Air Freight Layoffs Were Planned in ‘91, Executive Says : Employment: Decision to streamline Burlington reportedly was made by two men later fired in shakeup.
Recent work-force cuts at Burlington Air Express, including the layoff of 67 employees late last week, had been planned since December, a company executive said Monday.
The decision to streamline operations was made while Roger I. MacFarlane and Peter Thorrington were co-chief executives, said Dennis Eittreim, a Burlington employee for 19 years and vice president in charge of the company’s Caribbean and North and South American operations.
MacFarlane and Thorrington were fired in a mid-May shakeup, bringing the total number of affected employees to 76. At the time, the two were in the midst of a management-led buyout of Burlington from its parent company, Pittston Co. in Greenwich, Conn. Pittston executives said that they asked MacFarlane and Thorrington to resign because the two men’s personal interests clashed with those of Pittston and Burlington.
Eittreim said Monday that last week’s layoff was unrelated to last month’s executive shake-up, in which four other managers and their assistants associated with MacFarlane and Thorrington were fired. It was warranted, he said, “by the continued weakness of the worldwide economy,” adding that there are no plans for further work-force reductions.
Two other executives--Anthony Hooey, executive vice president in charge of Europe and Africa, and Christopher Porter, executive vice president for operations in the Far East, Australia and New Zealand--resigned June 1 rather than substitute their one-year contracts with Burlington for three-year contracts.
The latest layoff represents a 12% reduction of Burlington’s work force in Irvine, where it now employs 530. The company, one of the nation’s largest international air freight handlers, has a total of 625 employees in Orange County now and 5,300 worldwide.
Eittreim said the staff reductions “were already planned under . . . MacFarlane and Thorrington before they left. . . . This plan was discussed and developed late last year.”
MacFarlane said Monday that each manager was responsible for keeping his division efficient and profitable.
He acknowledged that “we supported appropriate actions by each of the division leaders to improve their performance and profitability and discussed possible layoffs.”
But “carrying out this layoff, deciding on the scale of the layoff and the people to be laid off were done by the current management,” he said.
In late April, Pittston said in its first-quarter financial report that it plans to keep “for the indefinite future” its ownership of the air freight subsidiary, which lost $1.1 million on revenue of $219 million for the quarter. In the comparable period of 1991, Burlington had lost $1.5 million on sales of $202 million.
The first quarter is weak for air freight companies. For 1991, a time when most such companies lost money, Burlington reported a $19.8-million profit, more than double its earnings of $9 million for 1990.
“Larry L. Rodberg, co-founder of Burlington Air Express, used to say that planes don’t move air freights, people move them,” Paul R. Schlesinger, an analyst with the brokerage Donaldson Lufkin & Jenrette in New York, said Monday. With most of Burlington’s senior executives having been replaced, he said, “relations with customers might be affected. This could compromise business relationships.”
MacFarlane and Thorrington between them still own about 3% of Pittston’s outstanding stock, a stake worth about $16 million. They have no plans to sell their shares, MacFarlane said: “We continue to be interested in finding a future in investing in and managing Burlington.”
