chief financial officer came into his office shortly before a big meeting and closed the door.
" 'Vern, I don't know how to tell you this,' " Nagel recalled Bastian saying. He said Bastian explained that a couple of Delta directors had talked to him about returning as CFO. Bastian wanted to know what Nagel thought he should do.
"I said follow your heart. I pretty much knew he was going to do that [go back to Delta] after he came in," said Nagel, who added that he was not angry and remains friends with Bastian.
Nagel, Pell and others who have worked closely with Bastian say he would make a good chief executive at Delta or another large company.
Not everyone agrees.
Cathy Cone, a retired Delta flight attendant who heads a court-appointed committee representing nonpilot retirees, believes Delta should hire an outside airline executive with more experience. She said Bastian angered many retirees with a recent comment that some were starting second careers while keeping their Delta health benefits, costing the airline.
Cone said Bastian's comments were insensitive.
"The better job that [Bastian] does of reducing or eliminating retiree health benefits," she said, "the better reward he will receive when Delta exits bankruptcy in Delta stock options, benefits and profit-sharing."
Asked about such complaints, Bastian said, "I am very peaceful with what I'm doing.
"It feels horrible to be fighting with your employees," he said. "But we need to step back and almost be surgical about making decisions about what is necessary to save Delta. ... You've got a responsibility to those 50,000 employees to save the company, to save those jobs."
William Reeves, managing director at executive search firm Spencer Stuart, said he was impressed with Bastian's abilities when he helped recruit him to Acuity - and still is since he returned to Delta.
"He has really been battle-tested in that role and has done a great job," said Reeves. "He is very well regarded."
Still, Reeves said it's premature to start handicapping the Delta CEO race. One reason is that Delta's creditors will have a lot to say on the issue and may push for a seasoned top executive from outside. Unless Grinstein leaves earlier, the decision will ultimately belong to a new board of directors constituted when Delta emerges from bankruptcy. Delta expects that to happen by mid-2007.
For his part, Bastian said Delta's restructuring has forged a team that should produce Delta's next CEO.
"The skills exist within the family here to take it forward," he said, adding: "I have full confidence that whoever the board picks, I'll be very happily employed at Delta, however the outcome."
EDWARD H. BASTIAN:
--Title: Executive vice president and chief financial officer
--Hometown: Grew up in Poughkeepsie, N.Y.; lives in Duluth.
--Family life: Married to Anna; two sons and two daughters, ranging in age from 20 to 3.
--Past positions: Executive jobs at Price Waterhouse and Frito-Lay, a unit of PepsiCo, before joining Delta in 1998 as vice president of finance. Later became senior vice president and controller. Left Delta briefly in 2005 to be chief financial officer at Atlanta-based Acuity Brands. Returned to Delta as chief financial officer and head of its bankruptcy restructuring.
--Hobbies: Golf, travel, reading
--Education: Bachelor's in business, St. Bonaventure University, Olean, N.Y.
--On retooling Delta: "I don't think many corporate jobs in America, much less CFO jobs ... get that same level of appreciation and sense of purpose. I really felt pulled to come back here."
To see more of The Atlanta Journal-Constitution, or to subscribe to the newspaper, go to http://www.ajc.com.
Copyright (c) 2006, The Atlanta Journal-Constitution
Distributed by McClatchy-Tribune Business News.
For reprints, email firstname.lastname@example.org, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
Industrial IoT Track
Autonomation and Predictability in IIoT
Autonomation and Predictability in IIoT
IoT Evolution Track
Leverage Data for New Profit Centers
Leverage Data for New Profit Centers