Skygods: The Fall of Pan Am

by Gandt, Robert

  Not everyone was ecstatic about the deal. Pan Am’s labor unions, still battle-weary from the Great Strike, were dubious about anything served up to them by Ed Acker. “It’s cutting off our right arm,” said a pilots’ union official. “What’s next?”

  The board of directors, as well as Acker’s own executives, already knew how strapped the airline was for cash. Something had to be liquidated, and the Pacific was the only route system that had a ready buyer. The Atlantic could not be sold, because that was the bulk of the Pan Am system and was the principal reason for the domestic feeder network. Pan Am had never gotten around to constructing a similar domestic feeder system for its Pacific destinations.

  When the board of directors voted on the sale, pilot Bob Gould, representing the labor coalition, voted no. It was the only dissenting vote.

  Even Marty Shugrue, who was initially horrified by the deal, shrugged and conceded that, okay, maybe the sale was the only way to survive. But after that, what? If the proceeds were used to fund more losses—business as usual—then all they had done was convert more assets to vapor. It would be only a matter of time before they were selling something else.

  “We have to expand,” Shugrue told anyone who would listen. “New domestic routes, new equipment.”

  And that, paradoxically, had always been Pan Am’s burning ambition—before deregulation and before the National acquisition. Somewhere during the Seawell-Acker assets sell-off, the domestic priority had been dumped. Now they had to undo the errors following the National acquisition and try to rebuild what they had dismantled.

  Was Ed Acker listening? With Acker, it was hard to tell.

  One aspect of Acker’s deal would be looked back upon with appreciation. Besides bargaining for the sale of assets, Acker negotiated the transfer of people. As part of the package, United Airlines would hire 2,700 Pan Am employees, including 1,000 non-U.S. workers, about 100 managers, 1,200 flight attendants, and 410 pilots.

  Had Acker been looking out for the interests of Pan Am people when he shook Ferris’s hand? So it seemed. In this instance, it was a fortuitous arrangement for both sides. United needed the Pan Am people, because it was in one hell of a hurry. By acquiring the Pacific routes, it had just plunged itself into competition with powerful Northwest Airlines as well as the strong foreign carriers, Japan Air Lines, Cathay Pacific, Singapore Airlines, and a host of newcomers. There was no time to learn the new territory, train crews, hire station personnel, establish offices. United needed a quick-start, turnkey operation and the Pan Am personnel were already in place. All they had to do was change uniforms.

  Whatever the reason—altruism or hard-nosed business reality—it was a principle that Pan Am employees would later wish had been painted on the airplanes and engraved in the aluminum: Employees go with the assets.

  In future transactions, it would not be so.

  Four-hundred-ten airmen, as it turned out, would transfer to United. But which 410? Like everything in the airline business, it went by seniority.

  For those eligible to transfer—the most senior captains, first officers, and flight engineers who were already qualified in the 747s and L-1011s—it was a time for soul-searching. And reality-checking. Stay with Pan Am, or emigrate to the domestic, bus-driving turf of United Airlines?

  Captain Rich Selph was one of those who agonized over the decision. Go or stay? Few pilots were more dipped in Pan Am blue than Selph. He had been one of the early AWARE pushers. He had made the pilgrimage to Washington. It was Selph who had hounded the senator of free enterprise, Proxmire, on his dawn jog. Now Selph was a fast-rising young management pilot who had just been offered a chief pilot’s desk.

  Like many pilots, Selph was an analytical person. He believed numbers. One night until past midnight he sat in his kitchen filling a steno pad with his calculations. He kept coming up with the same answer.

  Maybe Pan Am would hang in there. He hoped so. Did he think it would? Not really. There was no question that United would be around until long after he had retired. And despite all the romantic reasons for sticking with Financially Troubled Pan Am, Selph had some overriding considerations. Four of them. They were all approaching college age.

  Decision made. He had to go.

  So it was with most of the eligible pilots. They had been through a decade of uncertainty with Pan Am. United was a sure thing. United was offering them the rarest of all commodities in the airline business—a second chance.

