Guest Jiminy Posted November 11, 2004 Share Posted November 11, 2004 WestJet CEO Says Offered to Quit Over Spy Scandal Wed November 10, 2004 7:42 PM GMT-05:00 By Robert Melnbardis MONTREAL (Reuters) - Clive Beddoe, the president and chief executive of WestJet Airlines Ltd., on Wednesday offered to resign over corporate espionage allegations made by Air Canada. "I've offered my resignation already on the basis that the man who was responsible for it reported to me and therefore I take responsibility," Beddoe said to reporters after a business luncheon in Montreal. "My board has said they weren't interested in that," he added. The man Beddoe was referring to is Mark Hill, a co-founder and vice-president of Calgary based WestJet, who resigned in July over the scandal. A C$220 million dollar lawsuit by Air Canada, recently emerged from 18 months of bankruptcy protection and now owned by ACE Aviation Holdings Inc., alleges WestJet gained access to an Air Canada employee Web site nearly a quarter of a million times to gain proprietary operating data. Air Canada, the dominant domestic airline and world No. 13, alleges that senior executives at WestJet used that information to adjust commercial strategies such as flight schedules to better compete against the Montreal carrier. Air Canada recently added Beddoe as a defendant in the lawsuit, a move the WestJet chief said he found to be a "pretty low blow" and an attempt to personalize the dispute. Beddoe argued that the information WestJet is alleged to have accumulated was readily available in many other places, but he acknowledged that the lawsuit raised issues of corporate morality at his airline. Beddoe said the allegations, which have not yet been proved in court, were part of a long rivalry between the two airlines, but had not hurt bookings at WestJet. In a statement released after Beddoe's comments, Air Canada said its lawsuit was "about WestJet committing corporate espionage on a massive scale." "Recent documents received from WestJet reveal that Mr. Beddoe and other executives had full knowledge of the improper access and use of Air Canada's proprietary information," Air Canada said. Last month, discount airline Jetsgo launched a C$50 million lawsuit against WestJet, alleging that the Calgary carrier's top executives stole private data on its passenger traffic, flight times and fares to gain a competitive advantage. Beddoe is also named in the Jetsgo lawsuit, which alleges WestJet used proprietary information to impede the closely held Montreal carrier's access to capital markets. Beddoe would not discuss details of the Air Canada lawsuit, but during his business presentation to the luncheon, he drew a laugh when he quipped about not being able to get access to Air Canada cost data. Speaking to reporters afterward, Beddoe said WestJet was reviewing whether to impose a fuel surcharge on its fares to counter rising energy costs and could announce a decision this week or next. "I think that what you're looking at is something in the magnitude of C$5, C$7, or C$10, depending on length of flight, or C$5, C$10, C$15, in that magnitude," Beddoe said. WestJet shares fell 9 Canadian cents to C$10.81 on the Toronto Stock Exchange on Wednesday. The shares have slipped some 30 percent over the past six months as fuel and costs stemming from its rapid fleet and flight expansion crimped profit margins. ($1=$1.20 Canadian) Link to comment Share on other sites More sharing options...
YYC I/C Posted November 11, 2004 Share Posted November 11, 2004 If true, it looks like WJA has a very weak BOD's. They should have taken him up on it because, as he stated, he was aware of it and Mark Hill did report to him. Lots of corporate non-sense has taken place over the last few years with some of North America's publicly traded companies, and the one common denominator in all of them (including the pre-CCAA Air Canada) is a weak board. Link to comment Share on other sites More sharing options...
CanadaEH Posted November 11, 2004 Share Posted November 11, 2004 That "weak board" got us to where we are today. That "weak board" has created an airline that has made money for 30-odd (?) straight quarters. That "weak board" hasn't asked me for a pay cut and I haven't seen any of my co-workers get laid off. That "weak board" has created an airline with a culture that is second to none. Can you say the same about yours? Link to comment Share on other sites More sharing options...
moeman Posted November 11, 2004 Share Posted November 11, 2004 That "weak board" got us to where we are today Perhaps your most telling point. Look at where you are today. You're on the wrong end of a couple of massive lawsuits that could cause irreparable harm to everything you and your fellow employees have created. Beddoe got you there. Can he, or should I say can the BOD, get you out? Link to comment Share on other sites More sharing options...
