What made Eastern GO Under?

[dmiller]

Another factor in the downfall of Eastern was our President. Bush could have intervened and forced a settlement to get the airline running again. Like other members of his family, he was in the pockets of big CEO types like Lorenzo. For all you guys that voted for Bush, yes , history IS bound to repeat itself. (i.e. Enron, Worldcom)I know many of you just love to hate Clinton, but at least he was one the most labor friendly Presidents we've had since FDR.

And I guess that's why Clinton is using Non Union Labor on his Library in Arkansas? In fact, he fought for the right to use Non Union Labor.........Get yer facts straight buddy.....Clinton was all talk, no ACTION

 

[Typhoon1244]

Isn't the real reason Eastern went under is because the pilots wouldn't go to work?

RT, I thought your characterization of black airport security guards in ATL a few weeks ago was the most tasteless, insulting thing I'd ever read on this board. But this...wow! I hope you don't make remarks like this in public. It's embarassing to the rest of us.

Maybe I misunderstood you. Did you mean that the pilots refused to give up until Lorenzo was gone? That would be a somewhat more accurate description of the situation...although that was far from being the only reason. If that's what you meant, then I apologize.

 

[Toecutter]

And I guess that's why Clinton is using Non Union Labor on his Library in Arkansas? In fact, he fought for the right to use Non Union Labor.........Get yer facts straight buddy.....Clinton was all talk, no ACTION

Well Mr. PPL,

You're probably too young to have suffered though the first Bush administration. Either that or you inherited a lot of money or live on a trust fund. Either way, the state of the economy doesn`t really affect you. No Action? You say Clinton was no action? When people had jobs and airlines made money, hired an unprecedented number of pilots, and Unions bargained for industry leading contracts!!! The reason Clinton was elected was because Bush#1 was no action i.e. high unemployment, increasing lay-offs, furloughs, airlines going bankrupt/ out of business. The rich getting richer.... wait a minute ,kind of sounds like present day, doesn't it? As far as his library, I really don't care. There's probably more to the story, like Arkansas hates unions. I don't know. Maybe he didn't want to pay somebody 25.00 an hour to push a broom. What are we talking about ,five people here? Jeeez

 

[rumpletumbler]

Typhoon,

What made you think I was talking about blacks? The remarks I made could have fit anyone uneducated, lazy, etc.

As for the Eastern strike and subsequent demise I remember thinking as it was going on, Don't they see they are going to kill the company. They aren't going to have their jobs anymore. Why can't they see it? That is all I know about the strike and thus my comment was only meant to say that if maybe they hadn't quit working their jobs and the airline could have been saved. I don't know if thats true or not. I am ignorant on the subject. At the time I was about 20 years old so read "stupid." It horrified me that people who had these jobs were just tossing them. My remarks were supposed to be funny and lighthearted and not taken like a KKK member. I was practically raised by a black nanny if that will give you any hint that I'm not racist.

Let me say this, I did fly a Citation II for about 30 hours (my part of the flying) there was more that I he flew where I was just doing right seat with a "scab" as you say who was flying 727's for Eastern when they went down. He was the most knowledgeable, coolest person I'd ever flown with. He was fun to fly with and had about 20,000 hours. He truly missed the airlines and I could tell that he had deep remorse that he would never work there again. He was probably the only person that I've ever flown with that if the **** really hit the fan I would feel comfortable with him being in command. He was awesome. I was sorry that he didn't have his dream anymore and it makes me mad at the gung ho union types that this goes on. He would be a superb airline captain for anyone but because he is on "the list" he never will be. I'd like for him to have that happiness. I'm not far enough along to understand the whole union issue yet but I understand making a commitment to do a job. If you make the commitment then you do the job right? Like I said I don't get it yet. Maybe I will as time goes on. When you take a job I think that your saying that you will do the job for that amount of money right? I dunno........Perhaps I compare it to much to the imbeciles that play baseball etc. for millions of dollars a year and then want more money. Read "PLAY" baseball. To me those folks should be taken out and beaten. I mean could they be any more ridiculous? My comments may not sit well with you but I try to speak my mind (something not widely accepted) and it does in the end help me to understand where others sit on an issue.

