This is a partial transcript from Your World with Neil Cavuto, December 4, 2002, that was edited for clarity. Click here for complete access to all of Neil Cavuto's CEO interviews.
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NEIL CAVUTO, HOST: My next guest is no stranger to bankruptcy. He's the guy who made Continental profitable again after it filed for Chapter 11 not once but twice in 10 years. He's Gordon Bethune. He's the chairman and CEO of Continental Airlines.
Gordon, good to see you.
GORDON BETHUNE, CHMN. & CEO, CONTINENTAL AIRLINES (CAL): Nice to see you, Neil.
CAVUTO: So why are you making things so tough on United?
BETHUNE: I don't think we are. I think they are making things tough on themselves. And like anyone else, I don't think they want to take the medicine they probably need to take. It's like taking morphine instead of going to the dentist. Just go to the dentist and get yourself fixed up. And that's what they need to do.
CAVUTO: But they are doing that. They argue, look, we're getting better than $5 billion worth of various concessions and cost cutting in there, we deserve something for that.
BETHUNE: I think that's good story. And I guess if there was a great story, a commercial banker would listen to it. They've got billions of dollars of assets. They should be able to get a loan. Continental just got a $200 million loan. And that's because we have a credit plan that works here. Now if you don't have one, you can't get one. And that's their problem, they don't have a plan.
CAVUTO: If this were you, and you'd been in this position, inherited a position, a carrier in bankruptcy twice, would you feel the same way?
BETHUNE: What I would do, obviously, is take in a reorganization. I think USAir has done that and they've done it rather well, a good, well-constructed plan. And that's probably what United needs to do. I am loath to tell United what to do. What I don't think we need is the government subsidizing a competitor that will use that money to the detriment of it all. So it's a life or death thing for Continental. We need to survive and we don't need someone subsidized coming down our throat.
CAVUTO: The Europeans say the government is subsidizing all you guys, that the billions of dollars worth of guarantees and emergency funding you got after 9/11 proves that you guys have the government in your hip pocket.
BETHUNE: Hey, listen, Europeans invented the word "subsidy" of airlines. So don't listen to that B.S.
(LAUGHTER)
CAVUTO: I think it was started with the French, Gordon. I think it was the French who started it.
BETHUNE: Yes. That's the pot and the kettle having a discussion, I think.
CAVUTO: OK. I'm obliged to ask it. But back to United, now, the feeling seems to be that a lot of U.S. carriers want United to go belly up because a lot of you guys, no slap intended here, are like vultures surrounding their routes and you want in, is that it?
BETHUNE: Neil, they should lose their routes. Going into bankruptcy isn't liquidation, it's just fixing your balance sheet, fixing your cost structure to come out on the other end a lean machine that can work in the marketplace. I don't think there's anyone advocating the destruction of United Airlines. All we're saying is go to the bankruptcy courts, fix yourself and come out as a good air carrier. And that will be fine with us. We can compete on that basis.
CAVUTO: What's difference between them going into bankruptcy and just getting emergency money from Uncle Sam?
BETHUNE: Well, one of them took a couple of billion dollars a debt on already a company that doesn't work. They can't make money under existing capital and cost structure. So what we're doing here is not fixing the company, we're subsidizing a company that doesn't work to the detriment of us all. The company needs to restructure itself to work and a loan won't do that.
CAVUTO: What do you tell all those workers there who have taken these concessions in the hope that it could stave off a carrier from going under?
BETHUNE: Well, they have great employees. And what they need to do is do the things, whatever the pay or whatever the cost structure that you need to be viable, that's what you need to do to have a long-term job. A Band-Aid for 18 months won't guarantee you a job. So because you value your employees you need to do the right thing here. And if that is bankruptcy, then do that or change yourself enough so that you become profitable on your own.
CAVUTO: Let me switch gears a little bit and talk about this issue of air safety in light of this Israeli plane that almost got shot down by missiles. There's been a move afoot in this country, maybe to arm planes with this sort of missile defense technology. I guess it could cost millions for a plane to do. How do you feel about that?
BETHUNE: Well, I mean, the military maybe ought to have them before we do. Military airplanes don't have that either. We're getting way ahead of ourselves. And the next thing we will all be wearing helmets because the meteorites might hit us. Neil, there's got to be some.
CAVUTO: That's a pretty well threat these days in light of terrorism, isn't it? You don't think it's at least potentially serious?
BETHUNE: I can't assess that. I haven't ever seen that happen. But I know that we're the victim here, so we can't be the ones to say what the government needs to do for the national security. That's a government issue.
CAVUTO: But Gordon, what if the government picked up tab for it? Said, all right, Gordon, you got to retrofit all your planes now with this sort of missile defense shield, and it is going to cost 2 or 3 million a pop to do it, but we'll pick up the tab?
BETHUNE: We follow a lot of government mandates, especially for safety. And when they are paid for, obviously we'll do them. We do have an ongoing reconstruction of the cockpit doors that was advocated as, do it, and we'll pay for it. I noticed that they haven't paid for it and we are still doing it. So I'm a little worried about the insurance, that they will pay for it. Obviously we are going to do the things the government requires us to do for safety. I am not sure this has a cost benefit.
CAVUTO: Gordon Bethune, always good seeing you. Thank you very much.
BETHUNE: Thanks, Neil.
CAVUTO: The man that runs Continental Airlines out of Houston, Texas, Gordon Bethune.
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