Eastern Airlines Strike: 1 Year Later
On the first anniversary of the strike against Eastern Airlines by 8,500 members of the International Assn. of Machinists, thousands of strikers and their supporters demonstrated at airports around the country Saturday--not to proclaim victory but to celebrate the financial adversity of their archenemy, Frank Lorenzo, chairman of Eastern’s corporate parent.
While only about 40 union machinists have been on strike at Eastern’s small operation at Los Angeles International Airport, more than 400 people marched loudly and angrily here outside the adjoining terminals of Eastern Airlines and Continental Airlines, both of which are owned by Lorenzo’s Texas Air Corp.
The demonstrations underscored the unusual nature of the Eastern strike. Rarely has organized labor focused so sharply on an individual personality like Lorenzo. Rarely has a striking union based its propaganda attack on the inner workings of corporate finance, as opposed to wages and benefits. Rarely, too, has a union so drastically redefined what constitutes accomplishment during a strike.
By conventional standards, there is nothing to celebrate about the Eastern strike. Everyone associated with it has lost big.
The machinists, only about 3% of whom crossed the picket line, are still out of work, replaced by strikebreakers. Most have turned to other jobs or are living on $100-a-week strike pay and aid from $2 million in donations from machinists’ locals throughout the nation.
The 8,600 pilots and flight attendants who supported them for eight months before giving up are also largely out of work, most of their jobs taken by replacement workers.
Eastern, which was almost completely shut down in the early weeks of the strike and then had to seek protection from creditors in U.S. Bankruptcy Court in New York, lost $852 million last year, the most ever by a U.S. airline. Its daily flights have shrunk to 800 from a pre-strike level of nearly 1,100.
Some financial analysts predict it will die, to be merged with Continental.
Nevertheless, the message of Saturday’s demonstrations was that from organized labor’s point of view the losses have been worthwhile because they have tarnished the business reputation of Lorenzo, described for years by American labor leaders as the nation’s preeminent “union buster.”
Lorenzo permanently replaced union strikers with non-union workers at Continental in 1983 and began demanding huge wage concessions from Eastern workers after acquiring the beleaguered airline in 1986.
Labor leaders soon began to claim that Lorenzo was playing an elaborate “corporate shell game” to gradually dismantle Eastern and ultimately transfer its assets and routes to Continental, effectively ridding himself of union resistance.
On Thursday, a court-appointed examiner in Eastern’s bankruptcy case vindicated the union by finding that Texas Air had unfairly drained up to $400 million from Eastern in a dozen transactions. Texas Air agreed to pay Eastern $280 million in compensation.
However, as viscerally satisfying as examiner David Shapiro’s finding was to union members, it did them no direct good. The machinists’ perpetual hope has been that Eastern would lose so much money that Lorenzo would be forced to sell it, or that the bankruptcy court would appoint a trustee to run it.
Shapiro on Thursday refused to recommend a trusteeship to Bankruptcy Judge Burton Lifland, saying it could cripple the airline.
Nevertheless, strikers and their supporters on Saturday said they were cheered by Shapiro’s criticism of Eastern’s asset-transferring, saying it validated their contention that they went on strike not simply to avoid more wage cuts but to “save” Eastern from Lorenzo.
“There’s a certain value to people here today in seeing confirmed that what they went out for was necessary--he (Lorenzo) was stealing assets of Eastern to the benefit of Texas Air,” said Frank Waldner, an assistant to George Kourpias, national machinists union president.
Strikers said they have been cheered by the fact that Eastern has been forced to shrink to a smaller size and that its proportion of daily seats sold has fallen dramatically since last summer.
They also noted that Eastern has been unable to meet an earlier pledge to pay creditors 100% of the money owed and that the unexpectedly heavy losses at Eastern during the strike forced Lorenzo to pull Continental into the bankruptcy case to win creditors’ acceptance of a reorganization plan.
Continental will be required to make some payments to Eastern’s creditors under the new plan.
“Lorenzo’s on the ropes. There’s a feeling we’ve accomplished something there,” said Mike Rabatin, a 32-year-old striking ramp serviceman who has worked for another airline part-time since the strike. He is studying for a mechanic’s license and never expects to return to work at Eastern.
Eastern President Phil Bakes said last week in a speech that the airline will survive. “We’ve rebuilt an airline at Eastern and I must say we’ve built a damn good one.”
The Eastern strike began a year ago today after President Bush refused a National Mediation Board request to use his authority under the Railway Labor Act to delay the strike 60 days. Eastern had demanded that machinists take pay cuts of up to 36%.
The strike canceled almost 90% of Eastern flights, and when pilots and flight attendants refused to cross picket lines, Eastern canceled even more flights and laid off 9,500 non-union workers.
A month into the strike, the unions nearly won their goal of forcing Lorenzo to sell to an owner who would give employees part ownership of Eastern in exchange for wage cuts. But that buyout plan, orchestrated by former baseball commissioner Peter V. Ueberroth, collapsed a week after it was announced and the strike turned into a war of attrition. Union “victory” became redefined as finding another way of taking the airline out of Lorenzo’s hands.
Joseph Blasi, a labor-management relations expert at Rutgers University and the author of a new book on employee ownership of companies, said the Eastern strike is a warning about the warfare that will occur when workers are asked to sacrifice without receiving considerably more power over corporate decision-making.
