Identifier
Created
Classification
Origin
07TAIPEI2361
2007-10-18 09:07:00
CONFIDENTIAL//NOFORN
American Institute Taiwan, Taipei
Cable title:
WILL NEW CHINA AIRLINES CHAIRMAN CHANGE THE
how-toVZCZCXRO2765 RR RUEHCN RUEHGH RUEHVC DE RUEHIN #2361 2910907 ZNY CCCCC ZZH R 180907Z OCT 07 FM AIT TAIPEI TO RUEHC/SECSTATE WASHDC 7188 INFO RUEHOO/CHINA POSTS COLLECTIVE RUEHUL/AMEMBASSY SEOUL 8968 RUEHKO/AMEMBASSY TOKYO 9163 RHEFDIA/DIA WASHINGTON DC RUEATRS/DEPT OF TREASURY WASHDC RHHJJAA/JICPAC HONOLULU HI RUCPDOC/DEPT OF COMMERCE WASHDC RUEKJCS/SECDEF WASHINGTON DC RUEAIIA/CIA WASHDC
C O N F I D E N T I A L TAIPEI 002361
SIPDIS
SENSITIVE
SIPDIS
STATE PASS USTR, STATE FOR EAP/TC,USTR FOR STRATFORD AND
KATZ, TREASURY FOR OASIA/TTYANG, COMMERCE FOR
4431/ITA/MAC/AP/OPB/TAIWAN
E.O. 12958: DECL: 10/17/2017
TAGS: ECON EAIR ETRD PINR PREL TW JA
SUBJECT: WILL NEW CHINA AIRLINES CHAIRMAN CHANGE THE
COMPANY?
REF: TAIPEI 02138
Classified By: AIT Economic Section Chief Hanscom Smith, Reasons 1.4 (b
/d)
C O N F I D E N T I A L TAIPEI 002361
SIPDIS
SENSITIVE
SIPDIS
STATE PASS USTR, STATE FOR EAP/TC,USTR FOR STRATFORD AND
KATZ, TREASURY FOR OASIA/TTYANG, COMMERCE FOR
4431/ITA/MAC/AP/OPB/TAIWAN
E.O. 12958: DECL: 10/17/2017
TAGS: ECON EAIR ETRD PINR PREL TW JA
SUBJECT: WILL NEW CHINA AIRLINES CHAIRMAN CHANGE THE
COMPANY?
REF: TAIPEI 02138
Classified By: AIT Economic Section Chief Hanscom Smith, Reasons 1.4 (b
/d)
1. (SBU) Summary. China Airlines (CAL) President Ringo Chao
was appointed Chairman of the Board on October 2, possibly
because of the August 20 CAL airplane fire (reftel). Chao
replaced CAL's Executive Vice President in charge of
maintenance (a protg of Chao's predecessor) but has not
made other senior management changes. AIT contacts are
unsure whether or not Chao has the experience to implement
significant changes in CAL's rigid corporate management
structure. End Summary.
OUT WITH THE OLD, IN WITH THE NEW
2. (C) On October 2, the Board of Directors of China Airlines
(CAL) voted unanimously to replace Chairman Philip Wei
(Hsing-Hsiung) with CAL President Ringo Chao (Kuo-Shui).
Chao was appointed President of CAL in 2005, and at 51 is the
youngest Chairman in CAL history.
WHAT ACTUAL IMPACT ON CAL OPERATIONS?
3. (C) AIT contacts tell us that it is uncertain whether, as
chairman, Chao will be able to make significant changes to
the way CAL operates. On October 16, Dr. Chen Lee-in of the
Chung-Hua Institution for Economic Research (CIER) told
econoff the CAL Chairman's position requires political, not
necessarily managerial, skill. She asserted that CAL remains
profitable only because of its significant air cargo business
and a ticket price structure that charges Taiwan passengers
more than international passengers. In her view, CAL
management practices are not likely to change under Ringo
Chao.
