Eastern Airlines Facing Bankruptcy :: essays research papers

east Airlines Facing BankruptcyIn 1986, Eastern Airlines was in desparate trouble. The fourthquarter of 1985 had shown a $67.4 million loss, and financially expertshad told impolite Borman, president and chief executive officer, that theairline had three choices 1) a 20 percentage pay cut for all union andnoncontract employees. 2) Filing for Chapter 11 (bankruptcy) or 3) Sellingthe airline. On February 23, 1986, Easterns bill of directors met to decidethe fate of the company. free-spoken Borman, quickly left his home in Coral Gables to Building 16at Miami International Airport that Sunday evening, to discuss plans on deliverthe airlines. The board of directors had deep-set for dinner followingafternoon session and was plan to convene at 730 p.m. At the earliermeeting, Wayne Yeoman, elderly vice president for finance, had spent most ofthe time outlining the details of Texas Airs plead to buy Eastern. FrankLorenzo and Frank Borman had been talking since December originally cl ose to consolidating the computerized reservation systems, then , asEasterns problems deepen, about a possible sale.As Frank entered his office, he found his his loyal excutive assistantWayne Yeoman and galosh Magurno, Easterns senior vice president for legalaffairs. For about 20 legal proceeding the three discussed the fourthcoming meetingand the prospects for saving the airline. Negotiations were going to comearound for ALPA and TWU just no break from the IAM. The IAM would not budgesince Charlie Byran, head of the machinists union, stood firm against a 20percent wage cut.At 730 the board meeting began with the discussion of the Texas Airoffer, concentrating on some of the conditions attached to the purchase of thecompany. More talk and hours dragged on. Finally word got out that ALPA wasnearing an agreement. The meeting recessed for an hour.During the recess Frank needed to get Charlies surport on the 20percent pay cut, otherwise the company was going to sold. He told Charlie tocome up to his office. Frank told Charlie, " weve been at this since 83 andyou commence to recognize it cant go on. I wipe out every reason to believe that thepilots and flight attendants are going to conk us what we need. I know its more(prenominal) difficult for you because your contract is not open. But I know youhave a sense of history. We have a very good opportunity to cure this airline,and if you just image this, in the long run youll come out a stronger,more admirable person. Choose the harder right instead of the easier wrong, and