Eastern: What Should Be Learned?

Steve Downs

WHEN THE STRIKE of ground crews, flight attendants and pilots at Eastern Airlines began on March 4, 1989, it was widely viewed within the labor movement as a decisive struggle that could reverse the tide of defeats and concessions and begin to move the labor movement forward again.

Lane Kirkland, president of the AFL, CIO, pledged the “maximum degree of support that is legally possible,” while Kim Moody of Labor Notes, who rarely agrees with Kirkland, wrote that this strike “could draw the line on the downward spiral of wages, benefits and conditions in this changing industry.”

Yet, by early October, the strike seems headed for defeat Frank Lorenzo, with the help of bankruptcy court, has accomplished much of what the workers struck to prevent While it has surely cost him much more than it would have if the workers hadn’t struck, Lorenzo seems poised to come out on top.

He has sold off major parts of Eastern, most importantly the Boston-New York-Washington shuttle. Pilots are returning to work in significant numbers. And the court seems inclined to give him all the time he needs to put a smaller Eastern back into the air.

For the workers at Eastern this outcome will mark a real tragedy, intensified by the fact that it could have been foreseen and probably avoided. The issues of organization, goals and broader program raised by the strike are not new, although they may have been to most of the strikers. But in order to have had a chance of winning, a radically different strategy from that followed by the Eastern unions was required.

Background to Confrontation

Over the last ten to fifteen years the airline industry has been shaped by two overriding factors: the overall decline in profitability in U.S. industry and the deregulation that was a response to it.*

By the mid-197 U.S. capital had found many ways to try to preserve profit rates layoffs, plant closings, reduction of tax rates, speed-up and, of course, the ever popular wage and benefit cuts. In addition, some leading corporations, organized and led by the Business Roundtable, sought to improve their profit rates by reducing the cost of some key services.

This effort to reduce costs, and thereby increase profits, was behind the deregulation of the transportation, communications and financial services Industries.

The initial increase in competition produced by deregulation brought with it increased downward pressure on the profits of the companies in those industries. This was compounded by the deep recession in 1980-81. The decline in business travel, the bread and butter of the airlines, that accompanied the recession cut into the revenues of the airlines just as they were experiencing the initial effects of deregulation. This led to an intensified effort, especially on the part of the employers in the transportation industry, to reduce labor costs. [See Kim Moody, An Injury to All (Verso 1988) chapter 6].

The 1980s were a time of widespread and ever-increasing demands for concessions in the airline industry. And the airlines usually got them. But the logic of the economic crisis was that some of the airlines wouldn’t make it—and concessions by the unions wouldn’t change this.

The increased competition of the early 1980s gave way to a period of concentration and centralization in the late ’80s as the weaker airlines either went out of business or were bought up by stronger ones. Peoples’ Express, the symbol of deregulation, Continental, Ozark, Republic, Frontier, PSA, Piedmont and, of course, Eastern were all bought by other carriers. Braniff declared bankruptcy twice in seven years. And Pan Am, once the symbol of U.S. dominance in commercial air travel, is on its last legs.

Within the framework set by these general structural changes there were two important factors that played themselves out at Eastern. The first was poor management led by Frank Borman. The second was a union that resisted concessions more than most in the industry did.

The Machinists union (IAM) at Eastern followed an aggressive program of research into Eastern’s finances and of membership education as the mechanics fought against Borman’s demands for concessions. For a while, when other unions throughout the industry and at Eastern were making concessions, they were able to preserve their contract But eventually they decided that they, too, had to make some concessions.

In exchange for wage cuts and work-rule changes the workers got a twenty-five percent stake in the company and some seats on the board of directors. Eventually, they also succeeded in forcing Borman out (See Andrew Banks, “IAM District 100 vs. Eastern and the Banks,” Labor Research Review 4, Winter, 1984.)

