In his first several years Borman—hired and championed by Hall, but reporting to Higginbottom—walked a tightrope between the two factions. The situation was resolved when the Eastern board finally intervened on the side of Hall, the chairman. Higginbottom, the president, was forced out. Borman, however, would never forget one of Higginbottom’s admonitions to him. “Frank,” Higginbottom told him, “this company is almost impossible to manage.”
Borman had an ally in 65-year-old Laurance Rockefeller, who remained one of Eastern’s principal shareholders. Rockefeller saw in Colonel Borman many of the same qualities that he had revered as a boy in Captain Rickenbacker. “Frank is like the Captain in modern dress,” Rockefeller once remarked. “The virtues are the same—guts, drive, energy, leadership.” Rickenbacker, however, had been capable of letting down his guard every now and then and relaxing. Borman, in Rockefeller’s view, was “unremitting.”
Acting at the board’s request, the company named one of its directors, a former Reader’s Digest president, to a senior vice president’s post in the marketing department. None of the company’s officers—not even Hall—was informed of the true role of the man from Reader’s Digest: to act as an investigator, nothing less than a spy, for Laurance Rockefeller. Rockefeller’s mole discreetly interviewed the senior officers about the company’s problems, and when the fingers swung around to Floyd Hall, Borman was among those doing the pointing. He inveighed against his mentor’s Harvard-inspired management techniques, he reported that Hall was protecting deadwood in the executive ranks, and he informed Rockefeller’s man that the factionalism between New York and Miami was still crippling the company, even long after the ouster of Sam Higginbottom as president.
Eastern had been losing money for years; the bankers were threatening to pull the plug. “Frank Borman is the only man in the United States who can save this company,” Rockefeller now declared to his fellow board members. In May 1975 Borman was informed that he was being appointed president of Eastern Air Lines. “Thank you,” he answered. “I’ll do my best.”
Borman had one foot in the door, but Hall still had two years remaining as chairman and chief executive. The two men began quarreling. Hall attacked Borman’s orders to outfit passenger service agents in bright red jackets (as Delta had done) so they could be easily identified by deplaning passengers. Hall, suffering from health and marital problems, was moving further into left field, in Borman’s view. So Borman decided to confront the man who had brought him to Eastern in the first place.
He told Hall to step down. Hall protested that he had two more years to go. In that case, said Borman, the board would have to decide between the the two of them.
Thus was Floyd Hall—like MacIntyre and Rickenbacker before him—forced from the executive suite. Two years ahead of schedule, Borman, 47 years old, became the chief executive officer of Eastern just before Christmas in 1975.
He would sink or swim not on the buoyancy of his triumphs in space but on his capabilities as a corporate executive. Eastern’s fortunes would rise or fall with him as well, and with them in turn the livelihoods of 33,000 employees. There was, Borman declared, no place for living in the past. “There has always been a certain romanticism associated with the airline business,” he warned his senior executives in a memo after becoming chairman. “We must avoid its perpetuation at Eastern at all costs.”
Still at his fighter pilot weight of 168 pounds, the new chairman of Eastern assumed command from a headquarters office known as Building 16. It might as well have been Stalag 17. Located on the perimeter of the airfield at Miami International Airport, it was a nine-story structure of poured concrete and skinny windows with all the aesthetic appeal of a shoe box standing upright. In an effort to dress up the ninth-floor executive offices, arched doorways and other Moorish touches had been added, along with a sweeping cantilevered stairwell. The walls were done in a plastic wallpaper of orange stripes. Into Borman’s office went air force fighter-plane paintings and photographs of his two sons, both in uniform; they too had attended West Point. On his desk sat a paperweight that read, “Press on. Nothing in the world can take the place of persistence.”
The atmosphere swung between the barracks and the locker room. People who trifled with insignificant business matters were dismissed as “dipshits.” Once, getting briefed on the grounding of yet another L-1011, Borman barked, “Have you fixed it yet, or are you going to make a diner out of it?” During a meeting of officers he once asked a female vice president to fetch him a cup of coffee. (She refused.)
