By Scott Hamilton

Sept. 10, 2024, © Leeham News: Thursday is the day the touch-labor union at Boeing, the IAM 751, will vote on a new contract. The militant union is loaded for bear. Members are voting on a new contract for the first time in more than a decade, and the first entirely refreshed contract in nearly two decades.

They want big raises, saying theirs have stagnated since the 2008 contract and two subsequent revisions in 2011 and 2014. The IAM wants a 40% wage hike over a three-year contract. Recapture of benefits concessions also are being sought. A guarantee that the next Boeing airplane will be built in Puget Sound, a seat on the Board of Directors, and a role in fixing Boeing’s safety culture are all on the table.

The IAM 751 advised its members to start saving for a strike fund as far back as 2019. Training has been underway for weeks for picketing. Members held a rally with 25,000 attendees; 99% voted in favor of a strike if an acceptable contract wasn’t reached.

Frank Lorenzo, left, and Donald Trump, during the former’s courtship to entice Trump to buy the famed Eastern Shuttle. Source: Frank Lorenzo.

Against this backdrop, it is somehow fitting that the memoirs of one of labor’s most reviled enemies comes out today: Frank Lorenzo’s Flying With Peanuts is now available via Amazon, Barnes and Noble, and elsewhere. Subtitled Tough Deals, Steep Bargains and Revolution in the Skies, Lorenzo for the first time details his life and his career from his immigrant Spanish parents through the highly controversial career owning Texas International Airlines, Continental Airlines, Eastern Airlines, and purchasing the original Frontier Airlines, PeoplExpress and several commuter carriers; and launching non-union New York Air in one of America’s most unionized cities.

Untold stories

Along the way, he battled the Air Line Pilots Assn., the IAM (a different District than Boeing’s IAM) and other unions. He became the scourge and, by some descriptions, the most hated man in America. Fortune Magazine one year named him America’s toughest boss, beating out Bob Crandall, the CEO of American Airlines, whose toughness was legendary.

Lorenzo has been the subject of many books chronicling his battles with unions. These books were largely written by reporters and authors sympathetic to labor and, understandably, Lorenzo didn’t participate. Now, at age 84, Lorenzo is telling his story.

I covered Lorenzo and Continental Airlines during much of the tumultuous 1980s as an aviation reporter. I never met him and never interviewed him. But as Lorenzo wrote his book, a collaborating writer died. John Leahy, whom I have known for more than 30 years and wrote about in Air Wars, The Global Combat Between Airbus and Boeing, recommended to both of us that I collaborate to help Lorenzo finish his book. I worked with Lorenzo for 18 months to finish Peanuts. Thus, I’m not in a position to provide a disinterested review.

Instead, I’ll say that I learned stories I did not know about Frank Lorenzo, the boy, the college student, and his early professional career. Lorenzo writes about how the Spanish immigrants who eventually married and became his parents arrived from Spain not speaking English and who became entrepreneurs.

Humanizing tales

Frank writes about his siblings, including the traumatic loss of his older brother at a relatively young age to a heart attack. He tells the stories of the birth of his children and of the time his family and his company thought he died in the crash of an Eastern Airlines plane he was scheduled to be on (he had switched flights at the last minute). He writes about the personal agony he felt when two airline executives he knew, Robert Peach and Al Feldman, committed suicide when they realized they had lost their airlines. Peach, the founder of Mohawk Airlines, saw his carrier collapse under the weight of an ALPA strike. Allegheny Airlines, his bitter rival, acquired Mohawk. (Allegheny later rebranded as US Air, then US Airways and finally merged into today’s American Airlines.)

Feldman was the CEO of Continental Airlines. He negotiated a merger with Western Airlines when Lorenzo, at the suggestion of a Continental Board of Directors member, made a tender offer to buy Continental. The unions, long since aligned to battle Lorenzo at every turn, worked with Feldman to block Loreno’s hostile offer. When it became clear Lorenzo was going to win, Feldman—who earlier had lost his wife to cancer—shot himself in Continental’s headquarters. Lorenzo was blamed by many for Feldman’s death, but Lorenzo writes how he was devasted and nearly called off the battle he had just won.

Labor’s enmity

Lorenzo’s enemies won’t accept Frank’s story, of course, any more than they will greet his book with anything but derision. Yet Lorenzo understood the changes that were facing the airline industry with deregulation of 1978 better than most. Southwest Airlines CEO Lamar Muse vowed to put Texas International out of business, and deregulation would have been the enabler. Growing and cutting costs was the only way. He started cutting costs at Texas International, forever arousing the enmity of the unions in the process.

Ironically, although Lorenzo became the mortal enemy of ALPA, the pilots’ union, he wasn’t the first one to hire replacement pilots (or scabs in union-speak) when he put Continental into bankruptcy to cut costs. Southern Airways, a regional airline like Texas International, did this before Lorenzo—and, as noted, Mohawk collapsed due to a long ALPA strike.

Trump and the Eastern Shuttle

Lorenzo finally left the airline industry in 1990, though he continued to dabble on the sides long after. But there is a connection to today’s history. After buying Eastern Airlines and fighting a losing battle against ALPA and the IAM local chapter, Lorenzo was forced to sell Eastern’s famed Shuttle to raise cash. He didn’t want to sell it to rivals American or United. Tiny America West Airlines, based in Phoenix, expressed interest. But its ability to finance the purchase was doubtful.

Instead, Lorenzo set his sights on a wealthy real estate investor whose ego made him an easy target: Donald J. Trump.

Lorenzo devotes a long chapter to how he picked Trump as the best target to buy, and overpay for, the Shuttle. He played to Trump’s ego and manipulated him into taking four tired, old Boeing 727s when Trump wanted to renegotiate the price, rather than lowering the cash payment so desperately needed.

Trump renamed Eastern’s prized asset the Trump Shuttle and spent (and wasted) millions of dollars refurbishing the interiors with gold trimmings passengers don’t care about. The airline failed, like so many of Trump’s other businesses. Lorenzo’s manipulation of Trump is an entertaining read.

A good history

Flying for Peanuts is a good history from a perspective that hasn’t been told before. Even had I not been associated with final collaboration, I’d buy this book as one who has purchased scores of them over the decades.