How little the directors’ seats were worth soon became evident A judge ruled that the “worker’ directors had to place the financial interests of individual workers ahead of their collective, or union, interests. He appointed trustees to those seats to replace the union officers. When the board voted on Lorenzo’s offer to buy, which the unions strongly opposed, the trustees representing the workers abstained.

Enter Frank Lorenzo

Frank Lorenzo has been one of the winners in the deregulation game. He used his control of a regional carrier, Texas Air, to buy up other carriers to build up a national airline. Continental, Frontier, People Express and Eastern were all taken over by Lorenzo. In doing so, he has combined aggressive expansion with equally aggressive labor-management techniques and union-busting.

Lorenzo’s purchase of Eastern was opposed by the unions, who proposed an employee ownership plan as an alternative. The unions feared that Lorenzo would do to Eastern what he had done to Continental: bust the unions, shrink the workforce and impose speed-up.

It soon became clear that there was a basis for these concerns, as Lorenzo began selling off assets (thus shrinking Eastern and weakening it financially) and preparing for a confrontation with the unions. By late 1988, the workers at Eastern, and their unions, had decided that they had to get rid of Lorenzo, otherwise Eastern would be sold off bit by bit, and eventually the company would either by shut down or merged into Continental. In either event their unions would be busted and most of their jobs lost.

The Strike

In early 1989 Eastern was, as usual, losing money. Lorenzo demanded $210 million in concessions. The unions’ position was that while they were willing to make sacrifices to save the airline, they did not believe that Lorenzo wanted it saved, so they wouldn’t consider any concessions as long as Lorenzo was in charge. When the strike began the unions principal demand was that Lorenzo sell Eastern. They wanted someone new to negotiate concessions with.

The unions were not prepared for a long strike. Their strategy was simple: they would threaten to picket other airlines and commuter railroads in the northeast (an action that is legal under the Railway Labor Act, which governs labor relations in the airline industry), thus forcing the federal government to step in and declare an emergency.

This would preserve the status quo that existed before the strike while an emergency board tried to work out an agreement. The recommendations of this board could, if necessary, be taken to Congress, which could impose a settlement. In other words, the workers would return to work under the terms of the old contract, a contract Lorenzo had said he couldn’t afford any longer.

The unions’ hope was that either Lorenzo would find the burden too great and sell the airline, or they could use their “influence with the Democratic Party to get a favorable settlement out of Congress.

Unfortunately, the unions were not the only ones who realized that federal intervention that preserved the terms of the old contract would hurt Lorenzo. The Bush Administration understood that too. Bush made it clear that, in the interest of preserving free collective bargaining he would not declare an emergency. But he would consider ways to force the rail workers to cross the airline workers’ picket lines, including amending the Railway Labor Act to make sympathy strikes illegal.

The unions, led by the IAM, decided not to force the issue. They never tried to shut down the commuter railroads. However, the foundation of their strategy had now been knocked out from under them and a new one was needed. The unions now decided that they would try to force Lorenzo into bankruptcy court.
Again, the unions hoped to prevail in one of two ways. First, they were going to argue that Texas Air and all of its subsidiaries (Eastern and Continental) should be treated as a ‘single carrier. This would place all of Texas Air’s assets within reach of Eastern’s creditors.

The unions hoped that rather than let that happen, Lorenzo would sell. Failing that, the unions would try to convince the bankruptcy judge that the strike could be ended and Eastern put back in the air only if Lorenzo were forced to sell. This involved convincing the judge that the creditors stood a better chance of getting their money if Eastern were flying, rather than being liquidated.

The unions were partially successful. They forced Eastern into bankruptcy. This restricted Lorenzo’s freedom of maneuver. But they did not win on the “single carrier’ issue nor have they been able to get the bankruptcy judge to force Lorenzo out In fact, the judge has acted as if he thought only Lorenzo could get Eastern back into the air.

So within a span of two weeks, a strike that began with much militant talk and the threat of chaos on the northeast rail corridor found itself enmeshed in the byzantine world of bankruptcy court with all the unions’ efforts revolving around the maneuvering in the courtroom.

