“Everything will be all right,” he assured the confused and angry pilot group. Baxter explained that he had been having a recurring dream in which a herd of cattle were charging toward him, their heads lowered. Then, in his dream, guitar music filled the air, and the animals slowed, and soon they were milling peacefully about him … and the man playing the guitar was Frank Lorenzo. The Continental pilots could not believe the bizarre words passing from the mouth of their leader. Something like 50 pilots at that moment rose from their chairs, walked out of the meeting, and decided to cross the picket lines, returning to work for Bakes and Lorenzo.
A few days later Baxter was in Washington for a union strategy session. He was convinced that Frank Lorenzo was nearby, and he wasn’t playing a guitar this time. Baxter said Lorenzo was out to kill him. Soon Baxter was recalled from office.
Into the job came Dennis Higgins, the former Texas International pilot. Under him the pilots’ union fought back gamely—in court, where it was convinced it could reverse the abrogation of its contracts, and in the corridors of Houston Intercontinental Airport, where striking pilots paraded with placards trying to discourage strikebreakers from flying. The picketing pilots received extensive written instructions for use in conversations with scab pilots: “Use Frank’s past lies against him.… Ask what the future under Frank will be like.… How can they now believe him after all the lies and half-truths? … Convince them we want to rebuild a profitable company as much as he does.… We all want to fly.… Under Lorenzo, Continental will ultimately fail.”
But everything went against the striking pilots, even under their newly invigorated leadership. The early court cases, in which the pilots tried to reverse the bankruptcy filing as an act of bad faith, were discouraging; the litigation would drag on for years. Over the months more and more pilots crossed the picket lines. Picket duty became a pathetic, solitary sojourn by downcast, out-of-work pilots, holding out on principle, silently walking up and down the airport hallways in uniform as passengers clambered past them to fly on the ultracheap fares that Phil Bakes had put in place.
In their frustration some pilots adopted goon tactics. The putrefied head of an elk was thrown through the picture window at the home of one strikebreaker. A firebomb was later pitched at the home of a scab pilot in Boulder, Colorado. A Continental pilot was arrested outside a Continental office in El Segundo wearing camouflage clothing and carrying bolt cutters and acid. Stink bombs went off in the Continental corridors in the hubs of Houston and Denver.
In November 1983, two months after the Chapter 11 filing, two striking Continental captains made a U-turn while driving in San Antonio and were pulled over by a state trooper. While the men were being questioned, another motorist pulled up with a bag she had seen the pilots ditch from their car. The bag contained two pipe bombs. Searching the car, the trooper found binoculars, a wig, a drill, maps—and photographs of houses belonging to three scab pilots, including one that was just a few blocks distant. The would-be bombers were sent to prison for eight years.
ALPA, though never linked to the bomb plot or any other acts of violence, was consumed with loathing for Lorenzo. In the pilots’ anthology of familiar quotations, one achieved new currency at ALPA headquarters: “Nobody ever lands with the gear up twice.” ALPA had learned its lesson. The world of deregulation was a cruel one, filled with vicious adversaries. The pilots vowed never again to be caught unawares. They would lay plans to exact revenge on Lorenzo. And in the meantime they would force other airlines, one in particular, to atone for his sins.
CHAPTER 10
BREAKING RANKS
As employees, pilots are a difficult lot. By convention and necessity they are the masters of their vessels, answerable to no one for as long as the engines are running. Airline presidents have the power to control entire fleets, to decide where and when every plane shall fly. But once those decisions are made, no one tells the pilot how, or even whether, to fly.
From its origins flying was touted as a libidinal experience for men, or at the very least something that intensified their masculinity, in the manner of sports and soldiering. A 1920s-era ad for a flying school appeared under the headline “The Aviator—The Superman of Now,” to which it added, “Flying is the greatest sport of red-blooded, virile manhood.” The official history of the pilots’ union notes that men had always been drawn to piloting in part for “the looks they got from attractive young women.”