RT

 

[Typhoon1244]

At the time I was about 20 years old so read "stupid." It horrified me that people who had these jobs were just tossing them.

I can understand that. Sorry if I was rough on you.

Let me try to give you some concrete examples.

One of the first steps Lorenzo took to try to save money at Eastern was to discourage maintenance. There was a 727 that flew around for weeks with a fried APU--it had caught fire somewhere--and maintenance had been instructed not to service it. Pilots were routinely disciplined for writing things up. My father got hauled into the Chief Pilot's office one time for refusing to fly a DC-9 that had one thrust reverser that couldn't be locked closed. (It finally popped open for another crew at about 80 knots on takeoff.)

Now that's just part of the story. Lorenzo had a long history of taking profitable airlines and turning them into unprofitable ones. He also had a well-deserved reputation for being a union buster. The pilots, flight attendants, and mechanics realized very quickly that Lorenzo intended to dismantle Eastern to the benefit of Texas Air and Continental.

These people loved their jobs and their company too much to see it taken apart. As I said before, their hope was that a successful strike would make Eastern unattractive enough that he would sell it to somebody else.

Once they were committed to a strike, only one thing would have saved the day: no scabs. I'm sorry if this hurts people's feelings, but if Lorenzo hadn't had any pilots show up after 3/4/89, he would have been compelled to either (1) start talking to the employees, or (2) get the h_ll out of Dodge. Remember, those "evil unions" were actively, aggressively trying to find a buyer for Eastern!

At the risk of sounding like a disgruntled Vietnam vet, don't forget that I was there, man. I saw and heard for myself what Eastern's pilots--the ones who stayed on strike--were all about. They loved flying, they loved their company, and they hated Lorenzo and what he was doing to Eastern. They were willing to risk everything to get Eastern back to the way it was before '86.

Ask my dad how much he enjoyed flying for every little scumbag DC-9 outfit around for a fifth of the salary he used to make. Ask the guys who should have finished their careers as senior 757 captains, and instead went to 727 panels at other carriers, working for captains half their age. These guys didn't gleefully throw away their jobs.

I understand now that you were trying to be witty, but be careful: people have been thrown off jumpseats for far less caustic comments.

 

[MetroSheriff]

Once they were committed to a strike, only one thing would have saved the day: no scabs.

Not to mention a bankruptcy judge that didn't make his summer home in Lorenzo's hip pocket.

 

[publisher]

people

The people who crossed the picket line just delayed the inevitable.

The amazing thing about airlines in general is how long it takes them to go under. They loose money way beyond what the average company could, their results compared to the average American business are terrible by the usual things we judge them by, and yet the linger along.

You see you want someone to blame. Someone to hold accountable. A Lorenzo or a bankruptcy judge, Borman, anyone.

The fact is that everyone was to blame. All of Eastern's costs were out of whack. The productivity sucked. Others were taking their markets. Look at them all, Eastern, Pan Am, TWA, Braniff, National.

Be it a culture, a work ethic, an attitude, management, labor, everyone involved has their own piece of the blame pie.

I refuse to call the people who crossed the line and tried to save Eastern anything negative. It was not going to go on with the people across the street. That Eastern was over and not coming back. They can stand there and point fingers, call people names, etc. They were part of the problem and none of the solution. There was no one coming to help that group and no one who wanted to put the airline back together again. It was over and no one recognized it. Those who chose to follow that type of leadership cannot complain when they are led to oblivion..

Eastern died of terminal stupidity.

 

[Typhoon1244]

Re: people

The people who crossed the picket line just delayed the inevitable.