Clearly, once they struck, the unions couldn’t have kept Eastern out of bankruptcy even if they had wanted to do so. And it was certainly useful to have Lorenzo’s hands tied even to a limited extent. However, what went on in the courtroom should not have determined the rest of the unions’ tactics; the court should have been kept as a sideshow, instead of occupying the center ring.

Meanwhile, Back on the Line

One thing that was evident to all observers was the unusual unity among the Eastern workers. The pilots, who were crucial to the success of the strike, and who have a traditions of crossing lines when other unions strike, were not only honoring lines but seemed as corn-milled to the goal of getting rid of Lorenzo as the machinists and flight attendants.

For the first month or so the strikers maintained spirited picket lines. Among the strikers there was a lot of energy that could have been put to good use. Unfortunately, that’s not what the union leaders had in mind.

Once bankruptcy court had become the focus of the strike the activity of the strikers was shaped by the limitations inherent in the unions’ legalism. The unions’ leadership sought to keep picketing within narrow and ritualistic limits so as not to alienate the judge. In this, their efforts converged with those of management, which got an injunction limiting picketing at a number of airports.

At the Eastern shuttle at LaGuardia Airport, pickets were separated from the terminal by four lanes of traffic. The focus of their activity became not keeping Eastern’s planes grounded but discouraging passengers from flying.

There are a number of problems with dependence on a consumer boycott in this situation. The first has to do with the likelihood of success. After the first few days the passengers knew there was a strike. If they had gone to the trouble of getting to the airport and coming to Eastern’s terminal, they had probably already decided to go inside and not support the strike and boycott.

In addition, most air travelers, especially on the shuttle, are traveling on business. By and large these are not people who will be disposed toward supporting the workers in a strike. Obviously, many of these travelers switched to Pan Am’s shuttle for the sake of convenience, but, again, those who had come to Eastern’s terminal were likely to go in.

The second problem with such a strategy is its effect on the strikers. Yelling at passengers who ignore you, or worse, who make a show of crossing the picket line, becomes demoralizing. This in turn leads many pickets to direct their hostility toward the passengers, rather than toward management.

Some people lost sight of the fact that the key was keeping Lorenzo and his planes grounded. If Lorenzo couldn’t get any planes in the air it didn’t matter how many would-be passengers entered the terminal; if he got planes into the air there would always be people who will pay to fly in them.

Could the strike have been conducted differently? Yes. Would it have made any difference in the outcome? Maybe. There are two key dimensions of the strike that would have had to be approached differently in order to have had a chance of success.

The first is the question of concessions. It must be remembered that the Eastern strike was never a strike against concessions. It was a strike over who should be given concessions. This may have seemed to the union leaderships a “reasonable position, but it undermined the strength and appeal of the strike. It also obscured what it would take to preserve the jobs of the workers at Eastern Airline.

The machinists, flight attendants and pilots at Eastern had already made substantial concessions. But these had not achieved their supposed goal of making Eastern profitable and preserving jobs. Instead, the granting of concessions just weakened the unions and made it more difficult for them to resist further concessions. And management, whether led by Borman or Lorenzo, kept coming back for more.

This is because Eastern’s problems were not simply the result of poor management or disinvestment Eastern’s problems, as discussed above, were rooted in the broader shifts in the economy, the general decline in profitability and its fallout, deregulation and heightened competition. By failing to recognize this and to base their strategy on this recognition, the union leaderships reduced their chances of success.
The starting point for the unions should have been the defense of the jobs, wages and benefits of the workers, regardless of who owned the company. The logic of not taking this position became painfully clear in the course of the strike.

Sacrifice for What?

By not firmly rejecting concessions, the unions made it more difficult to generate enthusiasm for the strike among those union activists who are increasingly coming to the conclusion that the starting point for the rebuilding of the labor movement has to be ‘No Concessions!’ Then, the strikers found themselves in the bizarre position of asking one union-buster, Carl Icahn, to save them from another.

