Union Seeking $50 Million to Promote Eastern Buyout

The president of the machinists union at Eastern Airlines announced plans Thursday to raise $50 million from striking employees and small investors to promote a buyout of the strikebound airline.

Charlie Bryan, president of District 100 of the International Assn. of Machinists, which struck Eastern on March 4, pledged to put up $100,000 of his own money to start the fund.

“I believe it is going to be a major breakthrough in putting the acquisition together,” Bryan told union members.

Bryan said the money would be organized into an investment trust by Shearson Lehman Hutton and possibly another investment banking firm and would be made available initially to investor Joseph Ritchie, who is trying to buy Eastern.

“It is another source of money that would drive this thing home,” Bryan said.

Eastern’s unions have backed Ritchie’s bid for Eastern, which filed for bankruptcy March 9, five days after the IAM struck.

Ritchie has pledged $25 million of his own money, and the AFL-CIO has pledged $65 million as a line of credit, Bryan said.

Bryan encouraged striking Eastern employees and sympathetic investors to pledge contributions by writing or telephoning the union. Those expressions of interest will be passed along to Shearson Lehman. The investment trust would be established later to accept those investments, he said.

‘Not Doing Well’

Eastern’s parent company, Texas Air Corp. of Houston, insists that the airline is not for sale. Management says it intends instead to rebuild Eastern as a smaller airline. Earlier this week, Eastern expanded its daily departures to 350 from 225, and further expansion is planned.

But Bryan said the company’s plan for rebuilding Eastern is failing.

“Eastern Airlines is not doing well,” he said. “The more they fly, the more they lose.”