Can't say I agree with you. Most industry analysts believe that had it not been for Texas Air's mismanagement, Eastern would have survived through to today, albeit not in its original form (i.e. merger, etc.).

...you want someone to blame. The fact is that everyone was to blame.

I agree, but the Lorenzo takeover was the catalyst.

I refuse to call the people who crossed the line and tried to save Eastern anything negative.

Publisher, I have come to the conclusion that you are either (a) a scab, or (b) a close friend or relative of someone who is a scab. Your arguments sound exactly like the guys who later tried to justify their treachery and utter lack of solidarity and honor. In 1945, there were a lot of former Nazi leaders preaching about how they were only trying to do what was best for Germany. Granted, but it didn't make what they did less wrong.

By crossing the line and allowing Lorenzo to operate a minimal schedule, the scabs didn't help prevent the destruction of Eastern, they garaunteed it!

Eastern died of terminal stupidity.

And it appears to be catching...

 

[FD109]

Publisher,

Eastern's productivity was on a par with the other majors at the time (with the possible exception of Delta). Few of the majors had yet adapted to a deregulated environment; some still haven't.

Eastern's financial condition was not great by any measure, but the company certainly could have been saved with the help of competent management.

And, I hate to tell you this about your heroes, but those SCABS
(especially the off-the-street variety) who crossed the picket line didn't cross to save the company. They crossed to get a job they couldn't have gotten otherwise, or a promotion that would have otherwise taken years.

By the way, you seem to conveniently forget parts of the story that don't fit with your prejudices: This was not a situation that the unions forced the airline into; it was a situation that the Lorenzo management forced the unions into.

(1) Lorenzo forced the strike (with help from George Bush and by using the provisions of the Railway Labor Act) after the IAM agreed to accept binding arbitration. He didn't want the arbitration because an arbitrator would have certainly recognized and acted upon the blatant asset stripping that was killing the company.

(2) All of the union groups at EAL had for years taken pay cuts and given contractual concessions to help keep the company afloat. Nobody had more to lose than the employees. Why would we want to put the company out of business?

(3) After Lorenzo bought the company, all of the union leaders tried to meet with him to work out a plan to save the company. His answer was "I don't talk to unions."

(4) The National Mediation Board asked George Bush to appoint a
Presidential Emergency Board because the "situation at Eastern was not a typical labor management disagreement." For the first time in history, a President ignored an NMB request for a PEB.

(5) Bush also vetoed a bill that would have stopped the strike, imposed binding arbitration, and started a congressional investigation of Texas Air Corporation and Frank Lorenzo. What do you suppose Bush was trying to hide?

(6) And also don't forget that when the bankruptcy court finally took the airline away from Lorenzo it stated in no uncertain terms that "Frank Lorenzo is unfit to reorganize" the airline. The DOT also barred him from airline management after that because he was deemed "unfit."

Eastern had problems, but prior to Lorenzo those problems probably could have been solved. If the company was doomed, as you claim, it was due to Washington politics and the financial and political connections between the Bush family and Frank Lorenzo. And lets don't forget those fine upstanding SCABS who were on the first bus to Miami to help Lorenzo keep the company
going while he continued to strip it.

 

[jsoceanlord]

my boss used to teach flt engr's at eastern

then he was 727 FO there.

a few months ago he said that the mechanics were paid a pretty good hourly rate but they wanted more.

 

[FD109]

my boss used to teach flt engr's at eastern

then he was 727 FO there.

a few months ago he said that the mechanics were paid a pretty good hourly rate but they wanted more.

????? Was he trying to make a point?

 

[Boeingman]

The assumption and idea that Lorenzo stripped EAL assets and "gave" them to CAL is false.

The EAL assets that went to CAL were first sold to TAC (Texas Air Corp.) and then leased to CAL at userous market rates to upstream cash. We were stuck with the A300's that bled the company for years after EAL's demise.

 

[FD109]

The assumption and idea that Lorenzo stripped EAL assets and "gave" them to CAL is false.

