Hard Landing (33 page)

In another, even bolder, restructuring move, however, the Colonel triumphed. He made Eastern into an international airline.

In 1982, gasping for its final breath, Braniff had put its most valuable asset up for sale: its routes into South America, a prize steeped in history.

In the Lindbergh era Pan Am had established two great route systems deep into South America, like two long, slender fingers. The first ran from Miami through the eastern Caribbean and on to Venezuela, then along the Atlantic coast, at the eastern edge of the continent. The second route ran through the isthmus of Central America to Colombia, then along the Pacific coast through Ecuador, Peru, and Chile, with a leap across Argentina to Buenos Aires. In 1966, shortly after taking control of Braniff, Eddie Acker
spent several days in Juan Trippe’s office in the Pan Am building persuading Trippe to sell the routes along the Pacific side of South America to Braniff. Trippe ultimately relented.

The routes were like a. mint for Braniff, burgeoning as the
economies of Latin America swelled in the 1970s on oil exploration and a tide of money borrowed from the banks of the industrialized world. Latin America was the
best moneymaker in the Braniff system and in later years, alas, one of the few moneymakers it had.

When Braniff put out word that it was willing to part with the Latin routes, Borman snapped to attention. He raced to New York on a Sunday night in April 1982 and holed up with a delegation from Braniff, bargaining without interruption until a deal was struck at 2:30
A.M.
Braniff agreed to sell the routes to Eastern for the pittance of $30 million. After settling on the terms, Borman told his underlings back at corporate headquarters in Miami that if anything prevented the deal from closing, he would
fire the guilty party. They did not disappoint him. Within hours the historic routes were safely Eastern’s. The company considered the operation so exotic that the employee newsletter featured a
pronunciation guide for the new destinations: “LEE-mah,” “SAN-tee-AH-go,” and “Bway-nos-I-rays” among them.

It was perhaps Borman’s most brilliant stroke in nearly 12 years as an airline chief executive, but one would not have known it the following day. When Borman arrived at a ballroom in New York for the annual meeting of Eastern shareholders, hundreds of Eastern mechanics and ground workers were
noisily demonstrating outside. At one point 150 of the protesting mechanics crowded into the meeting room wearing anti-Borman buttons. Charlie Bryan was at it again.

And with good reason. The machinists’ contract was about to expire.

Borman’s pleadings for more concessions had not let up during Charlie Bryan’s first few years in office. The pilots, still enraptured with their astronaut chairman, assented to just about any concession that Borman requested, but the machinists were different. So calloused had they become to Borman’s continual demands that rest-room walls and daily conversation were soon sprinkled with the acronym BOHICA, as in “Bend over,
here it comes again.”

Borman had not done himself any good by committing a huge gaffe in one of his BOHICA demands. In a videotaped plea for concessions he noted that the wages involved were trifling—no more than “the cost of
a few six-packs of beer” from each paycheck. The
machinists, sensitive to their Joe Six-Pack image, took deep offense and began sporting lapel pins saying
NO DEPOSIT, NO RETURN
. Eastern for its part distributed buttons to employees that said,
I LOVE MY JOB. THANKS, EASTERN
.

With his contract up for renewal in early 1983 Charlie Bryan was eager to lock in a big wage increase after all those years of BOHICA. Colonel Borman recognized that he had to offer a decent settlement, but he said the company simply couldn’t withstand the kind of numbers Bryan was throwing around. The union set a strike date for March 1983. Fine, Borman said. Unless Bryan moderated his demands, the Colonel declared, Eastern would take a strike by the IAM.

Borman’s
aides were jubilant. At last Eastern was going to stage an epochal confrontation with the International Association of Machinists, a fight for which the officer corps of Eastern had been itching for some time. Some of Borman’s board members had likewise been urging a major confrontation. The pilots’ union had also grown resentful of the machinists, and the flight attendants as well.
Both groups indicated that if the machinists struck, they would cross Charlie Bryan’s picket lines. In a stunning display of cooperation, the pilots even agreed to yet another wage concession, although a temporary one—a 14 percent wage deferral. All Eastern needed to fly through a machinists’ strike was a corps of strikebreaking mechanics. “We can
kill these guys!” Borman’s people told each other.

