Borman to Quit Eastern Airlines Post : Will Leave After Texas Air Merger to Join Car Dealership

Eastern Airlines chairman Frank Borman will resign when the airline’s $674-million merger with Texas Air is completed in midsummer and will join his son in operating a car dealership in Las Cruces, N.M., an Eastern spokesman said today.

Jerry Cosley, Eastern’s vice president for corporate communications, said the former astronaut disclosed his plans Sunday night at a dinner party in Coconut Grove for 200 friends and business associates.

Cosley said Borman, 58, could have remained as Eastern chairman after the merger. “It was Borman’s shot to call,” Cosley said, adding that Frank Lorenzo, who controls Texas Air, “left that up to him.”

May Write Book

Borman was quoted as telling the group that he would accept a position as a director of Texas Air and that he was “seriously considering” writing a book about his 16 years with Eastern.

Borman has been under fire from Eastern’s unions for years, and particularly in the last few months after he insisted that all the carrier’s employees take an 18% pay cut. Several of the unions demanded during negotiations earlier this year that Borman quit as chairman.

Eastern has not made a year-end profit since 1979. Borman made a cost-cutting gesture with other top executives of the airline in January by taking a permanent 25% pay cut, trimming his own annual salary to $300,000.

Fare Competition

Borman blamed the airline’s sometimes bitter labor disputes and financial troubles on discount-fare competitors spawned by industry deregulation.

Early this year, the firm cut pay and benefits for its 7,000 flight attendants and later won wage and benefit concessions from its 4,000 pilots. In February, Eastern’s creditors told the airline to win labor concessions or be declared in technical default of some of its $2.5 billion in debts.

But its 13,000-member machinists union have a contract that runs through 1987, and International Assn. of Machinists local president Charlie Bryan refused to open the contract for renegotiation.

That prompted Borman to blame him for the airline’s sale, a charge Bryan denied.

“He came here with a national stature. It is a tragedy that he just did not develop the way he could into a . . . trusting relationship with employees,” Bryan said of Borman.

The chairman of Eastern’s pilots union, Larry Schulte, indicated that Borman would not be missed. “I think everyone is looking forward to a new leadership and a new style of management, and they are ready to rally behind Lorenzo if he can capture that,” he said.

“With his leaving, it really is the end of a dynasty at Eastern.”