Finally, the unions had to offer more and more concessions to interest potential buyers and to convince the bankruptcy judge that proposed purchases were ‘viable.’ Eventually they were offering concessions worth twice what Lorenzo had been demanding.

The result of this was that strikers became demoralized as the point of the hardship they were suffering became less clear. In addition, the unions’ hand in negotiations with Lorenzo and the judge was seriously weakened. They couldn’t successfully argue that Lorenzo’s demands were unreasonable when they were prepared to give up much more to someone else.

Second, to have had a chance of winning, the organization of the strike itself would have had to be very different. There should have been a much greater reliance on the activity of the strikers and their supporters, rather than the lawyers in bankruptcy court.

For example, a serious effort should have been made to shut down Continental. Since Continental’s workforce is largely nonunion, such an effort would have required picketing to halt deliveries (fuel, food, spare parts, etc.) to Continental. The thousands of Eastern workers idled by the strike could have been recruited as volunteer organizers for a unionization drive at Continental.

Lorenzo would, of course, get injunctions against the picketing of deliveries. The workers would then have to decide whether to back down or to challenge the injunctions, not just in the courts, but on the picket lines as well. Mass picketing using family member support, civil disobedience, blocking entrances and dozens of other tactics that the people who know the airports best could think up, would be ways to keep the pressure on Lorenzo and mobilize support for the strikers.

There are risks to such a course of action. There is a risk of legal penalties. And such actions would probably cost the strikers the support of the leadership of the AFL-CIO. After all, Kirkland left himself an out when he promised the ‘maximum degree of support that is legally possible” (emphasis added).

But that’s probably a risk worth taking. The strikers at Hormel a few years ago, in the face of intense opposition by their international union and the AFL-CIO, not to mention their boss and the courts, raised as much money for their strike fund as the AFL-CIO has for the Eastern strikers. So much for the “maximum degree of support!”

The point is not that militancy is risk-free, but that not to take these chances, not to mobilize the maximum pressure against Lorenzo and the court, is almost to guarantee being win-free.

The effective organization of mass picketing and other solidarity actions would have been greatly facilitated by building broad strike committees open to all airport workers.

Organizing such committees would have increased the number of activists with knowledge of the airlines and who could gather information and work to find ways to spread the impact of the strike. It would help to develop the view that all airport workers have a stake in the outcome of the strike. It would build a basis for greater solidarity in the future. And it would begin to demonstrate the advantages of industrial unionism over the craft-type organization imposed by the Railway Labor Act.

The need to overcome these barriers was made clear by an incident early in the strike. Mechanics at Pan Am, represented by the same union as Eastern’s flight attendants (the Transport Workers Union), were performing maintenance work on engines for Continental.

A local officer who expressed the opinion that this was improper was relieved of her duties and charged with “dual unionism,” that is, being an agent of the IAM! (See Any Pollack’s accompanying article for an in-depth discussion of airline unionism.)

Why Private Ownership?

Beyond the issue of how this particular strike might have been organized is the question of how to address the problems of the industry with the best interests of the workers in mind. There are a few aspects of the Eastern strike that, at least implicitly, point toward such a broader program. The most obvious one was contained in the demand that Lorenzo be replaced.

The idea that workers would strike over who their boss would be—not just an immediate supervisor, but the owner of the company—has far-reaching implications. One of the main characteristics that distinguish labor under capitalism is “free labor.” In theory at least, if workers are dissatisfied with their working conditions, they are free to change jobs, to work for someone else.

What the strikers at Eastern said was that, although they were dissatisfied with the conditions at Eastern, they were staying and the boss had to go. To achieve this, the strikers had to make the case that their years of service and the sacrifices they had already made, gave them a greater stake in the company and its future than Lorenzo’s money gave him.