AN UNUSUAL PATH TO THE CHAIRMANSHIP
4. (C) Chao's rapid rise in the airline industry is generally
considered by AIT's industry sources to be due to his
friendship with former EVA Airways Chairman Chen Shen-chi
(son-in-law of Evergreen Group Chairman Chang Jung-fa),who
promoted Chao to be EVA regional representative in San
Francisco and Bangkok in the 1990s. After Chen fell into
disfavor with his father-in-law and left EVA in 1999, Chao
left the airline industry, only to return in June 2005 as
president of Mandarin Airlines, a CAL subsidiary. Three
months later he was appointed president of CAL.
COMMENT
5. (C) Now that Chao is Chairman and President of CAL, the
extent of his control over management decision-making is the
subject of intense speculation among industry observers. The
prevailing view among AIT contacts is that Chao's ability to
manage a major airline is unproven. End Comment.
BIOGRAPHIC INFORMATION
6. (U) Ringo Chao (Kuo-Shui) was born in 1956. He received a
Bachelor's Degree in English from the Chinese Cultural
University. He is pursuing an Executive MBA at Taiwan's
National Chengchi University. Chao is married, although his
wife and children reside in the U.S.
WANG
SIPDIS
SENSITIVE
SIPDIS
STATE PASS USTR, STATE FOR EAP/TC,USTR FOR STRATFORD AND
KATZ, TREASURY FOR OASIA/TTYANG, COMMERCE FOR
4431/ITA/MAC/AP/OPB/TAIWAN
E.O. 12958: DECL: 10/17/2017
TAGS: ECON EAIR ETRD PINR PREL TW JA
SUBJECT: WILL NEW CHINA AIRLINES CHAIRMAN CHANGE THE
COMPANY?
REF: TAIPEI 02138
Classified By: AIT Economic Section Chief Hanscom Smith, Reasons 1.4 (b
/d)
1. (SBU) Summary. China Airlines (CAL) President Ringo Chao
was appointed Chairman of the Board on October 2, possibly
because of the August 20 CAL airplane fire (reftel). Chao
replaced CAL's Executive Vice President in charge of
maintenance (a protg of Chao's predecessor) but has not
made other senior management changes. AIT contacts are
unsure whether or not Chao has the experience to implement
significant changes in CAL's rigid corporate management
structure. End Summary.
OUT WITH THE OLD, IN WITH THE NEW
2. (C) On October 2, the Board of Directors of China Airlines
(CAL) voted unanimously to replace Chairman Philip Wei
(Hsing-Hsiung) with CAL President Ringo Chao (Kuo-Shui).
Chao was appointed President of CAL in 2005, and at 51 is the
youngest Chairman in CAL history.
WHAT ACTUAL IMPACT ON CAL OPERATIONS?
3. (C) AIT contacts tell us that it is uncertain whether, as
chairman, Chao will be able to make significant changes to
the way CAL operates. On October 16, Dr. Chen Lee-in of the
Chung-Hua Institution for Economic Research (CIER) told
econoff the CAL Chairman's position requires political, not
necessarily managerial, skill. She asserted that CAL remains
profitable only because of its significant air cargo business
and a ticket price structure that charges Taiwan passengers
more than international passengers. In her view, CAL
management practices are not likely to change under Ringo
Chao.
AN UNUSUAL PATH TO THE CHAIRMANSHIP
4. (C) Chao's rapid rise in the airline industry is generally
considered by AIT's industry sources to be due to his
friendship with former EVA Airways Chairman Chen Shen-chi
(son-in-law of Evergreen Group Chairman Chang Jung-fa),who
promoted Chao to be EVA regional representative in San
Francisco and Bangkok in the 1990s. After Chen fell into
disfavor with his father-in-law and left EVA in 1999, Chao
left the airline industry, only to return in June 2005 as
president of Mandarin Airlines, a CAL subsidiary. Three
months later he was appointed president of CAL.
COMMENT
5. (C) Now that Chao is Chairman and President of CAL, the
extent of his control over management decision-making is the
subject of intense speculation among industry observers. The
prevailing view among AIT contacts is that Chao's ability to
manage a major airline is unproven. End Comment.
BIOGRAPHIC INFORMATION
6. (U) Ringo Chao (Kuo-Shui) was born in 1956. He received a
Bachelor's Degree in English from the Chinese Cultural
University. He is pursuing an Executive MBA at Taiwan's
National Chengchi University. Chao is married, although his
wife and children reside in the U.S.
WANG