Academic journal article Monthly Labor Review

Eastern Air Lines

Academic journal article Monthly Labor Review

Eastern Air Lines

Article excerpt

Eastern Air Lines

Difficulties continued at Eastern Air Lines, where a work stoppage threatened company efforts to reorganize under Chapter 11 of the Federal Bankruptcy Code.

In May, Eastern began efforts to sell its East Coast shuttle service, the only major unit profitable prior to the work stoppage which began on March 4. (See Monthly Labor Review, June 1989, p.40.) Initially, there were several bidders, but entrepreneur Donald Trump won after the bankruptcy court rejected the other offers.

In conjunction with the purchase, Trump signed labor contracts with the Air Line Pilots, Transport Workers, and Machinists unions, and 800 of the 1,000 jobs at the new carrier went to former Eastern employees. The new contracts were described as modified extensions of the unions' contracts with Eastern.

After the sale of the shuttle, Eastern said it still planned to sell off $1.5 billion of assets and reform into a smaller airline. The unions, facing the possibility of a sharp cut in jobs, acted to aid a prospective purchaser who promised to buy all of Eastern and not cut its size. However, this effort ended when the bankruptcy judge ruled that the purchase offer was inadequately financed.

Eastern then requested the court to end its contract with the Air Line Pilots and implement its last offer to the union. …

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