The machinists’ membership meanwhile remained squarely behind Bryan. When Borman appealed directly to the membership with another “God bless you” letter, a fuel-tank cleaner and aircraft polisher in Miami named Barbara Mungovan mailed a poem to Borman explaining why the membership of the machinists’ union was fed up.

In good faith I took a wage freeze, and gave you my 3.5
.
You said you had to have it, to help Eastern survive
.
I gave up things I needed, I gave up a new car
Then you spent my money on a “union bustin’ ” seminar
.

I gave up my vacation, and my skiing trip
And all you gave to me was more gloom and doom lip
.
I gave up eating steak—cost of livin’, I’m not able
.
I’m sure your family thinks of us, when it’s on your dinner table
.

You feel now you don’t need us, after we supported you
.
Explain this to my son—it’s a hard thing to do
.
You say you can fly without us, that it’s easy to do
.
Frank, if you really think you can, then God bless you
.

Management presented a final offer—a 32 percent increase over 30 months. “If you turn down this contract,” Borman told the rank and file, “it will mean
the end of Eastern as we know it.” He added, “
If the union doesn’t accept, we’ll have a strike,” and further, “Eastern cannot and will not improve this offer.”

Borman was offering a substantial sum, yes, but most of the increase came at the end of the contract. The machinists, having fallen behind their peers at other old-line carriers, wanted more up front. Charlie Bryan would get it for them, they were sure. The machinists rejected Borman’s final offer three to one. But just to make sure he wasn’t leading his membership down the path to oblivion, Bryan discreetly had decided to take his measure of Eastern one last time.

In the years ahead, no one would hold greater influence over Charlie Bryan than Randy Barber. Though barely in his thirties, Barber had already become a high priest of economic organizing, a self-taught financial analyst with a strong leftist bent. Frank Borman would come to refer to Barber derisively as Charlie Bryan’s “
personal guru.”

Barber came by his ideological pretensions honestly.
Born in Wyoming and reared in Colorado, he was the son of a Methodist minister who had been one of the earliest leaders of the civil rights movement. Randy Barber himself, attending Dartmouth in the late 1960s, would later say that he majored in antiwar activism. After college Barber wound up a teacher in Bourges, France.

While there Barber became fascinated with a labor strike at a watchmaking factory in Besançon, France, where the workers had taken the unusual step of seizing the plant and resuming production on their own, without benefit of management. It was Marxism in action, with the workers seizing the means of production. Barber absorbed
himself in supporting the strikers by selling “wildcat” watches.

Once back in the United States Barber joined a radical writer named Jeremy Rifkind in a counterculture organization they called the People’s Bicentennial Commission. While combing the writings of Jefferson, Paine, and other Colonial intellectuals for quotes and comments with modern revolutionary relevance, Barber and Rifkind also threw themselves into real-life socialism, helping to establish a women’s chicken processing cooperative in Connecticut and supporting the worker boycott under way against the antiunion textile giant J. P. Stevens & Company.

As his labor activism intensified, Barber observed that one of the largest sources of capital in the world resided in the pension funds of America, funds that were created and managed to benefit workers. By 1978 he and Rifkind had written a manifesto for worker exploitation of the funds, called
The North Will Rise Again: Pensions, Politics and Power in the 1980s
. Rifkind ultimately drifted into other causes, but Barber became the toast of the lecture circuit in labor circles, pulling down grants and eventually landing a teaching post at Florida International University in Miami.

It was there that he was introduced to Charlie Bryan of the IAM’s District 100.

Bryan needed someone like Randy Barber, not only a bona fide lefty, in keeping with the increasingly liberal leanings of the machinists’ union, but also an intellectual and one, as it happened, with an aptitude for numbers. Thus did Barber find himself on Bryan’s payroll as a financial consultant.

