3 Execs Leave as Southwest Airlines Faces Challenging Year

The executives' exodus comes amid what some analysts call a slow shift in Southwest's culture and strategy under Chief Executive Officer Gary Kelly.


Several high-level executives have left Southwest Airlines in recent months as the carrier struggles to remain profitable amid punishing fuel costs and rapid growth.

The executives' exodus comes amid what some analysts call a slow shift in Southwest's culture and strategy under Chief Executive Officer Gary Kelly, who took the top job in mid-2004.

The new Southwest is more aggressive, takes greater competitive risks and is no longer quite the folksy underdog that built a reputation for charming partners and rivals alike.

"There is a slow cultural change going on over there," said airline consultant Stuart Klaskin of KKC Aviation Consulting in Coral Gables, Fla.

"There may be a realization that the company is entering a new era," he said, which may be spurring some executives to consider leaving "while they're at the top of their game."

The departures include:

Jim Wimberly, executive vice president of aircraft operations, who retired at the end of 2005 at age 53 after 20 years at Dallas-based Southwest. He remains under contract as a consultant.

Dave Ridley, senior vice president for people and leadership development, who left the airline last week at age 53 after 18 years to focus on missionary work. Ridley also has the option of continuing to work as a consultant.

Beverly Carmichael, vice president of labor and employee relations, began a new job this month at Rockwell Collins in Cedar Rapids, Iowa, after 10 years with Southwest. Carmichael was the airline's lead labor negotiator.

All three were considered top officers, and all were among the 13 members of Southwest's executive planning committee, according to the company's most recent annual report. Wimberly was one of only two executive vice presidents listed in the report, and Ridley was one of eight senior vice presidents.

Carmichael was also listed among the airline's 29 top officers in the annual report.

The three leave as the airline defends its position as the nation's most successful carrier and may have to re-evaluate some longtime business practices, said consultant Mike Boyd of the Boyd Group of Evergreen, Colo.

"If they don't, they won't survive," he said.

Kelly said the timing of the departures was coincidental.

"Almost every year, we have an officer leave," he said. "There's nothing extraordinary about it."

But he acknowledged that 2006 will be a challenging time.

Southwest is struggling to grow profit by 15 percent even as it becomes more vulnerable to the high fuel costs that have devastated the rest of the industry.

"We're a bigger company with more competition and more intense challenges," he said.

"That demands better teamwork and more communications between our executives."

Kelly also said he has revamped the management structure since he took over, striving for more efficiency.

"It's very different today in terms of the structure and the assignments," he said. "Things need to change, and circumstances change."

And Kelly is taking on more responsibilities as Herb Kelleher, the airline's co-founder and chairman, focuses on high-profile initiatives like lobbying for the repeal of the Wright Amendment.

"Herb is uninvolved in the day-to-day operations," Kelly said.

This year, Kelly will represent Southwest on the board of the Air Transport Association, an industry trade group, a seat that Kelleher previously held.

Kelleher remains "significantly involved" in high-level strategic decisions as well, such as new cities and routes, Kelly said.

Kelly, who came from the airline's finance department, has taken Southwest into uncertain territory with expansions into major cities like Denver, Philadelphia and Pittsburgh.

He also changed the airline's long-standing neutrality on the Wright Amendment.

One Southwest executive who asked not to be named for this story said life under Kelly is more numbers-oriented and less freewheeling.

"The culture here has changed significantly," the executive said. "It's not the same company it was a year ago, and that's why you see a lot of these people leaving."

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