  Not all were so analytical. Harry Shepard, a 747 pilot, went through the interview and took United’s prehiring physical. He even attended United’s indoctrination class. While he was there he took a look around. He didn’t like the dark hats, or the tacky bus driver uniforms. He didn’t like the silly sixth-grade-level pilot’s manuals they issued him. He sure as hell didn’t like the officious, patronizing bureaucracy of the huge airline. Take a number and have a seat over there. We’ll call you when . . .

  “Never mind,” he told the United clerk. “Here, you can have your manuals back.”

  “I beg your pardon . . .”

  “I won’t be needing them. I changed my mind.”

  Shepard trudged across the parking lot. He got in his car and drove back to the Financially Troubled Pan American. He felt like a convict who had just declined a pardon.

  Les McDivitt, a 747 captain, summed it up for the stay-behinds: “I started out in this business wearing a white hat. I’ll finish up with a white hat.”

  It was like breaking up a family. Twenty and more years they had been together at the Imperial Airline. They were new hires together, navigators, engineers, copilots, captains, Skygods-in-training.

  No one was happy about it. There were the inevitable jokes. The transfer was raising the average IQ of both airlines. Someone likened the exodus to a boat lift of refugees. They were applying for asylum at United.

  Nobody wanted a farewell party. It just looked too foreboding when guys like Rich Selph and most of the senior check pilots were jumping ship en masse. The departing airmen quietly came by to collect their final paychecks. They shook a few hands and mumbled stuff about good luck and keep your nose up and stay in touch and all that. And they were gone.

  The Financially Troubled Pan Am set about reinventing itself. One happy manifestation of the United boat lift was that most of the transferees—the boat people—left from the top of the seniority list. That meant everyone left behind took a giant leap upward in seniority. Pan Am suddenly needed new pilots in every category. Longtime first officers were suddenly catapulted into the left seat. Flight engineers began their long-awaited training to be real pilots. It was an orgy of training and promotion unlike anything the company had ever seen.

  And that wasn’t enough. Pan Am needed more pilots. Recall notices went out to furloughed pilots. Soon, every furloughed Pan Am airman had been summoned back to the Imperial Airline.

  Amazingly, even that wasn’t enough. So rapid was Pan Am’s reinvention of itself, so great was the need to fill cockpit seats, that the most stunning announcement the pilots had heard in twenty years came forth: Pan American would be hiring new pilots.

  Hiring? The long drought was over. It meant the new hires weren’t new hires anymore. Now they would have some real new hires to kick around.

  Chapter Twenty-Seven

  White Knights and the Maximum Skygod

  It beats working for a living.

  That was what you heard when you ran into the recalled furloughees after their ten-year-plus exile. They showed up in the crew lounges, the hotels, the crew hangouts. They were wandering back to Pan Am like bedouins from the desert.

  And everyone asked them the same question: “Why did you come back to Pan Am?”

  It beat working for a living. It was part joke, part truth. For some, being furloughed had been a trauma like a hit-and-run. They had been rudely hurled out of the warmth of their airline job and onto the mean streets. And they weren’t prepared. Until the day of the F word, they had lived their entire a
dult lives beneath an institutional umbrella—home, college, the military, then the airlines. Not one minute of their lives had been spent in unemployment lines or perusing classified job ads.

  Flying jobs out there were scarce. Another airline position—a real job with a company like American or Delta or United—had been out of the question. For one thing, the other airlines didn’t want old guys, pilots like them who were pushing forty or more, and in any case they didn’t want pilots furloughed from another company, because they figured you would jump ship and go back when your old airline recalled its furloughed pilots. It was a Catch-22. You couldn’t get a job because you’d already had a job.

  Bernie Giere was furloughed in 1976. With a young family at home, he hoped to find a job near where he lived, on Long Island. Weeks went by. Nothing turned up. There were no flying jobs, no slots available in the Air National Guard, not even ground jobs with an aviation company. Bill collectors were closing in. His savings were gone. So Giere took a job in which he had previous experience. It was the same thing he’d done during his summers between college semesters. He went to work for a construction company laying an extension of the Long Island Expressway. It was entry-level work, meaning he had to crawl down into the bottoms of the excavations where they were pumping out mud and silt before sinking the supports and pouring concrete for the expressway.

