Hard Landing (49 page)

The directors adjourned and were driven the few blocks to the Airport Hilton, where they ate salads and sandwiches and desperately
wondered what would happen next. Where, someone asked, was Bill Winpisinger? The machinists’ international president had promised to bring Charlie Bryan under control if the threat of a sale to Lorenzo had been insufficient; it was now time to call on Winpisinger to do so. Jack Fallon, the old Kennedy family pal on the Eastern board, tried to
track down someone on Ted Kennedy’s Senate staff in Washington for help in locating Winpisinger. On Presidents’ Day weekend it was an almost impossible endeavor.

Back to Building 16 trooped the directors, back into the auditorium, slamming shut the doors behind them at 7:30
P.M.
and leaving an even larger crowd of bystanders and onlookers assembled in the main lobby of Building 16. Soon word arrived that the flight attendants had settled, consenting to the demand for a 20 percent cutback to save Eastern. During a recess Borman encountered Randy Barber, the machinists’ advisor. “Well,” the Colonel asked, “is Charlie going to
change his mind?”

“You’ll have to ask him yourself,” Barber answered.

“I did,” Borman answered. “He said no. It’s too bad, but I’m through begging.”

As adamantly as Bryan was continuing to stonewall, those who listened carefully were noticing a slight wavering on one point. There would be no more concessions from the machinists, he was saying,
for this management
. Was Bryan leaving the door open to concessions if Borman were out?

The fact was, in Bryan’s view, that giving concessions to Frank Borman was like giving drugs to an addict, like passing a wine cork under the nose of a drunk. All it did was intensify his craving for more concessions. Implicit in Bryan’s reasoning was the possibility that the machinists
would
cave to the demand for concessions if the management of Eastern were somehow changed to Bryan’s liking. The union had made no secret of its wish to see Borman sacked. “Frank Borman—Resign Now!” the skywriters had written.

Of course the Eastern board could never sack Frank Borman on the motion of Charles Bryan; the directors of no major company would ever allow a union leader to dictate who occupied the office of chairman. But perhaps Bryan had shown them an opening. Perhaps there was a middle ground.

A recess was called.
Borman pulled Bryan into an elevator in the
lobby. They rose to the top of the building, to the executive offices, with the screaming-70s orange vinyl wallpaper and arched doorways. There Borman turned Bryan over to two of the board’s most distinguished members: H. Hood Bassett, one of South Florida’s leading bankers, and Peter Crisp, the Rockefeller representative. What if Eastern got a vice chairman to serve alongside Borman? the directors asked Bryan. Perhaps even someone of Bryan’s choosing? Would he
then
consent to the 20 percent cutbacks?

No way, Bryan said.

The directors had made an extraordinary offer and had been refused. Now they were really mad.

Bryan
offered a proposal of his own: instead of consenting to the 20 percent cutback, the union would commit to saving an equivalent sum through productivity improvements and other measures that didn’t invade anyone’s paycheck. Bryan would promise right then and there that if the union failed to save the company that sum of money, the 20 percent cutbacks would occur automatically in six months’ time.

No way, the directors said.

Borman appeared from his office, announcing that he had reached Winpisinger in Washington—Winpisinger, who had promised to “handle” Charlie. Borman turned the receiver over to Bryan and left him alone with Randy Barber at his side.

“
What’s going on?” Winpy asked his local president.

“Well, we’re going at it hot and heavy,” Bryan answered. “They’re threatening to sell the company to Lorenzo.”

“What’s your judgment?”

“The way they’re trying to destroy this company, there’s no way that I’m going to subsidize that,” Bryan said.

Winpisinger anguished over his predicament. He wished he could take over the bargaining himself, but there were no grounds to fire Charlie Bryan. Yet something had to be done fast to prevent the sale to Lorenzo. One way or another, the machinists simply had to come to terms. And between the two unionists—the international president, on the phone in Washington, and the local president, sitting in Frank Borman’s office on the ninth floor of Building 16—there was no disagreement about the price the rank and file would require for another BOHICA deal. That price was Frank Borman’s head.

