Delta recruits ex-Northwest leader; merger talk picks up

Aug. 22, 2007
Richard Anderson to replace retiring Gerald Grinstein

Delta Air Lines Inc. on Tuesday named former Northwest Airlines Corp. Chief Executive Richard Anderson as its new leader, a move that could revive speculation about a possible merger between the two carriers.

Anderson, a Delta board member and an executive at UnitedHealth Group Inc., will replace Gerald Grinstein, 75, as Delta's CEO. Grinstein had said he would step down once his successor was named. Anderson, 52, will become CEO effective Sept. 1, and Grinstein will retire from Delta and its board.

"This could lead to a move between Northwest and Delta," said Jon Ash, president of Washington-based consulting firm InterVistas-GA2. "I wouldn't be surprised if, toward the end of the year or early 2008, we didn't see a move on the part of those two."

Anderson joined Northwest in 1990 as deputy general counsel and was promoted through various jobs until becoming CEO in February 2002, a job he held until October 2004.

Anderson left Northwest when "the business was getting ugly and tough, and all of a sudden the health-care people come along and offer him a very good position where he could make a lot of money," Ash said. "There's no doubt he is really highly regarded" in the airline industry.

Grinstein had lobbied Delta's board to tap an insider from the company as his replacement. The top internal candidates had been Chief Financial Officer Ed Bastian and Chief Operating Officer James Whitehurst. Delta said Bastian will add the title of president to his duties. The Atlanta-based company did not say anything about Whitehurst.

In a statement, Delta said Anderson "brings a unique depth of experience to the position, having served in top jobs for several major U.S. corporations."

Grinstein said in a memo to employees that while he believed an internal candidate could run the company, he believes Anderson will be effective as CEO of Delta.

Anderson said in his own memo to Delta employees that there is a solid strategy in place at Delta, and he plans to "stay the course."

Lee Moak, chairman of the executive committee of Delta's pilots union, said pilots hope Anderson will work with employees to improve the carrier.

"Working together, we will build a successful, profitable and stand-alone Delta," Moak said. "That will be in the best interest of the Delta pilots, all Delta employees and our customers."

The change at the top at Delta follows the airline's 191/2-month reorganization under bankruptcy protection. Delta entered Chapter 11 on Sept. 14, 2005, and emerged on April 30. In bankruptcy, Delta shed billions of dollars in costs and restructured its operations. It also survived a hostile takeover bid by US Airways Group Inc.

Besides finding a new CEO, Delta's board has to decide whether to sell or spin off regional feeder carrier Comair. The airline has not provided a specific timetable for that decision.