Paradise tossed; how a chance to save American capitalism was sabotaged at Eastern - Eastern Airlines

Washington Monthly, June, 1986 by Alex Gibney

More significant than the transfer of power at the top of the organization was the shift at the bottom. "We were suddenly able to influence what items we might buy, what materials we might use, how jobs should be done,' said Bryan. "It was a process that completely changed the culture of the top-down management. It was truly a lateral movement of authority and responsibility, so that everyone was working together. And that was the term we adopted--"working together.''.

Though forced into the agreement, Borman quickly seemed to become committed to its principles. "Many of the other business executives that I've talked to told me flat out that they would rather have shut the company down than make the accomodation with the unions that we've made,' he recalled later. "But I really believe that it was the right way to go.' In a bold public relations move, coordinated with the unions, Borman appeared in a new Eastern commercial surrounded by pilots, mechanics, flight attendants and ticket takers. "Who can serve you better,' asked Borman, "than the owners.' He approved spending more than $1 million to train every manager how to listen to employees instead of telling them what to do--not an easy task considering managers had previously been rewarded for their authoritarianism. In fact, six months after the agreement was signed, four of Eastern's senior vice presidents, uncomfortable with the new atmosphere, left the company.

Together, the unions and management installed an employee involvement program. "Action teams' of workers and managers met to solve job-related problems. Slowly, workers who had felt disenfranchised began to believe they had both a financial stake and a say in the way the company was run. "Two years ago I wanted to quit Eastern Airlines,' said Logan Airport ramp service man Al Marescalchi. "Now when I come to work it's like coming to work in my own shop. Eastern Airlines is mine.'

While Eastern's management was busy learning how to listen to its workers, the IAM was teaching its members the language of business management. The union trained its members how to read budgets, purchasing forms, and vendor contracts to they could ferret out ways to save money. Going far beyond suggestion boxes or the love-your-company participation plans of the Japanese, Eastern tapped into the entrepreneurial traditions of American culture. Every person in the company was to use his or her ingenuity to figure out better ways to do things. Eastern's president Joe Leonard gushed with enthusiasm while the program was in full-swing: "Instead of using the ideas of a few managers, we're tapping the potential of 40,000 brains.'

One of the most capable machinist "brains' was John "Buddy' Sugg, a raspy-voiced veteran of the union/management wars, who headed up both the "contracting-in committee,' which helped bring repair work back in-house and the "Efficiency Credit Teams,' which sought ways to increase productivity and cut purchasings costs. When asked about the cost savings, Sugg likes to hold up a small plastic filter. "This goes in the engine of an aircraft,' says Sugg. "We used to pay $20 for every filter. One of our guys found that he could buy these things in Connecticut for 2 1/2 cents. That's a savings of $7,000 a year right there. And that's just the top of the barrel.'