Remember Eastern Airlines? Labor had become so antagonistic towards a ruthless management they preferred the destruction of the company over solving problems! Has such an atmosphere developed among ONE of the Class I railroads?
I’m not sure about current practices but Florida East Coast in 1961 comes close.
The better question is there a class one where that attitude has not developed? I’d say no.
Not that any are in imminent danger of collapse. Nor is that attitude held by all employees, but it’s there among some. We’ll see if a more “enlightened” attitude by management (CSX comes to mind) actually developes and takes hold among the class ones.
Jeff
Eastern’s unions hated to solve problems?
Anyone who’s curious about that – try Grounded, a 1990 book by Aaron Bernstein. The remains of Eastern disappeared soon after he wrote the book.
Anecdotal story from a family member who worked for another airline at the time was that when Eddie Rickenbacker lost a battle with the pilots union before the jet age, he instructed the maintenance crews to remove the autopilots from the planes so they had to work for their extra money.
Guilford/ B&M…recent history
Sounds anecdotal to me but I will say this. Like most people born in the late 19th Century and who pulled themselves up by their own bootstraps Rickenbacker was tough. I’m old enough to remember the World War One generation and let me tell you, all the ones I met were tough. Good people and great grandparents but not ones to suffer fools gladly.
If you have not yet read THE GREATEST GENERATION by Tom Brokaw you should. I grew up just 7-8 years too young to have participated in WW II, but I knew many who did, and some who did not return. Their participation in the dynamic resurgence of this country between 1945 and the Vietnan War exemplifies what the USA can do when its population has the right attitude.
He might have been tough, but because he didn’t realize jets were the way of the future Eastern went astray, from being the most profitable airline to eventual death. Time passed him by.
Never heard EAL removing auto-pilots/ Now EAL did not order CV-440s with auto pilots. Other aircraft unknown.
EAL went under because of bank and management hi jinks. There is a famous story. In 1968 Floyd Hall CEO at that time had an all employees meeting in an auditorium in ATL. There was a Captain who got up and made a statement that was a good guess.
He stated EAL stock was trading around $32 / share. The stock was paying a certain dividend each quarter Captain stated that EAL had 50M shares authorized by SEC but only about 10M in hands of owners. Captain stated it was foolish to finance expansion by borrowing funds from bank to finance jet aircraft at rates over 15%. Interest due every month. This was height of Vietman and money was hard to get at lower rates.
Captain noted that selling any 10 million would raise $300M more than enough to raise needed funds for aircraft financing. He further noted if things turned sour that EAL could just stop paying dividends. Whereas banks would keep getting its interest payments.
Floyd Hall infamously stated that Captain did not have big picture. Well EAL in 18 months stock down to 3-1/4 and could not pay dividends, had to refinance some bank debt, and management crying the blues.
Flew EAL between Baltimore & Jacksonville on a number of occasions in the late 1980’s. EAL flights backed themselves away from boarding gates using their jet engines with reverse thrust enabled rather than have a driver operating a vehicle to push the plane back from the gate. I have no idea what the trade off was between extra jet fuel utilized for the move vs. the cost of the employee and vehicle to do the job was. Just know that most all the other carriers use the push vehicle.
Just to note, I knew plenty of the Greatest Generation. Know who they considered the Greatest Generation? The soldiers, sailors, Marines, and pioneer aviators of WW1.
Back in early 1978, I got a double dose of the tradeoffs between debt and equity financing. One dose came from the economic aspects of nuclear fuel cycles (fuel rods last three to five years and thus could not be expensed) and the other dose came from the financing chapter in Hiltons and Due’s book on Electric Interurbans.
In short, the advantage of debt financing is that the interest payments comes from pre-tax income, where dividend payments come from post tax income. In addition, the interest rate paid will often be less than the yield for stock. One last advantage is that using debt avoids diluting the stock and allows the existing shareholders to maintain control.
The big disadvantage of debt financing is that in a downturn, there may not be enough money to pay the interest due, which may prompt the bondholders to take action such as forcing the company to declare bankruptcy. Hilton and Due suggested that some of the interurba
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blue streak 1
Never heard EAL removing auto-pilots/ Now EAL did not order CV-440s with auto pilots. Other aircraft unknown.EAL went under because of bank and management hi jinks. There is a famous story. In 1968 Floyd Hall CEO at that time had an all employees meeting in an auditorium in ATL. There was a Captain who got up and made a statement that was a good guess.
He stated EAL stock was trading around $32 / share. The stock was paying a certain dividend each quarter Captain stated that EAL had 50M shares authorized by SEC but only about 10M in hands of owners. Captain stated it was foolish to finance expansion by borrowing funds from bank to finance jet aircraft at rates over 15%. Interest due every month. This was height of Vietman and money was hard to get at lower rates.
Captain noted that selling any 10 million would raise $300M more than enough to raise needed funds for aircraft financing. He further noted if things turned sour that EAL could just stop paying dividends. Whereas banks would keep getting its interest payments.
Floyd Hall infamously stated that Captain did not have big picture. Well EAL in 18 months stock down to 3-1/4 and could not pay dividends, had to refinance some bank debt, and management crying the blues.
Flew EAL between Baltimore & Jacksonville on a number of occasions in the late 1980’s. EAL flights backed themselves away from boarding gates using their jet engines with reverse thrust enabled rather than have a driver operating a vehicle to push the plane back from the gate. I have no idea what the trade off was between extra jet fuel utilized for
Correct. Northwest did it with their DC9s all the time. My brother was an FO on them.
I’ll bet his calculation was right, on paper. Getting a bunch of Electras probably made sense for Eastern in 1959, except it turned out passengers hate propellors.
Powerbacking was pretty common in the 80’s not sure if it was fuel economy or damaging engines or people with FOD that ended the practice.
Watched a C17 demo it at an airshow - no need to turn around.
The modern high-bipass turbofans don’t have the old “clamshell” style thrust reversers like the old “Diesel 9s” did.
Saw an AF prop plane back up with its props once. Apparently you can reverse pitch on them, too…
EAL backed both DC-9s and B-727s . A unanticipated effect was because FOD patrols worked to keep ramps clear total FOD damage went down.
EAL backed L-188s (Electras ) more than once.