GROUNDED Frank Lorenzo and the Destruction of Eastern Airlines By Aaron Bernstein Simon and Schuster. 256 pp. $19.95
THE TIMING is perfect for a book on Frank Lorenzo. Eastern Airlines, in financial tatters, has been ripped from Lorenzo's control, placed in the hands of a bankruptcy trustee and may well disappear, the victim of a brutal union-management struggle.
The airline is now under criminal indictment for flying planes that were certified safe although the safety work had not been done, purportedly because its maintenance supervisors felt they were under pressure from Lorenzo's managers to get the fleet in the air, no matter what.
And Frank Lorenzo has just announced that he is getting out of the airline business, having struck a deal to sell his holdings in Continental Airlines -- another part of his kingdom -- for a price that will sicken many of Eastern's debt holders.
So who is this man who built an enormous airline holding company from pieces with names like Texas International, People Express, Frontier and New York Air, then managed to lose money during the greatest period of growth the airline industry has ever seen, and finally cut a deal in which he promises to stay out of the business for at least seven years?
With Lorenzo gone, will there be another airline entrepreneur who is willing to take chances that force the other carriers to cut fares? Frank Lorenzo, it could be argued, has provided the only downward pressure on the cost of airline tickets since deregulation got into full swing and it's not clear what the consumers will do without him.
Well, Aaron Bernstein tells us, Lorenzo is ruthless, a savage deal-cutter, a fanatical hater of unions, the devil incarnate.
But why? Why is he all these things? What is it about him that made him capable of uniting the Eastern unions -- who disliked each other almost as much as they hated Lorenzo -- to the point that they would develop the will and capacity to commit suicide rather than see Lorenzo succeed?
Why, in a book that purports to tell us about the death of Eastern, is Lorenzo so attacked while the union leader, Charlie Bryan, is simply dismissed as a tough partisan? Charlie Bryan, I submit, is as responsible for Eastern's demise as Frank Lorenzo, and is equally fascinating as an individual. Further, if Bryan had been able to see the forest for the trees, Lorenzo never would have had the opportunity to control Eastern.
Neither of these pivotal players is more than a caricature by the time Bernstein is through with what is, obviously, a quickie book. Nonetheless, Bernstein has covered these issues for years at Business Week, knows the players, and should be able to shed more insight on what makes them tick.
What Grounded provides is a recitation of dates, places and events. If you want to know when Lorenzo spun off Eastern's computer reservation system, it's right there and you can look it up. If you want to know why he did that -- other than Bernstein's central and probably irrefutable contention that Lorenzo seemed to relish in stripping Eastern of assets -- you'll have to wait for other scholarship.
Grounded covers the period between the fall of 1986, when Lorenzo acquired Eastern from the foundering Frank Borman regime, to the time the federal bankruptcy court in New York said "Enough," and stripped Lorenzo of control last April.
During that 3 1/2-year period things only got worse for Eastern. Lorenzo unquestionably dislikes unions and unquestionably set out to force down what he paid for labor. Because of his tactics at Continental, however, the laws had changed and he could not abrogate union contracts by going into bankruptcy. Therefore he had to negotiate, and Lorenzo's record of reaching accord with unions is wretched. That is the short version of why Lorenzo failed at Eastern.
The unions are the other half of the story. Bryan, the Eastern leader for the International Association of Machinists, continued to try to treat Lorenzo the way he had Borman, but Lorenzo wouldn't fold. Lorenzo could have broken Bryan, however, had he not so inflamed the pilots that they respected the machinists' picket lines. You can hire other mechanics, but pilots are tougher to come by.
The most telling anecdote in Bernstein's book comes early, during Frank Borman's failing effort to win concessions from labor that would save the airline from Lorenzo. Borman and Bryan are in their customary roles of fighting with each other.
"Borman pointed his finger at Bryan and snarled: 'I'm going to tell the world that you destroyed this airline.'
'I'll tell them you did, so where will that get us?' Bryan shot back."
That, in a nutshell, is what happened at Eastern. Douglas B. Feaver, Virginia editor of The Washington Post, covered Eastern Airlines and its labor problems in the mid-1980s.