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- <text id=89TT0703>
- <link 90TT2072>
- <link 90TT0620>
- <link 89TT1012>
- <title>
- Mar. 13, 1989: Going For Broke At Eastern
- </title>
- <history>
- TIME--The Weekly Newsmagazine--1989
- Mar. 13, 1989 Between Two Worlds:Middle-Class Blacks
- </history>
- <article>
- <source>Time Magazine</source>
- <hdr>
- BUSINESS, Page 42
- Going for Broke at Eastern
- </hdr><body>
- <p>The strike disrupts travel and could bankrupt the airline
- </p>
- <p> Few labor-management battles in the 1980s have matched in
- bitterness the feud between Texas Air Chairman Frank Lorenzo and
- the machinists at Eastern Air Lines. Since 1987 the
- International Association of Machinists and Aerospace Workers
- (I.A.M.) has staunchly resisted Lorenzo's demands for wage
- concessions. At midnight last Friday, after more than a year of
- federal mediation failed to produce an agreement, the union
- launched a strike that is producing havoc for the carrier's
- 100,000 daily passengers and could throw East Coast airports
- and other transportation hubs into turmoil.
- </p>
- <p> The walkout by some 9,000 Eastern machinists, baggage
- handlers and other I.A.M. members was supported by thousands of
- Eastern pilots and flight attendants who refused to cross the
- picket lines. Determined to continue operating, Eastern said it
- had hired 1,100 accredited mechanics and 5,500 unskilled
- workers to fill in for baggage handlers and other
- ground-service workers. But without its pilots, Eastern was
- nearly paralyzed. In contrast to an average daily schedule of
- some 1,040 flights, on Saturday the airline managed to get only
- a few dozen jets into the air.
- </p>
- <p> Both sides in the dispute realize that a strike at the
- financially hemorrhaging carrier may finally send Eastern to
- "the corporate graveyard," as Lorenzo puts it. Eastern posted
- record losses of $335 million in 1988 and since then has been
- losing an estimated $1 million a day, a deficit that can only
- grow during the strike.
- </p>
- <p> The machinists were the last major obstacle to Lorenzo's
- cost-cutting campaign. Since taking over the troubled airline in
- 1986, Lorenzo has slashed the work force from 40,000 to 30,000,
- dropped service to 14 cities and sold off the profitable Eastern
- Shuttle for $365 million to Donald Trump. Eastern's pilots and
- flight attendants had already submitted to wage cuts before
- Lorenzo took over.
- </p>
- <p> Eastern started talks with the I.A.M. in October 1987,
- demanding $150 million a year in concessions. The airline wanted
- 15% wage cutbacks for machinists, which would reduce their top
- rate from $18.83 an hour to an average of $16. For baggage
- handlers, Eastern wanted to lower the top rate from $15.60 to
- $10. In exchange, the airline offered enhanced job security,
- along with training programs that would enable workers to move
- up to higher-paying positions. The I.A.M. rejected the wage
- rollbacks, insisting on an 8% raise that would cost $50 million
- a year.
- </p>
- <p> The National Mediation Board, a federal agency that steps
- into deadlocked labor disputes, has tried in vain since January
- 1988 to bring the machinists and management closer together. As a
- federally mandated 30-day cooling-off period ticked down to the
- strike deadline, the mediators called on President Bush to
- establish an emergency board to examine the dispute, a move
- that would have delayed the strike an additional 60 days. The
- mediators pointed out the potential widespread impact of the
- strike, since the AFL-CIO has threatened to disrupt rail, bus
- and airline transportation across the U.S. in support of the
- I.A.M..
- </p>
- <p> But Bush refused to intervene, contending that such a move
- was unlikely to produce an agreement. He also warned the unions
- against staging secondary boycotts of other carriers. As the
- strike deadline approached, Eastern's management made a
- last-ditch offer to reduce its wage-concession demands to $125
- million, but IAM viewed the concessions as still too large.
- </p>
- <p> Eastern's 3,600 pilots pledged to honor the strike even
- though Lorenzo had appealed to them at midweek via a 20-minute
- video taped at his Houston home. Said Lorenzo: "If the pilots,
- the flight attendants and the noncontract employees support the
- picket line and don't show up for work, Eastern cannot
- survive." As the tape rolled, Lorenzo took out a new contract
- he was about to offer his pilots and signed it.
- </p>
- <p> The gesture fell flat. Under the pact, the pilots, who have
- given up $164.5 million in wages since 1986, were asked for an
- additional $64 million a year in concessions. The pilots
- rejected the contract and threw their support to the I.A.M.
- members, asserting that the airline's fleet could not be safely
- maintained during a mechanics' walkout. Said John Bavis, head of
- Eastern's pilots' union: "What's Lorenzo going to do with 225
- airplanes? Take them down to the local Jiffy Lube?"
- </p>
- <p> On Friday Eastern won permission from a U.S. district court
- to order I.A.M. workers to take a day off with pay. Citing
- "significant amounts of vandalism" at Eastern facilities last
- month, Joseph Leonard, chief operating officer of the airline,
- said the carrier was concerned that if the angry union members
- were not sent home they would engage in sabotage.
- </p>
- <p> I.A.M. officials heatedly denied the charges. Said Frank
- Ortis, vice president of IAM Local 702 in Miami: "Our people are
- professionals. There is no sabotage." But as the strike got
- under way, 3,000 IAM members vented their anger outside Eastern
- headquarters in Miami. Some hurled rocks, bottles and cinder
- blocks, while others charged the gates.
- </p>
- <p> Starting Saturday, other carriers struggled to accommodate
- Eastern customers looking for an alternative ride. Meanwhile,
- the airline once run by World War I ace Eddie Rickenbacker was
- heading into the heaviest cross fire in its history.
- </p>
-
- </body></article>
- </text>
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