Whatever his macho mind-set, there was not a trace of ostentation about the Colonel. He drove Chevrolets—at one point an early-model Camaro convertible that he had rebuilt with his own hands. His musical tastes ran to Merle Haggard. He ordered every officer in the company (himself included) to pitch in as baggage handlers during the busiest periods, explaining, “Everyone whose mission is not critical to the peak period goes out to help.” He scrapped the “Wings of Man” slogan as a pretension. Long before the idea ever occurred to Lee Iacocca’s people at Chrysler, Borman reluctantly agreed to take to the airwaves as Eastern’s advertising spokesman in a memorable series of television advertisements. “Don’t make me sell Tang,” he protested.
Though he craved leadership roles, Borman was no joiner. He accepted an invitation to become a member of the secretive and exclusive Conquistadores del Cielo but came to hate the club. The idea of grown men gathering at an isolated ranch struck him as weird, like a bunch of adult Boy Scouts hanging out in the woods. “If you quit this organization,” he was told by Paul Thayer, a legendary aerospace executive, “you’ll never go anywhere in this industry.” Borman quit anyway.
Aloof, analytical, characterizing his management challenge as a “mission,” Borman set about to restore discipline and profitability to Eastern. Within months of becoming president he fired or demoted 24 vice presidents. He drew attention to costs by walking from office to office flipping off light switches. Fresh from his wife’s alcoholism recovery (and his own newborn life as a teetotaler) Borman banned drinking during company hours (including lunch), a not unreasonable policy for a company whose executive offices were located at the edge of the airport tarmac.
Executive perquisites came under severe attack. Eastern had a policy of allowing officers to lease company cars, including Mercedes Benzes, which the company depreciated practically overnight and then sold to the officers at the reduced value; Borman wiped out company cars. An executive jet, used by executives for personal as well as business travel, was jettisoned; Borman required Eastern executives to begin conducting their travel by commercial airline instead. He curtly fired a longtime Eastern spokesman, golfer Jack Nicklaus, calculating that the company maintained the costly endorsement contract principally because the executives enjoyed the opportunity to golf with him occasionally. Borman, for his part, hated golf; it was too slow a game. “You’re not selling enough tickets,” he said. “Good-bye.”
Though Borman, like most airline chief executives, had a weakness for new planes, he did succeed in negotiating perhaps the most lucrative airplane deal in history. He agreed to make Eastern the proving customer for the A-300, assembled in Toulouse, France, by the Airbus Industrie consortium from parts made throughout Europe. Desperate to break the hold of Boeing and McDonnell Douglas in the United States, Airbus agreed to lease a number of planes to Eastern for six months free of charge. Borman told an employee meeting, “If you don’t kiss the French flag every time you see it, at least salute it.”
Then Borman turned his attention to the most vital yet delicate matter of all: the livelihoods of his employees. They owed it to the future, Borman told them, to cut back their wages.
Like a politician on the stump, Borman launched a never-ending round-robin of trips through the Eastern system; even employees working in the middle of the night on the loneliest airport shifts got a dose of give-it-up religion. He began a letter-writing campaign to his employees, drumming them with the
need for sacrifice. “One of the great joys in life,” he told them, “is found in subordinating one’s personal desires and efforts to the success of a group.” He alternated from the velvet glove to the iron fist, between bended knee and thrusting chest, depending on the circumstances. There was always a crisis, it seemed—a mission, dangerously close to failure—for the sake of which Borman would convince employees to give up wages they were scheduled to receive. “We could be unable to meet our payroll,” he warned at one point. Sen. Edward Kennedy’s deregulation proposals became the bogeyman, constituting “a very serious threat to the continuation of Eastern Air Lines as we know it.” Finally, in November 1978, he wrote, “The President has signed the deregulation bill.… It’s quite clear that we do not have the [necessary] resources—airplanes, cash.” And with each letter came another plea to forgo something that employees otherwise had coming. “God bless you all,” he added in the last paragraph of nearly every letter.