To the extent that flying was deemed a masculine endeavor, it was all but forbidden for women. The writer Antoine de Saint-Exupéry, who spent years flying for a predecessor company of Air France, once declared, “Flying is a man’s job and its worries are a man’s worries.” Amelia Earhart had to be accompanied by her father on her first flight because of the pilot’s conviction that women might become hysterical when flying. Earhart’s fame was attributable in no small measure to the uncanny physical resemblance she bore to a notable, male aviator: “Isn’t she like Lindbergh!” one newsreel announcer proclaimed.
For most of airline history, and never more so than in the 1970s, the military served as the airlines’ farm club, turning out three quarters of the pilots who entered commercial aviation each year. These men were selected, both by the military and the airlines, in part according to whether they fit a paradoxical psychological profile: capable of operating well within a rigorous, rule-bound system, but also given to extreme independence and self-assuredness of judgment when the situation demanded. It was precisely this combination of attributes that also made pilots prone to unionism.
The founder of their union, David Behncke, had been a barnstormer, rising to prominence by campaigning for the installation of hoods over cockpits in commercial airplanes; up to that point the cockpit was usually exposed to the wind and the elements, the better to give pilots the feel of the slipstream. Behncke got the Air Line Pilots Association off the ground by shrewdly ingratiating himself with Franklin Roosevelt, becoming the only prominent figure in the industry to defend Roosevelt’s seizure of the airmail routes in the wake of the spoils conference. Roosevelt made a point of including the following language in the legislation that ultimately restored the routes to private contractors: “Public safety calls for pilots of high character and great skill.… Therefore the law should provide for a method to fix maximum hours and minimum pay.” In other words, in order to get an airmail contract, an airline would have to allow ALPA on the premises.
It is safe to say that the power went to Behncke’s head. He treated his own employees so abusively that they formed a union themselves, which he refused to recognize. In the late 1940s Behncke presided over the construction of a new union headquarters near Chicago’s Midway Airport, demanding alignment of the screws and bolts along a precise north-south axis. Behncke was ultimately thrown out of ALPA after the entire organization had defected to a rival union and he had changed the locks to prevent any of the old members from sneaking into the building. He was dead of a heart attack six months later, at age 55, in 1953.
But his creation of ALPA was an enduring legacy, and a vital one as the industry underwent its rapid evolution. Paying pilots was a simple matter when they spent an entire shift flying at 175 miles an hour or less. But the advent of new technology—four-engine airplanes that nearly doubled the speed of flight, followed by jets that doubled it again—made the issue of pilot pay vastly more complex. Flight times were often shorter than the time spent waiting for the next leg of a journey or waiting to leave the gate in the first place. From the pilots’ point of view, getting paid simply to fly was insufficient; they also wanted to be paid to wait. At the same time, while bigger and faster planes enabled the airlines to carry more passengers on a single flight, pilots demanded premium rates of pay according to the size and speed of the planes they flew. Over the years these demands created many rigorously formalized rules governing pilot pay.
The most precious asset of any pilot was his seniority. Seniority determined not only the size and speed of the airc
raft a pilot could fly but also whether he flew with the stripes of a second officer, first officer, or captain. Dr. Ludwig Lederer, the corporate physician at American Airlines in the 1970s, remarked that “the pilot’s life is founded on three things: sex, seniority, and salary, in that order.”
If it is fair to stereotype people according to the profession they have chosen, doing so with pilots is easy. They are macho, chesty, often full of themselves, and sometimes downright overbearing; theirs, as Lindbergh once remarked, was an activity in which “man is more than man.” At the same time pilots as a group top the scales in pure intelligence. They are decisive and usually passionately committed to an outcome.
Among them, no one displayed these traits more plainly than Dick Ferris.