“Goddam it,” Winpisinger said. “Get it done!” Bryan handed the telephone receiver back to Frank Borman and left the office.

Winpisinger then told his close friend that however much Borman might have been counting on him, he was powerless to rein in Bryan.

“You know this means the end of Eastern,” Borman answered, his voice growing raspy.

Maybe, maybe not. But all Winpisinger could say was, “So be it.”

It was 11:40
P.M.
when the directors reassembled in the blue auditorium. Frank Lorenzo’s deadline was rapidly approaching. Borman finally lost his composure. He was trembling. Pointing his finger at Bryan, he began to shout. “I’m going to tell the world that
you destroyed this airline!”

“And I’m going to tell them
you
did!” Bryan answered. “So where does that leave us?”

In the lobby, a telephone rang on the circular reception desk. An Eastern public relations executive lifted the receiver. “Continental Airlines,” he cheerfully answered.

The directors were both furious and frightened. Serving as an outside director in an earlier age accorded a bit of distinction and a little bit of money besides. It was so easy. A director showed up and got a check for a few thousand bucks. In the case of an airline board, a director and his wife also enjoyed free travel privileges, usually in first class. But the Eastern directors were now at risk for something they had never bargained for: the likelihood that they would be sued personally if they mishandled this delicate situation in any way.

Midnight had arrived. The directors had a bona fide offer from Frank Lorenzo on the table. Lorenzo, thank goodness, had just extended his deadline, although only to 4
A.M.
Option number one—fix it—appeared to have failed. If the directors failed to act on option number two—sell it—that left only the final alternative, tank it. In that case the shareholders of the company would wind up with nothing. As creditors standing last in a long line of claimants, individual investors would find that their shares were worthless. If the directors passed up the opportunity to get
something
for the shareholders by selling to Frank Lorenzo, they would be giving depositions and answering interrogatories for years, to say nothing of the risk to their personal assets, which in some cases were considerable.

The board’s lawyers, from the firm of Davis, Polk & Wardwell, tried to give their
clients some comfort. Nothing was forcing the directors to act immediately. Salomon Brothers, the investment banking firm advising the directors, had still not rendered an opinion of the fairness of Lorenzo’s terms to Eastern shareholders. In the absence of a fairness opinion, the board still had the cover necessary to take more time.

But what if Lorenzo went away? The board would have no choice then but to tank it.

Texas Air sent word into the boardroom that it would indemnify the directors up to $35 million if they were ever sued—
if
that is, they agreed to sell the company to Texas Air. The whole rotten affair had gone on too long. The paperwork had just been completed. It was time to vote.

The senior director, Jack Fallon, was presiding. The sale to Texas Air was moved and seconded …

“
Hold it!”

The meeting came to a halt as Charlie Bryan excused himself to the lobby outside. Soon, two other directors, Hood Basset and Peter Crisp, were called from the meeting room. With a gaggle of advisors in tow the directors and Bryan made their way to a small, private office on the other side of the lobby.

As the remaining directors waited, Borman left for a breath of fresh air. Under a nearly full moon he stood in front of Building 16. He rolled his tense shoulders and stared at the bronze image of Capt. Eddie Rickenbacker. He knew he had lost control of the situation. Eastern, he was sure, was going to be sold.

Returning to the lobby, Borman encountered the caucusing directors as they sped back to the boardroom.

“Well?” Borman asked Peter Crisp, the Rockefeller man. “What is it?”

“You’ll hear in a minute,” Crisp answered. With his proposal at issue, Charlie Bryan remained in the lobby.

When everyone else had been seated again at the directors’ table, Hood Bassett, the senior director, announced that the machinists were prepared to assent to concessions—but only of 15 percent. Bryan, the director explained, felt the machinists had already contributed the equivalent of 5 percent through increased productivity.

Some of the people in the room were incredulous that Bryan would chisel at such a moment, but there was more.

“Mr.
Bryan’s offer,” Bassett continued, the muscles of his face tightening, “is contingent upon the appointment of a board committee to search for a new chief executive officer.”

Well, at least it’s out
in the open, Borman told himself.

