Newspaper article THE JOURNAL RECORD

Reorganizing Eastern Focus of Frank Lorenzo

Newspaper article THE JOURNAL RECORD

Reorganizing Eastern Focus of Frank Lorenzo

Article excerpt

NEW YORK (AP) - Now that his $464 million deal with Peter V. Ueberroth has collapsed, Eastern Airlines boss Frank Lorenzo said Thursday he is turning his attention to his plan to reorganize Eastern as a much smaller airline.

``We've had our deal. We've looked at the sale alternatives,'' Lorenzo said in a speech at the University Club in Manhattan.

Under his new plan, strikebound Eastern ``will be a lot smaller,'' said Lorenzo, the chairman of Eastern's parent Texas Air Corp. However, he asserted, ``We are not going to have any difficulty over time building back.''

At a separate speaking engagement a few blocks away, Ueberroth said in response to a question on the Eastern situation, ``We're out of there, for sure.''

The former baseball commissioner said he had not been in touch with any of the parties involved, including Lorenzo, Texas Air and bankruptcy court officials. He would not try to get in touch with them and did not expect to hear from them, Ueberroth told a reporter after his speech on sports issues.

The statements by Ueberroth and Lorenzo came the day after they announced their deal had fallen apart, thwarting efforts to restore sickly Eastern to a full flying schedule.

The announcements Wednesday came after tumultuous negotiations between Ueberroth aides and Texas Air reached an impasse at federal bankruptcy court in Manhattan.

The judge overseeing the case moved immediately to attract other buyers.

``Our agreement with Texas Air is terminated, it's finished, it's over,'' Ueberroth told reporters.

The ex-baseball commissioner, who had described the Eastern deal as an historic opportunity for business-labor cooperation when it was announced April 6, said his investor group did not plan to make a new offer.

But Charles Bryan, head of Eastern's Machinists union, said in several television interviews Thursday he thought Ueberroth was still in the picture. ``Peter Ueberroth has said (it's over) a couple of times in the past during these negotiations.''

Bryan said Ueberroth ``could very well come back'' with another offer despite remarks to the contrary.

Ueberroth's dramatic entry as a bidder for Eastern and just-as-dramatic departure injected new uncertainty into prospects for an airline that has been largely idled and losing millions of dollars since its employees struck March 4.

His withdrawal doused hopes among many strikers Wednesday that a strong new leader had emerged to take control of an airline they claim has been butchered by Texas Air chairman Frank Lorenzo since he bought it three years ago. …

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