Ferris’s wife, Kelsey, worked hard to keep their three sons from knowing how important their father was becoming in the hierarchy of United Airlines. But after Ferris was named the president of United in 1974, their subdivision in suburban Northbrook, north of Chicago, was buzzing with gossip. Was it true, eight-year-old Andrew Ferris wanted to know, that his father had gotten a big promotion?
Kelsey Ferris decided it was time the boys knew. “Yes,” she said.
“Oh! Is he finally getting to be a pilot?”
Andrew’s question was entirely apt. A United 747 captain named Jack Starr told Ferris that the president of United Airlines ought to know how to fly and offered to make a pupil of Ferris. Ferris initially demurred, saying he was too busy. Then, on a flight from the West Coast with his boss Eddie Carlson, Ferris reached into his travel bag and pulled out some flying manuals that Starr had left in his office to whet his interest.
“What are you doing?” Carlson demanded.
Carlson was horrified that Ferris would even consider taking up flying. The presidency of United was too demanding, and there were risks in learning to fly. But the chairman’s disapproval was like a starting flag waving in Ferris’s face.
Ferris was a natural pilot, Starr would later comment. “He listens, cooperates, thinks, responds quickly, and is basically an aggressive personality.” When Fortune magazine found out that the new president of United was learning to fly, it crowned him “fearless Dick Ferris.” After only six hours of instruction Ferris was flying solo. Later he flew Learjets. Ultimately, when placing one of the biggest aircraft orders in history, Ferris made a side deal in which the head of Boeing agreed to schedule Ferris at the controls for one of the first test runs ever conducted for the big new Boeing 767 jet.
In addition to personal gratification there was practical virtue in Dick Ferris’s new hobby. Ever since the bitter battle over the three-man cockpit, the pilots’ union had been estranged from management at United. Even Eddie Carlson had failed to gain the full trust of the pilot workforce. Dick Ferris’s becoming a pilot would begin to break the cycle of suspicion at United. Here at last, in the pilots’ view, was a president who cared, who took such an interest in their work that he went to the extraordinary time and trouble to learn the job himself (even if doing so was as much fun as a fellow could have). Ferris, the pilots realized, would understand, even if he didn’t fully agree with, the arcana of work rules. He would acquire a more profound appreciation than the average CEO for the delicacy of safety, for the infinitesimal tolerances of flying, for the skill necessary to save an airplane in a vulnerable position. Indeed Ferris in later years would experience firsthand the shock of losing an engine past the point of no return on a takeoff roll. He would once watch his instruments flicker into darkness due to an electrical malfunction. Ferris would know piloting and he would know pilots. The leadership of the pilots’ union embraced Ferris and his management so totally that they awarded him a union seniority number. He was literally one of them.
When the pilots’ contract was up for renewal in 1981, Ferris, in a radical departure from industry practice, personally involved himself in the nitty-gritty of the talks. His goals were to get the pilots to fly more hours per month and to break at last the three-man cockpit. Ferris gave money to the union to finance a series of weekly informational newsletters that reflected his point of view. He opened the company’s books to union representatives. He schmoozed the rank and file at every opportunity. And grasping the power of the new, high-cost communications technology becoming available, he sent video messages by satellite and distributed videocassettes to the company’s pilot “domiciles” around the country. Gathered around the big screen, the United pilots witnessed an act of male genius. “Some of your golf games are getting too good,” Ferris scolded them. “I’ll see you get 15 days off [a month] and that you are the best paid in the business. But the rest of the time your heart and your body and your soul are mine.”
With Ferris’s charismatic coaxing, the United pilots overwhelmingly assented. The new work agreement, with more flying per month and the abolition of the three-man cockpit on small jets, was such a departure from past practice that it became known as the “blue skies” contract, a name taken from the blue books in which contracts were published. Ferris, to be sure, made some concessions of his own. He promised never to establish a nonunion runaway shop, as Frank Lorenzo had with New York Air. He vowed to furlough no pilots. And he agreed to major increases in pay; a 747 captain in the early 1980s would pull down $161,000 a year, about twice what most of Ferris’s middle managers earned.
