Tells you alot about a company when everyone goes out on strike against them, guess the IAM told ALPA, TWU and the AFA to strike also?[BR]
[P style="LINE-HEIGHT: 15pt"][FONT face=Arial size=2][SPAN style="mso-fareast-font-family: Times New Roman; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA"]During the 1970’ and 1980’s it was a very difficult time for the airlines. With the passing of the Airline Deregulation Act of 1978 airline carries were provided with new freedoms to expand their route systems and the flexibility to develop innovative pricing structures. This flexibility allowed the carrier to further grow into new markets. However, deregulation brought about airfare wars. Airlines were competing to remain competitive in the market, waged airfare wars against their rivals. Many air carriers were having great difficulty in keeping their doors open.[/SPAN][/FONT] [/P]
[P style="LINE-HEIGHT: 15pt; TEXT-ALIGN: justify; mso-line-height-rule: exactly"] [FONT face=Arial size=2] [FONT style="BACKGROUND-COLOR: #ffff00"]Eastern Airlines was not exempt from having to contend with price wars as well as being a participant. This placed many air carriers in a vulnerable state to unwanted hostile takeovers and mergers. Eastern fighting to keep its doors open, sold majority share holdings to Frank Lorenzo, owner of Texas Airlines.[/FONT][/FONT][/P]
[H4 align=center][FONT face="Trebuchet MS, Arial, MS Sans Serif" size=2]Frank Lorenzo[/FONT][/H4][BR]
[P align=left][FONT face="Trebuchet MS, Arial, MS Sans Serif" size=2]Francisco (Frank) A. Lorenzo was one of the most notorious players in the history of commercial aviation in the United States. Born in 1940, he was the son of Spanish immigrants in Queens in New York. He went to Columbia University and then received a business degree from Harvard Business School in 1963. He had an early interest in aviation that led him to take control of Texas International Airlines (TIA), a company that was on the verge of bankruptcy, in 1971. The Deregulation Act of 1978 allowed Lorenzo to expand his business dealings and he systematically began to acquire companies such as Continental Airlines, New York Air, Frontier Airlines, and Eastern Airlines, in his bid to compete with the new non-unionized airlines. By the mid-1980s, he had acquired a reputation for vicious business practices that were particularly unfair to the labor force. By filing for bankruptcy at different points in his career, he was able to bypass unionized labor and impose harsh working conditions on the employees of his various corporations. His rise to the top was finally thwarted when Eastern Airlines collapsed in 1991 and a U.S. bankruptcy court ruled that Lorenzo was unfit to run the company. Lorenzo left the debacle with a vast personal fortune and tried to found a new airline called Friendship in 1993, but the U.S. Department of Transportation did not grant him permission.[BR][BR][BR][BR][BR][BR][BR]
[P style="LINE-HEIGHT: 15pt; TEXT-ALIGN: justify; mso-line-height-rule: exactly"][FONT face=Arial size=2][SPAN style="mso-fareast-font-family: Times New Roman; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA"]Lorenzo, filed for restructuring of Eastern Airlines under the bankruptcy laws. Lorenzo in his desire to have greater control over the airline industry brought in non union workers and created a new air fare war that many airlines could not compete against a non union airline. Eastern further offered upscale service such as its first class seats to coach prices this further eroded the airline industry, carrier after carrier had filed for bankruptcy. Lorenzo was now placed into a position that he could pick and choose which airline he would take over. Lorenzo on a hunt took over several airlines such People Express, Continental, New York Air, etc[/SPAN][/FONT][BR][BR][BR]
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[P style="LINE-HEIGHT: 15pt; TEXT-ALIGN: justify; tab-stops: 10.2pt; mso-layout-grid-align: none; mso-line-height-rule: exactly"][FONT face=Arial size=2] Frank Lorenzo was not satisfied. Driven by profits, Lorenzo requested machinists of Eastern Airlines to take a pay cut. However, the machinist union refused to do so. This brought about a war between labor and management. The machinist union IAM (International Association of Machinist and Aerospace Workers) called for a strike. The strike brought about air passenger delay and the company began loosing millions in daily revenues.[O😛] [/O😛][/FONT][BR]
[P style="LINE-HEIGHT: 15pt; TEXT-ALIGN: justify; tab-stops: 10.2pt; mso-layout-grid-align: none; mso-line-height-rule: exactly"][FONT face=Arial size=2] The United States Bankruptcy Court intervened after a creditor brought suit against Eastern Airlines. The court very much aware of Lorenzo’s labor practice, appointed Martin Shugrue as temporary trustee over Eastern.[O😛] [/O😛][/FONT][BR]
[P style="LINE-HEIGHT: 15pt; TEXT-ALIGN: justify; tab-stops: 10.2pt; mso-layout-grid-align: none; mso-line-height-rule: exactly"][FONT face=Arial size=2] Eastern was unable to overcome its fiscal downfall and as a result was forced to close its doors on [?XML:NAMESPACE PREFIX = ST1 /][ST1😀ATE Year="1991" Day="18" Month="1"]January 18, 1991[/ST1😀ATE] . Many had accused Lorenzo of selling off assets and transferring Eastern’s aircraft to Texas Air. Other accusations included depleting Eastern’s pension fund. Many felt Lorenzo was only interested in purchasing defunct air carriers in order to strip the carriers of its assets. This was a major blow to Lorenzo’s credibility in the business community.[/FONT][O😛] [/O😛][/FONT][/P]