.70 mach Posted November 11, 2004 Share Posted November 11, 2004 I'll have to second Moeman and say "that weak board" got you where you are today! Lets just hope that same board can get you out of this mess that your management created. Link to comment Share on other sites More sharing options...
Seeker Posted November 11, 2004 Share Posted November 11, 2004 That "weak board" got us to where we are today. That "weak board" has created an airline that has made money for 30-odd (?) straight quarters. That "weak board" hasn't asked me for a pay cut and I haven't seen any of my co-workers get laid off. That "weak board" has created an airline with a culture that is second to none. Can you say the same about yours? I'm just going to keep this posting of yours so I can pull it out in a year or two and see if you still feel the same way. The only person who would post something like this is someone who has never been smacked upside the head by reality. Westjet has had a good run but has also shown that they're capable of making mistakes. Your lack of humility will come back to bite you. Link to comment Share on other sites More sharing options...
Guest Jiminy Posted November 11, 2004 Share Posted November 11, 2004 WestJet CEO offered to quit over spy fiasco Says board rejected resignation, claims Air Canada is trying to give airline 'black eye' By BERTRAND MAROTTE Thursday, November 11, 2004 - Page B4 MONTREAL -- WestJet Airlines Ltd. chief Clive Beddoe said yesterday that he offered months ago to quit over an espionage scandal, but the board of directors rejected his resignation, and he accused rival Air Canada of trying to give his discount airline a "black eye" rather than settle the dispute. Mr. Beddoe said yesterday that Air Canada wants to use a $220-million corporate spying lawsuit against WestJet to continue beating up on its competitor. But he would not say whether Calgary-based WestJet has approached Air Canada regarding a settlement. "They don't want a settlement. They want to keep giving us a black eye every opportunity they can," Mr. Beddoe told reporters after giving a speech at a Canadian Club luncheon. He also accused Air Canada of striking a "low blow" by adding his name last week to a list of defendants in the suit. Mr. Beddoe said he had offered to resign, and a WestJet spokeswoman said later he had done that last April. Montreal-based Air Canada alleges in the suit that WestJet hacked into a confidential website to steal sensitive scheduling, traffic and fare information. Mark Hill, a WestJet co-founder originally named in the suit, resigned four months ago over the scandal. Air Canada alleges WestJet used the proprietary data to unfairly gain a competitive advantage. WestJet denies any wrongdoing and has countered that Air Canada, which emerged from bankruptcy protection on Sept. 30, should shoulder the blame for "mismanagement of its business." In statements of defence filed last summer, WestJet and Mr. Hill said they gathered data about Air Canada flights by counting passengers at airports and using other legitimate techniques, but not through electronic spying. None of the allegations have been proved in court. To reporters yesterday, Mr. Beddoe said it was a "low blow to try to personalize this" by naming him in the suit. Air Canada chief Robert Milton "has lowered the bar, I suppose," he said. Four other WestJet executives' names were also added to the list last week. About Mr. Hill's resignation, Mr. Beddoe told reporters: "There is a morality involved. There's no question. And we think accessing someone else's website isn't appropriate. I've said that before and I still say it. It's inappropriate. But it's not the information, it's how he got the information." He added that -- given the ethical issues involved -- he offered his resignation over the matter to the board but that it was turned down. The Air Canada suit "hasn't hurt our bookings, which is the main thing," he said. WestJet passengers tell staff they view the issue as "just another battle between airlines. It's Pepsi and Coke. It's been going on for years." Montreal discount airline Jetsgo Corp. is also suing WestJet for alleged spying. None of the allegations have been proved in court. Air Canada said in a written response to Mr. Beddoe's comments yesterday: "This lawsuit is about WestJet committing corporate espionage on a massive scale. Former WestJet executive, Mark Hill, previously admitted that he surreptitiously accessed Air Canada's confidential employee website almost a quarter of a million times over a 12-month period. Recent documents received from WestJet reveal that Mr. Beddoe and other executives had full knowledge of the improper access and use of Air Canada's proprietary information. Air Canada's lawsuit meets our obligation to stakeholders to protect the company's competitive position." Mr. Beddoe also said yesterday that WestJet may soon announce a fuel surcharge of between $5 and $15 a ticket, depending on the flight's length. He said an announcement could come later this week or early next week. "We would probably have to impose one. We're looking at the idea." Margins of 13 and 14 per cent might be difficult to maintain in the short run because of higher fuel costs, but the airline expects to continue producing those kinds of numbers in the mid to long term, he said. Link to comment Share on other sites More sharing options...