While some of these programs involved outright concessions by employees, the most creative and long-lasting was more complex and certainly more innovative: employees agreed to wager a percentage of their salaries on the company’s profitability. If earnings totaled less than a stipulated level, employees received less than full pay—96.5 percent of what they were otherwise entitled at that time, to be precise. If profits exceeded the agreed-upon benchmark, wages too would swell—to 103.5 percent of the baseline level. Borman called this the “variable earnings plan,” or VEP.
In so cyclical an industry as aviation, in which tiny changes in interest rates and fuel prices and macroeconomic conditions have a huge effect on the bottom line, VEP gave Borman a stunning management advantage. It turned his employees, in essence, into Eastern’s bankers, enabling him to borrow tens of millions of dollars from them—unsecured, not so incidentally, and without interest—and to repay them only if the money happened to be available at a later time, which, as the years progressed, it increasingly was not.
In the profit and loss column, Borman’s first five years running Eastern were pages from an executive storybook. Borman turned the losses of the Hall regime into the greatest profits Eastern had ever (or would ever) report. There were problems, grave problems, but they only increased the challenge—and the heroism of his triumphs. “His associates,” The Miami Herald crowed, “say that he alone resuscitated a dying airline.” Added Time magazine: “Borman has accomplished a remarkable turnaround.” Borman celebrated Eastern’s profitability by placing some of the largest airplane orders in history, and this time the airplanes were not free. Already a ward of its bankers, Eastern went even more deeply into hock.
Then Charlie Bryan became president of Eastern’s largest union.
Bryan did not initially consider himself an enemy of Frank Borman. On the contrary, as Bryan was coming into prominence in District 100 of the International Association of Machinists, he sat with Borman at a company dinner party and thrilled to hear Borman describe the mission of Apollo 8. Bryan could feel the goose bumps on his arms as Borman spoke. “I’m sitting here with the Magellan of our time,” he told himself.
Political reality soon brought Bryan down to earth. By the early 1980s, with interest rates swelling and fare wars spreading, Borman’s variable earnings plan was varying in the company’s direction much more frequently than in the employees’. Borman’s hero status with employees began to wear thin: in one anti-VEP protest employees carried signs saying, “Earth to Frank: No More VEP.” But Borman cried that Eastern needed VEP more than ever. New York Air had recently invaded the Eastern shuttle’s market, and People Express was running cut-rate flights in Eastern’s mainstay market to Florida.
Bryan won the IAM presidency on a promise to eliminate VEP, which he dubbed the “veritable extortion plan.” Bryan, who had worked so many odd jobs in his life, who cared so deeply about the kind of car he drove and the number of bathrooms in his house, knew how much a few dollars a week meant to a union worker.
Bryan indeed was the living embodiment of the principles of the machinists’ union, an organization devoted like few others to the dollar value of a paycheck. When Lyndon Johnson laid down a 3.5 percent limit on wage increases throughout the United States, the IAM struck five airlines for 39 days and walked away with a 5.5 percent wage increase. The IAM made a mockery of President Nixon’s wage and price freeze. When Jimmy Carter’s wage “guidelines” became law, an IAM settlement at Eureka Vacuum Company was declared illegal by the Council on Wage and Price Stability.
Charlie Bryan’s zeal for that tradition was evident the instant he assumed office. The outgoing district president, in a gracious newsletter offering congratulations to Bryan, added a sincere if awkwardly written farewell: “Mr. Frank Borman, whom I have the utmost respect for, was the company official, in my opinion, that did the most for Eastern Air Lines in the 31 years I have had an employee-employer relationship.” Twelve days later Bryan, now in control, distributed a newsletter of his own, which, if nothing else, was grammatically written. “The Gestapo tactics of Martin Ludwig Borman and his Nazi scorched earth policy,” Bryan wrote, “will not work with this union leadership.”