  It wasn’t fun. It was dirty, sometimes dangerous work, but it was employment and it beat the hell out of not working.

  The hardest part for Giere was when he was down there slinging mud and wrestling machinery—and he would hear a jet pass over. Through the mouth of the excavation he would glimpse a silhouette, flashing past like a subliminal image. Giere would take a minute to gaze around him, at his mud-caked boots, at the wet cement and the jackhammers. He felt like a prisoner on a chain gang.

  This went on for almost a year, the mud and the glimpses of airplanes. One day he got a call from the Air National Guard unit based at Suffolk County, on Long Island. “Bernie, we’ve got an open slot out here flying F-4s. You’re next on the list. Do you want it?”

  The F-4 Phantom was the fighter he had flown on active duty in the Air Force. You didn’t make a lot of money flying in the Guard, scarcely more than construction work. But it was flying. Giere thought it over—for less than a microsecond. He had seen enough subliminal images from the excavations. He threw his mudcaked boots away.

  Some of the furloughees found jobs with the nonscheds—fly-by-night charter operators with cast-off Boeing 707s and Douglas DC-8s—hauling freight and cattle and produce up from Latin America and out to the Middle East. The pay was lousy. The airplanes had peeling paint and anemic engines. But the furloughees grabbed up the nonsched jobs when they could get them. It was flying. And it kept some of the bills paid until. . . the recall.

  Someday there had to be a recall. The first Pan Am furloughees had hit the street in 1969. Another gaggle, several hundred strong, joined them in 1976.

  Five years went by. For some, ten. It couldn’t go on forever, they told themselves. Someday Pan Am would have to require more pilots. In 1979 came deregulation. The furloughees checked their mail for the recall notice. Now Pan Am, after all these years, would be expanding in the deregulated domestic market. Pan Am would have to recall the new pilots it would need.

  That was when they received the nastiest shock since their first furlough notices. Pan Am was buying National Airlines. With the purchase, Pan Am was taking aboard all the National pilots. It was freaking unbelievable! No furloughees would be needed.

  The furlough went on, like an endless drought. Five more years. Six. Seven. Not until 1986 did Pan Am start calling back the pilots it had furloughed more than a decade before.

  By now, of course, they had changed. Gone was the fighter pilot swagger, the clear-eyed optimism of the new-hire days— “Sure, in no time we’ll be flying 747s and new Lockheeds and SSTs and . . .”

  They were just glad to be on the payroll. Never mind all the flimflammery about supersonic flight and new airplanes and how quickly they would be captains. It was enough just being in the cockpit, sitting sideways in the flight engineer’s seat of a beat-up 727.

  They wore reading glasses and combed their graying hair in innovative ways to cover the bald spots. They all had stories. Some had established successful new careers. They were coming back to Pan Am because during all those years they thought they were missing something. Flying was something they loved.

  Some came back because things hadn’t gone so well out there. They had tried selling insurance and used cars. Some had built houses. A few, like Bernie Giere, had done construction work. Flying for Pan Am, even on the bottom of the seniority list, was still a hell of a good job. It beats working for a living. . .

  A few didn’t come back. Denny Smith had always been interested in politics. While he was furloughed he ran for office in his home state of Oregon. When he received his recall notice from Pan Am, he respectfully declined. Congressman Smith already had a full-time job serving his district in the U.S. House of Representatives.

  Another was Dave North. North was a Naval Academy graduate with a master’s degree and 400 carrier landings. When Pan Am furloughed him, he didn’t find a flying slot, but he found a job writing about flying. He went to work as a correspondent for the McGraw-Hill publication Aviation Week. Within a few years he had progressed upward through the editorial hierarchy, serving as an editor, then a bureau chief, managing editor, and eventually editor-in-chief of the magazine. And that was where he intended to stay.

