What made Eastern GO Under?

[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