Originally created 08/16/97

New Delta CEO promises to satisfy customers



ATLANTA (AP) - Delta Air Lines' new chief executive, Leo Mullin, pledged Friday that customers and employees won't take a back seat to stockholders as he takes over the Atlanta-based carrier.

Mullin, the first outsider to head the company, was named president and CEO Friday. He succeeds Ronald W. Allen, Delta's longtime chairman and CEO, who retired July 31 after the board refused to renew his employment contract.

Delta also named Gerald Grinstein, a Delta director and former Western Airlines CEO, as non-executive chairman of the board, and Maurice Worth, a longtime Delta executive, as chief operating officer.

Mullin, who comes to Delta from Chicago-based Unicom Corp., the parent company of Commonwealth Edison, said Delta has sacrificed customer satisfaction and employees in its successful drive to return to financial health after years of losses.

"Sometimes the balance can get out of whack," said Mullin, 54.

Grinstein, who led the search for a new CEO after Allen's ouster, said Mullin's extensive experience in the service sector was a key to his selection. The board also feared that hiring an airline-industry executive, who might bring in a new management team, would create more instability within Delta, he said.

"We wanted a fresh look," said Grinstein.

He said the board wants Delta to recapture its once-top ranking in customer service.

Grinstein said he will help Mullin get his feet on the ground, then probably will step out of the way. "My role is to be a bridge, a transition," he said.

Delta has weathered years of turbulence since 1991, when its costly purchase of most of Pan Am's European operations plunged it into years of financial losses. Employees took salary cuts, and many were laid off, as part of a cost-cutting program instituted by Allen. In all, about 15,000 jobs were eliminated, including customer-service veterans.

Although Delta returned to profitability in 1995, many employees felt betrayed and morale has remained low.

Mullin said the best way to restore employee morale is to develop a winning company.

"It's a tough, tough row to hoe when you're facing those financial conditions," he said. "Perhaps the organization did go too far."

While Mullin kept specific ideas about improving customer service to himself, he said the attitude of workers will be central to how customers view the airline.

He said financial efficiency won't be sacrificed, however. "You can do both," he said.

Before joining Unicom, where he was vice chairman, Mullin headed First Chicago, the nation's 10th largest commercial bank. He also worked for Conrail.

He holds undergraduate degrees in engineering and applied physics, a graduate degree in applied math and an MBA, all from Harvard.

Of his lack of experience in the airline industry, Mullin said, "There will be a learning curve, but I do not think it will be steep."

Grinstein noted that other airlines had been hiring CEOs with experience in customer service. He said Worth, who had been acting CEO since Allen's retirement, wasn't a finalist for the position.

Analyst Jeffrey Long of J.P. Morgan Securities said there had been no clear candidate within Delta for the CEO post.

"They sort of needed a boost in the employee morale department and the customer service area," Long said. "Bringing somebody in from the outside - fresh blood - I think that's what everyone was looking for."

Mullin said he may bring in new talent in the upcoming months, but he would be relying on the experience of Worth and others already at Delta to keep the airline financially healthy.