  Marty Shugrue didn’t come back either, at least as a pilot. Shugrue had never actually left Pan Am. He had spent his furlough years in Pan Am management, ascending the corporate ladder—all the way to the top rung. Shugrue was now Pan Am’s vice-chairman and chief operating officer.

  Many, like Kurt Axelsson, returned because they wanted to see what they had been missing. Axelsson came from a family of New Jersey fishermen. When he was furloughed he went back to Cape May, where he had grown up. He and his wife and his kids established a restaurant, working twelve-hour days, seven days a week, for ten years. Now their restaurant, the Blue Claw, made more money in a summer month than he could earn in a year flying for an airline. But Axelsson was tired of the grind. It was time to do something that was fun. Like flying.

  Marc Born ran a successful executive jet charter business. When he was recalled by Pan Am, he “retired” from his business. “I was fed up with having a phone stuck in my ear eight hours a day,” he said. “Flying is more civilized.”

  Several pilots, like Gus Littlefield and Mike Pipkin, went back to school and earned law degrees. But that wasn’t wholly satisfying either. “I’m glad I did it,” said an attorney-pilot. “I’m more glad I’m done with it. What the world needs is good pilots, not more lawyers.”

  Everyone was back who wanted to be back. Pan Am even had new hires—real new hires—bright-faced young men and something very different—women—in the cockpit.

  But nobody was kidding himself. Things were not as they used to be at the old Imperial Airline. Not only was the Pacific gone, so was all the high-flying talk about SSTs and the moon. Pan Am was in a survival mode. There were even hushed whispers about. . . Tango Uniform.

  You heard it a lot around the crew rooms these days. It was an old military euphemism, exported to the airlines. Tango Uniform was radio-phonetic pronunciation for the letters TU. It stood for tits up. In normal usage it meant flat-on-your-back dead. Defunct. Moribund. Inert. Inoperative. When your radio quit, or your engine stopped, or your lights went out, they were Tango Uniform.

  Airlines could go Tango Uniform. Like Braniff. Like Air Florida. Now they were speculating about, of all things, Pan Am! The old Imperial Airline. . . Tango Uniform.

  In the wake of the Great Strike and the loss of the Pacific, the specter of Tango Uniform preyed on the thoughts of the pilots. It made them want a less warlike way of conducting employee-management business.

  Jim Mac
Quarrie, the bellicose chairman of the pilots’ union, was replaced. Into his job came a union leader of a different stripe. Errol Johnstad was articulate, in his early forties, and possessed of an appetite for politics. Johnstad’s real skill was to stand in front of gatherings, as he had during the strike, and whip them into a bug-eyed, foot-stomping frenzy.

  Most pilots who held union jobs saw the work as a sort of civic duty, like serving on the town council. It gave them the feeling, however fleeting, that they had some control of their destinies. It was a tiny measure of real Skygodly power.

  And so it was with Johnstad, only more so. Beneath the smiling, conciliatory exterior, Johnstad was hungry for power. Real power. Running the union was okay, but that was small potatoes in his greater vision. From the union chairmanship at Pan Am, Johnstad saw himself ascending to the presidency of the national ALPA organization. Or, better yet, to an office in airline upper management. Even better, a vice presidency at Pan Am. Or even better. Johnstad aspired to be nothing less than a Maximum Skygod.

  He was a farm kid from Wisconsin who had earned scores of merit badges, become an Eagle Scout, been class president, done his hometown proud by graduating from the university, gone on to win his Air Force wings, then became a pilot for Pan American World Airways. Errol was the kind of kid that the folks back home invited to give speeches at the Kiwanis Club lunches.

  But being a Maximum Skygod, for Johnstad, involved more than honors and offices. Johnstad had a list that he liked to show his colleagues of feats that he intended to accomplish in his lifetime. Most of the feats were macho undertakings. For reasons not even he understood, Johnstad was driven to hang his carcass far out over the edge of the Great Abyss. To satisfy that compulsion, he took up sky diving. And he took a course in sports car racing. And he pursued sport aerobatics. And then he became obsessed with air racing. He went so far as to buy a Formula I race plane and in 1986 entered the national air races at Reno. To everyone’s astonishment except his own, he won.