The EAL assets that went to CAL were first sold to TAC (Texas Air Corp.) and then leased to CAL at userous market rates to upstream cash. We were stuck with the A300's that bled the company for years after EAL's demise.

You're absolutely correct. Lorenzo also charged Eastern usurious rates for using our own assets (like System One) after selling them to TAC. Lorenzo screwed every company he came into contact with.

By the way, is Continental still using System One?

 

[Boeingman]

By the way, is Continental still using System One?

I think it was sold to EDS in the early 90's.

 

[FD109]

I think it (System One) was sold to EDS in the early 90's.

Now that you mention it, I think you're right about System One being sold to EDS. It would be interesting to know how much it was sold for and what the form of payment was.

The 100 million in TAC junk bonds that was used to "pay" EAL for System One (valued at 600 million in 1986 according to the bankruptcy court) come due in 2007 and the proceeds will go into Eastern's estate at that time. That is, if those bonds have any value at all at that time.

 

[Boeingman]

Now that you mention it, I think you're right about System One being sold to EDS. It would be interesting to know how much it was sold for and what the form of payment was.

The 100 million in TAC junk bonds that was used to "pay" EAL for System One (valued at 600 million in 1986 according to the bankruptcy court) come due in 2007 and the proceeds will go into Eastern's estate at that time. That is, if those bonds have any value at all at that time.

I really don't remember any particulars about the S1 deal. I didn't realize TAC had future obligations to the EAL estate. I thought that TAC was dissolved some years back.

It would be nice if the EAL estate went after Frank and the other TAC officer's personal assets to back any pending obligations.

 

[FD109]

I really don't remember any particulars about the S1 deal. I didn't realize TAC had future obligations to the EAL estate. I thought that TAC was dissolved some years back.

It would be nice if the EAL estate went after Frank and the other TAC officer's personal assets to back any pending obligations.

The due date for the bonds is of historical interest only. Im sure TAC's responsibility for anything has long ago been eliminated.

If you or I had pulled some of the TAC/CAL/EAL swindles, you can bet they'd come after us, but former Presidents who aided in the swindles get airports in Texas named after them and former airline managers seem to be immune from any responsibility no matter what.

 

[Boeingman]

The due date for the bonds is of historical interest only. Im sure TAC's responsibility for anything has long ago been eliminated.

If you or I had pulled some of the TAC/CAL/EAL swindles, you can bet they'd come after us, but former Presidents who aided in the swindles get airports in Texas named after them and former airline managers seem to be immune from any responsibility no matter what.

I think it was a prelude to the widespread pilfering and corporate theft we see rampent today.

 

[jsoceanlord]

i think my boss was feeling burned out on being a piston cargo dog and he felt if the mechanics hadn't wanted more than the $20 odd an hour they were getting, my boss would be a rich A 300 Capt now

 

[publisher]

FD109

FD109

Are you actually reading anything in my posts.

What I have said is that Lorenzo showed up after the airline had a fatal wound.

No one else showed up at all. You can say it could have been saved but just who showed up to do that. No One.

If you think their costs and structure was like everyone else, give me some numbers. I think their maintenance cost was one of the highest ever according to ATW.

You can blame Lorenzo if you want, he stripped the assets but who was the alternative savior that was rejected.

The people I referred to that crossed are not my hero's. Just people. People who I refuse to condem.

I am not a scab because I have no interest in being a union member or any job that tells me that I have to be one. Frankly anyone who wants to label another individual like that is not going to be any friend of mine anyway.

People make all kinds of decisions in life to take care of their families. People who condem those people and rant that they do not want them on their jump seat, well, that is not your seat to determine. Like the idiots that say that it is their flying someone is taking. Let me clue you in, it is not yours.

Lorenzo was an easy guy to dislike. Dislike him. He did not come to save the old Eastern, the president did not come to save the old Eastern, and neither did anyone else