“We just entered a new era of labor management relationships here,” John F. Ferg, the union’s chief negotiator, proclaimed.
Ferris was riding high. Before long, in April 1982, Eddie Carlson retired from his chairman’s position with the parent company, UAL, Inc., leaving Ferris alone at the top—and more indomitable than ever. “Eighty to 90 percent of my time is spent working with people: getting them to do what I want them to do, when I want them to do it, and, most importantly, getting them to do it willingly,” Ferris explained to a group of business school students at Purdue, without acknowledging a trace of irony. “That’s my job.”
He could not be still. Like an adolescent boy unconsciously bouncing his knee under his desk in algebra class, Ferris squirmed and fidgeted behind his massive desk, custom-built from granite, at United headquarters in Elk Grove Village. No matter how hard he was working, sitting at a desk made Ferris feel sedentary, so he outfitted his office with a podium so that he could work standing up.
He called together his station managers from around the country and sternly forced them to defend every dollar in their budgets (much as Bob Crandall did at American). One by one they gave their reports, in alphabetical order according to the cities they managed (except for the poor soul from Hawaii, who had to go first because his flight home left so early). Ferris listened intently, glowering at anything that displeased him. The sessions grew so confrontational that the managers awaited their turns with sweat running down their backs, nervously making face and finger gestures at each other while the boss was concentrating on somebody else.
In much the way that a pilot feels toward his aircraft, Ferris by 1984 was feeling proprietary toward United Airlines. The company at last was making real money. Meanwhile, however, the takeover mania sweeping the oil industry was showing signs that it might metastasize to commercial aviation. Ferris was panicked at the thought that his great airline—the airline that he was at last turning around—might fall prey to some raider.
In August 1984 Ferris convened an emergency meeting of his board of directors. Board meetings simply did not occur in August. “What the hell is this about?” the directors asked one another as they arrived.
Ferris told the directors of his takeover fears. “I’ve worked too hard and given too much of my life to this company to let that happen,” he said.
Thus, he explained, he had taken steps to conduct a leveraged buyout of United in which he and a few other top members of management, and possibly the employees as well, would become the owners of the company. Ferris said he had already spoken to Goldman, Sachs, the Tiffany of investment banks, which had expressed a willingness
to arrange the billions of dollars in financing.
Ferris could see that he had stunned his board. “Our mouths were open,” director Charles Luce would later recall.
The United board did not often stand up to Dick Ferris; no board lightly balked at the ambitions of a chief executive officer. And for the most part Ferris had always treated his directors with the proper deference, such as when he included them in the deliberations over whether United should support deregulation. But in this situation Ferris was making the directors anxious. “Well, Dick,” said Walter A. Haas, Jr., the former chairman of Levi Strauss, “suppose the board doesn’t want you to do this?”
By happenstance Luce, recently retired as chairman of Consolidated Edison in New York, had at that very meeting become the senior director of United, director Robert D. Stuart, Jr., having excused himself in the midst of the meeting to catch a flight to Norway to begin an appointment as ambassador in the Reagan State Department. The position of senior director was unofficial but critically important. More than a decade earlier Tom Gleed had acted as senior director in sacking George Keck from the chairman’s position and bringing in his friend Eddie Carlson from Western Hotels (the chain had since been rechristened Westin).
In his capacity as senior director Luce asked Ferris to excuse himself from the room. Among the first to speak up was retired astronaut Neil Armstrong, one of the board’s most venerated members. Armstrong was quiet but of stubbornly determined integrity. He had just been through the drama of a major takeover as a director of Marathon Oil, which U.S. Steel had rescued from Mobil. The United directors, Armstrong said, should not have their judgment clouded by the fact that it was their own chairman who was proposing the leveraged buyout.
“This is a takeover offer, fellows,” Armstrong said. “We’ll have to shop for a better offer.”
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