In trying to convince the union that Eastern could not meet its 1983 wage demands, Borman took the remarkable step of offering to open the company’s confidential books to an independent review. Borman suggested that this review should be conducted by independent business school professors. Bryan refused the offer. “
In business schools they don’t teach trade unionism,” he explained. “I’m not interested in having someone who runs a business school determine the destiny of my membership.” If anyone were to examine Eastern’s books in behalf of the IAM, Bryan determined, it would be the longhaired, thirty-something Randy Barber.

Barber
brought in some pals who had honed their analytical skills
in the union campaign against J. P. Stevens. Together they traveled to Miami with a huge, padded suitcase in which Barber carried an Osborne One, one of the earliest desktop personal computers. Borman, true to his word, threw open the company’s ledgers, and Barber and his friends began running the numbers.

Among the records before them were Eastern’s most up-to-the-minute reports to its bankers. To Barber’s astonishment a few calculations showed that Eastern was professing its willingness to take a strike with just
12 days’ worth of cash in the till. It appeared to Barber that unless Borman came up with a lot of cash quickly, Eastern would be dead—in bankruptcy—in as little as two weeks if the machinists mounted an effective strike.

Hearing his consultants’ findings, Charlie Bryan decided to call Frank Borman’s bluff.

With the strike deadline looming, Borman received a call from a slight acquaintance whose in-laws included a member of the mob. The acquaintance told Borman his life was in danger; someone had put out a
contract to kill him.

Borman called the FBI, which obtained some information deemed to be corroborative. The FBI urged Borman to begin wearing a bulletproof vest. Borman also took a crash course in the use of a
9 mm semi-automatic pistol and strapped one to his ankle.

Borman took an additional security precaution. The original tipster had urged him to hire one of his relatives, a young man, and said that Borman should keep the fellow conspicuously in his company. The young man would be recognized by the mob as someone with an indirect link to the Genovese family. So for a few days there was a stranger accompanying Borman and hanging around his office, a talisman against a mob hit.

Meanwhile Borman and his aides were looking at the same cash figures that the machinists were privately celebrating. Borman’s underlings, undeterred by the low cash balances, wanted the strike more fervently than ever. They conducted a
fact-finding mission to the headquarters of Northwest Airlines in Minneapolis, one of the few carriers with any experience in taking strikes. Borman’s people had also lined up the necessary replacement workers. Many of Borman’s 18,000 nonunion employees were ready to toss luggage, clean toilets,
and perform the other tasks that the IAM members handled in addition to the more sophisticated crafts represented in the union.

Borman was ready too, but he wanted more cash in the bank. Even if the pilots and flight attendants marched through Charlie Bryan’s picket lines, Eastern would still undoubtedly experience a drought in revenue, at least for a while. Even a slight disruption could have a huge financial effect. Borman did not take on missions he expected to fail. He needed a cushion to help absorb the financial blow.

Borman scheduled a breakfast meeting with
Willard C. Butcher, the chairman and chief executive of Chase Manhattan Bank. Chase was Eastern’s lead bank—the Rockefeller bank, long managed in past years by Laurance Rockefeller’s younger brother, David. Now, however, there was new management at the top in the person of Willard Butcher. The banking group led by Chase maintained a $200 million line of credit for Eastern. Borman requested $110 million—enough, it would seem, for Eastern to take the strike.

There was one small technical problem. Tapping the remainder of the credit line would put Eastern in default on some of its borrowing covenants, the minimum financial standards that the banks required Eastern to maintain as a condition for lending it any money at all. All Borman needed was a simple waiver of the bankers’ covenants.

Borman explained the urgency of the situation to Butcher. His answer, to Borman’s astonishment, was no. “We’re not going to waive the covenants,” Butcher said flatly. He was a banker,
not a strikebreaker.

Seldom in his life had Borman been so depressed. He knew that caving in to the machinists would devastate his credibility, not only with them but with all of Eastern’s employees. Indeed, the pilots had even agreed to a wage deferral to fortify Borman’s financial preparations for a strike. Settling with Bryan would make it appear that Eastern was using the pilots’ generosity to subsidize the machinists’ big wage increase. But taking a strike with so little cash meant not only bankruptcy but liquidation—an outright seizure of Eastern’s assets. It would be an abject failure of the mission.