Seeker Posted November 11, 2004 Share Posted November 11, 2004 Beddoe keeps pulling out this, "I offered to resign but the BoD said no" line as if it's a ringing endorsement. He implies that the board, who has all the details, agrees with his read of the situation. The thing is that he offered to resign right at the beginning of this scandal. I wonder how much the board really did know and if he offered to resign now would they take him up on it. For example, I wonder if they knew that there were emails showing his acceptance of Hill's activities. If they knew that Beddoe was involved and still didn't accept his offer to resign an argument could be made that they have not acted in the best interest of the shareholder. Link to comment Share on other sites More sharing options...
Guest Jiminy Posted November 11, 2004 Share Posted November 11, 2004 My thinking exactly seeker. I wonder if he'd be willing to put the offer to resign back on the table now..... Link to comment Share on other sites More sharing options...
Spinnaker Posted November 11, 2004 Share Posted November 11, 2004 I don't think they would take it. Yes, the BOD and Execs have driven WestJet to the middle of this $ hit storm but I still think the BOD views Clive as a key person in which the employees respect; these people are the only present force that can actually turf Clive Beddoe and they haven't shown a sign of turning on him. Link to comment Share on other sites More sharing options...
dozerboy Posted November 11, 2004 Share Posted November 11, 2004 Canada eh...why can't people comment on the leader of WJ without you taking it so to heart. Not too many people would argue that WJ employees are some of the best, hard working ones out there. That is not the issue. The issue is what Clive Beddoe has done or not done if you please, and the harm he has put everyone at WJ into including yourself. If I was there I would be some "Naughty Word" that his arrogance and corporate espionage might end my good run of employment and its benefits. Link to comment Share on other sites More sharing options...
Guest Zebigboss Posted November 11, 2004 Share Posted November 11, 2004 Clive should not offer his resignation... He should simply resign regardless of whether the BOD wants to keep him around or not... That would be the sign of a great leader. In the end, it will be the only way for him to save face... The longer he waits, the worse it will be for him and westjet! Link to comment Share on other sites More sharing options...
Steam Driven Posted November 11, 2004 Share Posted November 11, 2004 " That would be the sign of a great leader. In the end, it will be the only way for him to save face... The longer he waits, the worse it will be for him and westjet!" Or, he could stay with the board and the employees blessing, and use the same determination that created the Airline and get us out of this mess. Use the Leadership and Vision that has grown this Airline and created our jobs to turn the corner for the next 31 consecutive quarter's of profit... We harbour no ill will towards our CEO. We talk to him. We listen to what he has to say, as he listens to what concerns us. He was at the Profit Sharing BBQ and stayed to shake hands and speak with anyone who approached him and had questions or concerns. I believe he has my, and every other shareholder's, best interests at heart. That is the sign of a great leader. He's not in the business to save or gain any face. Any fool can quit, duck and run... Link to comment Share on other sites More sharing options...
FA@AC Posted November 11, 2004 Share Posted November 11, 2004 Any fool can quit, duck and run... ....or pilot his company into a huge legal mess. Link to comment Share on other sites More sharing options...
sambucca Posted November 11, 2004 Share Posted November 11, 2004 FA@AC Or pilot it into bankruptcy. Were you one of the AC employees screaming for his resignation in tougher times? Milton stuck it out and in my opinion all AC employee's are better off for it. Link to comment Share on other sites More sharing options...
