The Battle for Eastern Airlines

[Aeronca123]

Yip should watch this.....

 

[GogglesPisano]

Yip should watch this.....

Isn't Lorenzo one of the vaulted "job creators?" we keep hearing about? How is this any different from what Bain did?

 

[Yuppyguppy]

I'm so glad we merged with Continental. I'm really embracing the "working together" culture just awesome.

 

[Sacha]

You are comparing Frank Lorenzo and Texas Air Corp to Mitt Romney and Bain Capital? Really?

As a rEAL Eastern Pilot and current SWA Pilot, I find that laughable to say the least. Next you will be drawing comparisons between Herb Kelleher and Frank Lorenzo. Idiot.

 

[GogglesPisano]

You are comparing Frank Lorenzo and Texas Air Corp to Mitt Romney and Bain Capital? Really?

As a rEAL Eastern Pilot and current SWA Pilot, I find that laughable to say the least. Next you will be drawing comparisons between Herb Kelleher and Frank Lorenzo. Idiot.

How are Texas Air and Bain fundamentally different?

They both bought distressed companies through leverage, then compensated for the excessive debt by slashing labor costs.

I'll take the high road and refrain from name-calling.

Here ... http://www.huffingtonpost.com/2012/08/16/bain-capital-unions_n_1792381.html

 

[enuffalready]

How are Texas Air and Bain fundamentally different?

They both bought distressed companies through leverage, then compensated for the excessive debt by slashing labor costs.

I'll take the high road and refrain from name-calling.

Here ... http://www.huffingtonpost.com/2012/08/16/bain-capital-unions_n_1792381.html

By actually saying you are taking the high road, negates the point of taking the high road.

 

[GogglesPisano]

By actually saying you are taking the high road, negates the point of taking the high road.

Just doing my part to lend at least a semblance of maturity and class to this place.

 

[Sacha]

Texas Air is dead and gone as is Frank Lorenzo. He is banned from the Airline Industry for life.

Bain Capital is still alive and well while continuing to provide equity to companies who need it to survive or grow. One of the top Executives at Bain is a key Bundler for your God Obama. Only someone from the "Liberal Elite" could possibly be so ignorant of the history of Investment Banking and Bain Capital vs Texas Air Corp.

Just doing my part to lend some facts to those who don't know a damn thing about Eastern/Lorenzo or Bain/Romney.

 

[Dan Roman]

Sacha, I'd rather hear your take on the EAL demise. It looks to me like they had started towards a pretty good labor management scenario and than blew it. Plenty of blame looks like it could be laid at management and labor's feet.

 

[Sacha]

It really wasn't that complicated. Initially Lorenzo actually wanted TWA much more than EAL. So did Icahn. The TWA unions and Mgt. figured they would have a better time playing ball with Icahn so they threw in with him. Lorenzo went after Eastern as Plan B. either way his plan was to strip them or us (EAL) clean, move the valuable parts to Continental. CO was struggling, but Non-Union.

Borman was butting heads with the Unions although mostly with Charlie Bryant and the IAM. Lorenzo made Borman an offer he couldn't refuse. He got his revenge in a way.
The truth is Borman was not a very effective Leader. He made some big errors but the airline was still profitable. The key is as employees, we lost our trust in him. Was it a Union thing? I don't believe so. SWA is the most heavily unionized airline in the country. Losing trust in management and vice versa crosses a line that doesn't care if you are union or non-union

In the end, all the employees knew that we had to stick together as a group rather than each Union trying to fight Lorenzo one at a time. He was steadily bleeding and dismantling us piece by piece no matter what we did. The IAM 's contract just happened to come up first so we all honored their picket line. If the Pilots contract had expired first, I am sure we would have been painted as the bad guys like Charlie Bryant and the IAM were. The end results would have been the same.

I believe it was a no-win situation. Would we be still around if Lorenzo had gotten a hold of TWA like he originally wanted? I would like to say yes, but I am a realist. I passed through two more Legacy carriers before coming to Southwest. Eastern had some entrenched Legacy thinking and behavior prior to Lorenzo. I believe we would have ridden the roller coaster throughout the late eighties and into the 90's and 9/11 like everyone else. I am not so naive to believe we were any smarter or better than the employees of Pan Am,TWA, Usair, United, Delta, or Continental, Northwest, American, all of which who have gone into Bankruptcy
at least once or have disappeared.

The 80's and Corporate Raiders like Lorenzo and Icahn was like being caught in a game of Whack-a-mole. Continental, EAL and TWA got whacked. Hopefully those days are gone but different issues are in their place. Will SWA suffer the same fate. Statistics and Mathmatics say they will. I give the odds of SWA facing similar circumstances at better than 50/50 before I retire. Not a pessimist. Just a realist.

I actually followed Bain stories in the 80's partly because I lived in Boston. Even in the heyday of Corporate Raiders and hostile takeovers, I never put Bain and the likes of guys like Icahn and Lorenzo in the same category. Not even in the same Universe. Years later I married an Investment Banker. My wife said that Bain and Romney are held in high regard throughout the Banking industry. That says a lot for an industry that can be very high pressure and have the egos to with it. I have asked a lot of the higher ups at my wife's company what they think of Romney and the universal answer is "a smart, kind and decent man". Many of these Bankers are Democrats and voted for Obama.