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US Airways CEO steps down

ARLINGTON, Va. -- US Airways Group Inc.'s president and chief executive David Siegel, whose demands for cost cuts created animosity with union leaders, resigned yesterday from the nation's seventh-largest airline.

He will be replaced by Bruce Lakefield, a member of US Airways' board of directors and a close ally of US Airways chairman David Bronner, who has enjoyed better relations with labor groups.

Siegel said his resignation reflects a ''belief that my leaving is in the best interests of the company, as management seeks to secure the necessary changes to make the airline competitive.

''I have great affection for the airline and its outstanding employees, and I want to see the company succeed. Unfortunately, the past two years have been difficult for all of us, and I believe our ability to move forward and make additional changes require a change in leadership," Siegel said. ''I hope that today's announcement is the first step in a healing process that will enable the company to complete its restructuring."

Siegel led the company out of bankruptcy protection a year ago after a short eight-month stay in Chapter 11. The company cut costs by nearly $2 billion a year, including about $1 billion in concessions from labor groups.

But union groups were critical of Siegel's leadership. In December, the Air Line Pilots Association called for Siegel's resignation.

When Siegel said earlier this year that another round of cost cuts of more than $1 billion would be needed to keep the company afloat, nearly all labor groups balked at entering a new round of talks.

A spokesman for the US Airways unit of the pilots union said pilots welcomed the change.

''Basically we're pleased that Dr. Bronner listened," spokesman Jack Stephan said. ''A leadership change is a very important first step toward what we've been hammering as our mantra: the need to change the corporate culture." Stephan called Lakefield ''a man of integrity, business acumen . . . and I think he has a track record of team building."

Joe Tiberi, a spokesman for the International Association of Machinists, said the change in leadership does not affect the union's stance on negotiations. He said the union is willing to discuss cost savings that can be obtained under the existing agreement but will not renegotiate the contract. In the past, Tiberi said, Bronner has been willing to consider union suggestions that were rejected by Siegel's management team.

''Dr. Bronner is a businessman who doesn't ignore the opportunity to save a substantial amount of money," he said.

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