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Commentary: Bob Crandall: An American Gladiator


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COMMENTARY: BOB CRANDALL: AN AMERICAN GLADIATOR

The airline industry, long the playground for oversize egos and larger-than-life characters, is losing one of its most colorful personalities. Robert L. Crandall, chief executive of AMR Corp. and American Airlines Inc. since 1985, is retiring in May at age 62. He's even relinquishing his board seat. Crandall's immediate plan: to cross the Atlantic on his new 48-foot sailboat.

To his credit, Crandall is sailing off at a good time for him and American. After years of downsizing, the company is now enjoying record profits and a record stock price. It's back at the top in on-time performance. And it's poised to cement powerful alliances with airlines in Europe, Latin America, and Asia.

But for all his strengths--and Crandall has many--he may not be the man to lead in a world where sharing power with partners and with labor will be more critical. "Bob ran the company in a way where he knew best. As a result, American lost out on a whole bunch of opportunities," says one former American executive."HE'LL EAT YOU ALIVE." But love him or hate him--and the profane, hard-charging Crandall always engenders strong feelings--he has left an indelible stamp on American and the industry. His innovations are legendary: frequent-flier programs, sophisticated computer reservation and pricing systems, and huge hub-and-spoke networks. After deregulation came to the airline industry in 1978, he cut costs with a then-novel, two-tier pay scale that put new hires on a lower salary track.

From 1983 to 1988, he plowed some $7 billion back into the company for new planes and built American from an also-ran to an industry powerhouse. "If there's anybody who has shaped this industry and made American what it is today, it's Bob Crandall," says Continental Airlines Inc. CEO Gordon M. Bethune. As former American Chairman Albert V. Casey, who tapped Crandall in 1980 to serve as the airline's president, sums him up: "You never want him on the other side. He'll eat you alive."

Crandall prevailed by force of will and obsessive attention to detail. One former executive recalls a flight with Crandall years ago from Dallas to New York. Crandall was given a salt shaker with a Continental logo. He dumped the salt on his tray, angrily pocketed the shaker, and later sent it to the head of the catering business with a pointed note. Southwest Airlines Co. CEO Herbert D. Kelleher recalls the time he, Crandall, and another airline exec were to participate in a singing contest at an industry conference. Crandall not only rewrote the song after being told not to but reassigned Kelleher from bass to tenor.

On the other hand, Crandall's tendency to approach every situation as a contest with winners and losers has sometimes cost the company dearly. American has suffered two painful strikes in five years, in good measure because of Crandall's miserable relations with his labor unions. He also alienated other airline executives. He had a smart plan to simplify the industry's unwieldy fare system in 1992, but it provoked a bloodbath of price-cutting: Mistrustful rivals felt "if Bob's for it, there must be something wrong," recalls one former exec.

Some fear that under Crandall's affable successor--President Donald J. Carty, 51--the airline could lose some edge. But Carty's more diplomatic style-he often plays mediator between Crandall and his subordinates--may help the airline on some crucial fronts. In September, American begins labor talks with flight attendants, who struck in 1993 for five days. And in Washington, its proposed alliance with British Airways PLC--a linchpin in its competition with other airline partnerships--faces intense regulatory scrutiny. Now that he's emerging from Crandall's shadow, Carty has a chance to show he's the right man at the right time. Just as Crandall was.By Wendy Zellner


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