Going For Broke at Eastern

By Janice Castro

Few labor-management battles in the 1980s have matched in bitterness the feud between Texas Air Chairman Frank Lorenzo and the machinists at Eastern Air Lines. Since 1987 the International Association of Machinists and Aerospace Workers (I.A.M.) has staunchly resisted Lorenzo's demands for wage concessions. At midnight last Friday, after more than a year of federal mediation failed to produce an agreement, the union launched a strike that is producing havoc for the carrier's 100,000 daily passengers and could throw East Coast airports and other transportation hubs into turmoil.

The walkout by some 9,000 Eastern machinists, baggage handlers and other I.A.M. members was supported by thousands of Eastern pilots and flight attendants who refused to cross the picket lines. Determined to continue operating, Eastern said it had hired 1,100 accredited mechanics and 5,500 unskilled workers to fill in for baggage handlers and other ground-service workers. But without its pilots, Eastern was nearly paralyzed. In contrast to an average daily schedule of some 1,040 flights, on Saturday the airline managed to get only a few dozen jets into the air.

Both sides in the dispute realize that a strike at the financially hemorrhaging carrier may finally send Eastern to "the corporate graveyard," as Lorenzo puts it. Eastern posted record losses of $335 million in 1988 and since then has been losing an estimated $1 million a day, a deficit that can only grow during the strike.

The machinists were the last major obstacle to Lorenzo's cost-cutting campaign. Since taking over the troubled airline in 1986, Lorenzo has slashed the work force from 40,000 to 30,000, dropped service to 14 cities and sold off the profitable Eastern Shuttle for $365 million to Donald Trump. Eastern's pilots and flight attendants had already submitted to wage cuts before Lorenzo took over.

Eastern started talks with the I.A.M. in October 1987, demanding $150 million a year in concessions. The airline wanted 15% wage cutbacks for machinists, which would reduce their top rate from $18.83 an hour to an average of $16. For baggage handlers, Eastern wanted to lower the top rate from $15.60 to $10. In exchange, the airline offered enhanced job security, along with training programs that would enable workers to move up to higher- paying positions. The I.A.M. rejected the wage rollbacks, insisting on an 8% raise that would cost $50 million a year.

The National Mediation Board, a federal agency that steps into deadlocked labor disputes, has tried in vain since January 1988 to bring the machinists and management closer together. As a federally mandated 30-day cooling-off period ticked down to the strike deadline, the mediators called on President Bush to establish an emergency board to examine the dispute, a move that would ! have delayed the strike an additional 60 days. The mediators pointed out the potential widespread impact of the strike, since the AFL-CIO has threatened to disrupt rail, bus and airline transportation across the U.S. in support of the I.A.M..

But Bush refused to intervene, contending that such a move was unlikely to produce an agreement. He also warned the unions against staging secondary boycotts of other carriers. As the strike deadline approached, Eastern's management made a last-ditch offer to reduce its wage-concession demands to $125 million, but IAM viewed the concessions as still too large.

Eastern's 3,600 pilots pledged to honor the strike even though Lorenzo had appealed to them at midweek via a 20-minute video taped at his Houston home. Said Lorenzo: "If the pilots, the flight attendants and the noncontract employees support the picket line and don't show up for work, Eastern cannot survive." As the tape rolled, Lorenzo took out a new contract he was about to offer his pilots and signed it.

The gesture fell flat. Under the pact, the pilots, who have given up $164.5 million in wages since 1986, were asked for an additional $64 million a year in concessions. The pilots rejected the contract and threw their support to the I.A.M. members, asserting that the airline's fleet could not be safely maintained during a mechanics' walkout. Said John Bavis, head of Eastern's pilots' union: "What's Lorenzo going to do with 225 airplanes? Take them down to the local Jiffy Lube?"

On Friday Eastern won permission from a U.S. district court to order I.A.M. workers to take a day off with pay. Citing "significant amounts of vandalism" at Eastern facilities last month, Joseph Leonard, chief operating officer of the airline, said the carrier was concerned that if the angry union members were not sent home they would engage in sabotage.

I.A.M. officials heatedly denied the charges. Said Frank Ortis, vice president of IAM Local 702 in Miami: "Our people are professionals. There is no sabotage." But as the strike got under way, 3,000 IAM members vented their anger outside Eastern headquarters in Miami. Some hurled rocks, bottles and cinder blocks, while others charged the gates.

Starting Saturday, other carriers struggled to accommodate Eastern customers looking for an alternative ride. Meanwhile, the airline once run by World War I ace Eddie Rickenbacker was heading into the heaviest cross fire in its history.

With reporting by Gisela Bolte/Washington and James Carney/Miami