Gerald Grinstein

Gerald Grinstein is the former CEO of Delta Air Lines, Inc. of Atlanta, Georgia, the world's second largest airline. Grinstein came to the position in 2004, after CEO Leo F. Mullin stepped down amid a controversy over executive retirement and cash bonus plans that were deemed excessive. He is succeeded by Richard Anderson, a former Northwest Airlines executive, although Grinstein expected one of his two deputies for the top job.

Grinstein received a BA from Yale University in 1954 and a JD from Harvard Law School in 1957.

From 1985 to 1995 Mr. Grinstein was also CEO of Burlington Northern Railroad (BN). In this position he helped form the corporate entity that resulted in BN's merger which formed the BNSF Railway. [cite web| url=http://www.nndb.com/people/413/000126035/| title=Gerald Grinstein| work=NNDB| publisher=Soylent Communications| year=2008| accessdate=2008-02-28| ]

Previously, Grinstein served as CEO of Western Airlines. When Western and Delta merged in 1987, he was appointed to Delta's Board of Directors and has remained on the board since then. He took over as CEO at a time when Delta was in a deep financial crisis. Grinstein embarked on a number of aggressive cost cutting measures, including a major out-of-court restructuring of the company's long term debt and outsourcing of some heavy aircraft maintenance and ramp handling operations. He successfully negotiated with ALPA, the Delta pilots' union, for deep concessions in order to help the company stave off bankruptcy.

Grinstein also set about regaining the trust and confidence of Delta's rank and file employees, most of whom still harbored a great deal of resentment over the previous management's actions. He promised open, honest communications and granted himself an annual salary of $450,000 with no bonuses or stock options of any kind, well below the multimillion dollar compensation packages accepted by Mullin and his top executives at a time when Delta was losing billions of dollars.

Although these initiatives were largely successful, upward pressure on fuel prices and fierce competition from low cost carriers continued to keep Delta perilously close to bankruptcy. Hurricane Katrina resulted in a dramatic spike in jet fuel prices in Atlanta, which houses Delta's largest hub operation. Delta, which had previously sold its fuel hedges in a move to raise cash, was forced into an untenable cash position. On September 14, 2005, Delta and its subsidiaries filed a petition for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. At the time of the bankruptcy filing, Delta's total debt was approximately $23.8 billion.

During Delta's bankruptcy, Grinstein and his management team accelerated the restructuring process that they had started in 2004. Delta aggressively shed non-performing assets, slashed the mainline fleet from nine models to five, and shed thousands of jobs. By 2007, Delta's mainline operation employed approximately 47,000, down from a high of 78,000 in 2001. Grinstein successfully negotiated a second concessionary agreement from ALPA, imposed a second round of paycuts on nonunion employees, and froze the nonunion employee pension plan. He reduced his own pay by 25%, to approximately $325,000 per year.

Grinstein also oversaw a massive restructuring of Delta's network footprint, shuttering the airline's Dallas-Fort Worth hub and slashing domestic flight schedules across the remaining hubs in an effort to redeploy aircraft and personnel to more profitable international markets. Delta entered more than 50 new international markets between 2005 and 2007.

In November 2006, US Airways launched an unsolicited hostile takeover bid for Delta, which Grinstein and his rank and file employees successfully fended off. Grinstein has announced that he plans to retire from Delta sometime in the summer of 2007.

Grinstein has announced that he will not accept any cash or stock awards resulting from Delta's successful emergence from bankruptcy in April 2007. He will instead direct the company to use these funds to establish a scholarship fund for Delta employees and their children and a hardship fund for Delta families.

References

External links

* [http://www.delta.com/about_delta/corporate_information/corporate_biographies/grinstein/index.jsp Gerald Grinstein Corporate Biography]
* [http://www.townhall.com/columnists/column.aspx?UrlTitle=heres_to_the_richest_man_in_town&ns=MattTowery&dt=03/22/2007&page=2 Here's To The Richest Man In Town] by Matt Towery