A few months later Bryan showed up at Eastern’s 1980 annual meeting of shareholders with a briefcase full of proxies, about 100,000 shares’ worth, and nominated himself to serve on the Eastern board. He knew of course that he had no chance to win, but that was beside the point. As he later explained, “I did it just to get attention.” At the annual meeting the following year, Bryan showed up with even more proxies, this time on the order of a half-million. It was still only a fraction of what the election of a director required, but he managed to use the meeting as a public platform for dressing down the Colonel. “You made history with Apollo 8,” Bryan said. “Why do you ignore the history lesson the British learned regarding ‘taxation without representation’ by continuing to ask our employees to give, contribute, and sacrifice, but [telling them] ‘don’t get involved at the top’?”
Bryan’s penchant for grandstanding was equaled by his talent with the media. He equipped District 100 with fax technology, then in its infancy, and began distributing his bulletins to the press as well as to his membership. He understood, as few union people ever have, that he could use publicity to help fulfill his purposes only by delivering a compelling story. When the company began forcing machinists to take their coffee breaks at the same time of day, the long lines at the canteen caused some workers to return to their posts a few minutes late. Wages were docked. Bryan called Borman and barked, “Quit fucking with people just because I got elected!” Bryan then planted the suggestion that a strike, or at least a work slowdown, could erupt over the issue. Before long a big headline asked, “Will Coffee Ground Eastern?” In the glare of the publicity Eastern backed down.
Another round, however, went to Eastern. Borman had been smarting ever since another airline executive had teased him about one of the featherbedding work rules that the machinists maintained at Eastern. The rule required Eastern to keep three union members on hand when a plane pushed back from the gate—one to drive the tractor and two to walk along the wings. Borman established new procedures when in 1981 Eastern was preparing to open a new terminal at Atlanta’s Hartsfield Airport, a terminal for which Borman had borrowed heavily to help Eastern block the inroads that Atlanta-based Delta was continuing to make on Eastern territory. Eastern calculated that the machinists’ push-back rule would force it to employ 44 machinists that the company otherwise would not require at the expanded operation. No, Borman ordered, from that point forward Eastern would use the reverse thrust capability of its engines, not a push-car operator with his union wing walkers.
Bryan would cotton to none of this. He raced to Atlanta and stood behind the wheels of the first plane to push back with reverse thrust. The showdown was at hand. In one corner, weighing in at about 160 pounds, from West Virginia, the frowning and square-shouldered Charlie Bryan. In the other corner, tipping the scales at 100,000 pounds, from Sea
ttle, Washington, a Boeing 727. The plane lurched. All eyes were cast to Charlie. And with those big tires slowly revolving in his direction, Charlie Bryan flinched. He dove out of the way to avoid getting rolled over by the aluminum beast (later saying he had been knocked away by the blast of an engine).
Borman and Bryan shared a notable face-off in Caesars Palace, where the IAM was holding a national convention. Borman, friendly with the union’s international leadership, had been invited to address the group. Bryan had just published a newsletter suggesting that Eastern was deliberately understating its profits in order to pressure employees into more sacrifice.
Bryan was at a slot machine when he heard himself being paged. The hell with it, he said, continuing to play. Suddenly Borman was stalking purposefully toward him. “Bryan,” he barked. “Why didn’t you answer my page?”
“I’ve got a cup full of coins!” Bryan cried.
Ignoring the protest, Borman grabbed Bryan by the arm and pulled him into the coffee shop. The men sat down.
“What the hell are you trying to do?” Borman demanded. “Make us look like a bunch of crooks?”
Bryan peered back quizzically. He had no idea what Borman meant.
“Look at this!” Borman commanded, shoving Bryan’s accusatory newsletter in front of him.
Bryan peered down. “I can’t read this,” he said. “I don’t have my glasses.”
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