They had to argue that they, not Lorenzo who wanted to make a quick buck by milking the company, were the ones who were committed to the company, the passengers and the communities Eastern served. This is a critical point because it raises the contradiction between production for exchange and production for use; between the interests of profit and the interests of service, jobs and safety.

Unfortunately, the strikers did not develop these points into an alternative approach to the organization of the industry. While implicitly challenging many of the traditional prerogatives that accompany private ownership, the strikers did not offer an alternative to it This has much more to do with the conservatism and timidity of the U.S. labor movement than it does with any failing on the part of the Eastern strikers.

For example, the strikers sought to force Lorenzo to sell so that he would be replaced by another individual or small group, who would own the company and exercise all of the “rights” that go with ownership. But there are alternatives to private ownership.

The labor movement of almost any other capitalist country would have at least considered raising a demand for nationalization And some would have argued for workers’ control But these aren’t even apart of the vocabulary of the U.S. labor movement.

The idea that the government should take over responsibility for running an airline, or even the entire air transportation industry, is not so far-fetched. It’s done in many, if not most, countries. There are even precedents for it in this country. Amtrak and Conrail are both the result of the U.S. government stepping in to maintain freight and passenger rail service when private companies could or would not.

In New York, the city and state recognized the importance of New York City’s subway system to the economy of the region, so they took over (bought) the assets of two bankrupt private transit companies and created a public authority to run them.

The same could be done with one, or better yet, several airline companies. Transportation is one area of the economy where it is already acknowledged that the public interest is not always best served by private providers.

However, even if the government were to take over Eastern’s assets it would not solve all of the workers’ problems. They would still be under pressure to be “productive,” to compete with the workers at other airlines. This is where workers’ control comes in.

The workers and their allies would have to develop ways to ensure that management’s decisions placed the needs of the workers and the communities they serve ahead of questions of profit and loss. They would have to fight for a system of checks and vetoes over management, from the boardroom on down, of this now-nationalized company. Only in that way could they see to it that increases in productivity went to improve service, not to cut jobs, and that safety concerns always came ahead of meeting schedules.

Any proposal of this nature obviously flies in the face of the U.S. government’s preference for privatization in transportation. That’s not really an argument against these types of demands. It’s just further proof, as if any were needed, that workers and bosses have different interests.

Capitalists, however, seem to have a clearer idea of what their collective interests are and how to achieve them than do workers or their unions. It’s past time that we developed a program that recognizes the fact of the overall decline in profit rates and addresses its implications for working people.

Within the airline industry, and others as well, demands for nationalization and workers’ control will be a part of that program. One strike cannot accomplish all this. But the Eastern strike clearly highlights the need to raise these issues within the labor movement and the working-class at large so that we can begin to build a movement that can place a working-class alternative to capitalism’s solutions to its own crisis squarely on the political agenda.

While some of these issues may have been new to the Eastern strikers, the working class as a whole has been confronted with these same questions time and again. We have lost too many strikes because too little was learned from the experience of others. Too many struggles have been in vain because of the failure of the labor leaders to advance an appropriate strategy.

Sometimes this is due to corruption or cowardice, but more often it is a consequence of the union bureaucracy’s acceptance of the sanctity of profits.

This failure of leadership is compounded when the rank and file is unable to go beyond what the leadership offers. As a result, the real political weight of the working class in this country is negligible because we have failed to fight for proposals for jobs, housing and social services that break with the notion that profits come first.

Neither one strike nor one article will change all this. But the Eastern strike will not be the last that poses the questions of militant action and rank-and-file initiative. And this is not the last time labor will be confronted with the need to develop solutions to the problems of an industry and workers pounded by falling profits. This strike could help a few of us avoid starting from scratch next time.

*See “The Current Capitalist Crisis: Causes and Implications” by Anwar Shaikh (Against the Current, 1989) for an analysis of the underlying trend.

November-December 1989, ATC 23

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