Borman rose, struggling against another loss of composure. “
Any allegation that the IAM has already given 5 percent is nonsense.” Besides which, he said, the company had to have the full 20 percent in any case.

He turned to Wayne Yoeman, Eastern’s chief financial officer, a retired brigadier general with a Harvard Ph.D. “
Don’t you agree we can’t do this with 15 percent?” Borman asked from the stage.

“It would collapse the company!” Yoeman answered.

Borman continued. “If the IAM will give 20 percent like the other employees, I’ll
submit my resignation this evening.”

Dick Magurno, the company’s general counsel, watched the scene unfold with dismay. The 5 percent was meaningless.
Of course
the company could survive without it. The company could even make money without it. But the directors had boxed themselves in. Emotions had overwhelmed everyone, on all sides. Charlie Bryan couldn’t give the board 20 percent, and the board couldn’t give him 5 percent.

Borman once again had to depart the meeting room, since his job was now at issue. In the lobby he approached Bryan. “Just so you know, I’m
volunteering to leave. No one can run a company under these circumstances.”

Then one of Bryan’s lawyers emerged from the auditorium. The directors would accept the 15 percent solution. They would allow Bryan to help pick a vice chairman, as previously offered—but they would not throw out Frank Borman.

“Their
promises are no good!” Bryan snapped. “Only drastic action will do!”

The crowd in the lobby had become a throng. Though it was now well after 2
A.M.
, employees were showing up to find out for themselves whether Eastern Air had been fixed, sold, or tanked. Finally the auditorium door flew open. “
They did it!” someone yelled. “They sold the airline!”

Joe Leonard, a top Eastern executive, emerged from the auditorium to grab Borman and haul him back inside. The directors gave him a standing ovation that rang into the lobby. When he reemerged, Borman was engulfed in the crowd of employees. They wanted to hear it from him. He began to speak softly, in a whisper.

“I’m
sorry to tell you that as a result of our inability to reach agreement, the board did the only thing it could do and that was to sell.” The buyer, he said, was Texas Air.

Borman paused.

“I’ll think of something more to say tomorrow,” he finally said, his voice cracking.

Following the board vote, the pilots were desperate to nail down their new contract. Giving up 20 percent was better than going to work for Lorenzo with wages still at issue. But some of Borman’s people were refusing to sign, even on the company’s hard-fought terms. Why should Eastern settle now? Why not let the new boss, Frank Lorenzo, bargain for himself?

Borman sensed he was on shaky ground legally, but turned to his aides. “Sign,” he instructed them.

It was 3:30
A.M.
when the pilot leaders went to him to offer their profuse thanks. They found him with
tears streaming down his cheeks.

“
I’m sorry,” he said.

Charlie Bryan tried to put the best face on an unthinkably horrible situation largely of his own making. Lorenzo, he thought, was at least a businessman. It might be a pleasure to deal with a businessman instead of an astronaut, Bryan thought. “It
might be surprising the relationship that could develop between Lorenzo and our organization,” Bryan said publicly. “For all his faults Lorenzo is a businessman who has demonstrated that he knows how to run a successful company. I can work with Frank Lorenzo.”

Within a few hours Bryan and his people had crafted a message to Lorenzo, which they sent by telegram.

In view of the actions of our board of directors at Eastern Air Lines, it appears you will be in control of the airline in the near future.

District 100 of the machinists union has been consistent in its pursuit of service excellence with maximum productivity and efficiency.… It is my sincere hope that we can succeed in developing a joint effort in pursuit of those goals. I believe that a cooperative relationship between us would be a pleasant surprise to the flying public, Eastern employees, and the entire financial community. I am at your disposal to schedule a meeting to begin exploring the challenges and opportunities that lie ahead.

Bryan would
never receive an answer to his invitation.

A day later the two Franks, Lorenzo and Borman, sat behind a table covered with white fabric and a forest of microphones. Although Eastern Air Lines would remain a separate company until the months of reviews and approvals and shareholder votes had been completed, it was only appropriate that the two men appear together before the media, whose representatives had crammed into the blue auditorium of Building 16. It was the largest media turnout in Eastern’s history, and as Lorenzo learned from the first question, they were ready for blood.