Guest Zebigboss Posted November 11, 2004 Share Posted November 11, 2004 In the end, steam driven, it matters not whether your employees and the board are loyal to Clive... The market will unemotionally take care of him and the cheaters named in the lawsuits against westjet. Your stoc has taken a beating and with Beddoe at the helm will probably take further beatings in upcoming months as the court case unfolds. Only fools and politicians never admit wrong doing or take responsibility for ones mistake(s). It's not only about saving face... Its about minimizing the potential damages westjet can potentially be subject to if he stays. But, hey what do I care?... The longer he stays the better it is for us... Its just so sad that in the end the people who will suffer the most is the employees (their families) and shareholders. I understand you guys respect him but in the classic words of The Donald "He should be fired"... Sometimes great leaders have to be sacrificed for the need(s) of the many! Link to comment Share on other sites More sharing options...
Guest rattler Posted November 11, 2004 Share Posted November 11, 2004 MONTREAL -- WestJet Airlines Ltd. chief Clive Beddoe said yesterday that he offered months ago to quit over an espionage scandal, but the board of directors rejected his resignation, and he accused rival Air Canada of trying to give his discount airline a "black eye" rather than settle the dispute This from the same guy who tried to tarnish the Rep. of Jetsgo with his very public remarks...... Talk about a double standard....... Link to comment Share on other sites More sharing options...
Flightlevels Posted November 11, 2004 Share Posted November 11, 2004 It takes a slippery guy like clive to fight a dirty bunch of crooks at ac...lol. Yawn. Link to comment Share on other sites More sharing options...
wjafa Posted November 11, 2004 Share Posted November 11, 2004 You're on the wrong end of a couple of massive lawsuits that could cause irreparable harm to everything you and your fellow employees have created. Beddoe got you there. Can he, or should I say can the BOD, get you out? Amen. As a WJ'er I ask myself this a lot lately. Here's to hoping. Link to comment Share on other sites More sharing options...
Guest Zebigboss Posted November 11, 2004 Share Posted November 11, 2004 Milton did not pilot AC INTO bankrupcy but THROUGH bankrupcy protection... There is a difference. Furthermore, no other airline in the world has had to go through or has been affected as much by so many uncontrollable external crisis... Government forced merger, 9/11, SARS, High tech sector meltdown, government meddling and lack of intervention while other north american carriers widely benifitted from loan guarantees and so forth, and lets not forget the recipient of illegal corporate espionage when we actually were at our lowest! Link to comment Share on other sites More sharing options...
Guest Zebigboss Posted November 11, 2004 Share Posted November 11, 2004 ...Also forgot the war in Afghannistan and Iraq! Link to comment Share on other sites More sharing options...
sambucca Posted November 11, 2004 Share Posted November 11, 2004 ZBG So you want to talk about uncontollable situations? How about another airline joining the fray and selling seats at ultra low prices? How about oil prices skyrocketing? My point is , is that when things were tough at AC there were lots of you calling for his head even though he was handed a bag of crap. I havn't heard ONE person call for Clive's head at WestJet. That's the difference. Link to comment Share on other sites More sharing options...
moeman Posted November 11, 2004 Share Posted November 11, 2004 I havn't heard ONE person call for Clive's head at WestJet Does that not concern you? Although I have supported Mr. Milton and his team throughout our CCAA process, the fact that people were calling for his head seemed healthy to me. I didn't agree with them, but it seemed like a natural response to the stresses involved. If we had all been on our knees looking up to him as our saviour as you seem to do with Mr. Beddoe, I would have been more than a little concerned. Link to comment Share on other sites More sharing options...
Guest directlaw Posted November 11, 2004 Share Posted November 11, 2004 I don't think Clive can resign. As far as the investment community is concerned he is the "creator" if you will. Who would replace him that would instill the confidence of investors. If he resigns now the company would appear rudderless in this time of difficulty. This time of high fuel costs, low yield, two failed attempts at raising yield, concerns about the cost of YYZ, dropping stock, the lawsuit, increased lower cost competition from AC and from Jetsgo. For him to go now would torpedo the WJ stock. Someone may be being groomed to replace him but I really doubt he would be replaced right now. Link to comment Share on other sites More sharing options...
Guest Zebigboss Posted November 11, 2004 Share Posted November 11, 2004 I second that Moeman... Blindly following a leader is not at all healthy... One has to stay logical and keep the larger picture in mind! Link to comment Share on other sites More sharing options...
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