Word: lorenzo
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Dates: during 1980-1989
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...True to Lorenzo's aim, Continental was again flying last week. Within 54 hours of filing petitions for reorganization under bankruptcy laws in Houston, it had re-established service to 25 of the 78 cities it had served. It fired all 12,000 employees and then invited 4,000 back at barely half their former wages. Senior Continental pilots who used to average $83,000 a year could return, but at salaries of $43,000. Flight attendants who had worked their way up to $35,700 were cut back to $15,000. Senior mechanics saw their wages shrink from...
Continental employees were livid at the bankruptcy and pay offers. Said one worker, recalling the airline's past brushes with economic disaster: "A lot of people gave their hearts and souls here for years. Now there is nothing but broken hearts." Complained Senior Flight Attendant Pearl Kelly: "Lorenzo is pulling us around like puppets...
...Lorenzo defended his strategy, saying that the airline's union contracts were "vestiges of another era." He added that the bankruptcy maneuver would create for Continental the "opportunity to compete in a very challenging and potentially rewarding marketplace." Lorenzo called the airline the "New Continental" and said it aimed to be the biggest discounter in the air. One company insider said the motive was solely survival: "We didn't want it to bleed to death like Braniff," referring to that carrier's slide into bankruptcy...
...striking the carrier. The pilots' strike could stop the New Continental from staying airborne, but there were signs that the airline might have enough pilots to keep flying despite the walkout. A Continental spokesman said only 350 pilots were needed to keep the down-scaled airline going. Declared Lorenzo after the pilots said they would strike: "Continental has more than enough pilots and flight attendants to sustain its operating level and increased service." He said that starting this week the airline actually would increase its domestic flights 20% by adding ten extra flights in eight major markets, restoring...
...their own routes to survival are closely watching Continental's bankruptcy and reorganization. Former Astronaut Frank Borman, 55, chairman of Eastern Air Lines, which is $2 billion in debt and lost $94.4 million in the first half of this year alone, has already said he might follow Lorenzo. Two days after Continental's ploy, Borman told Eastern's 37,500 employees that if they do not accept pay cuts of at least 15%, the company will be forced to either shut down à la Braniff or go into bankruptcy à la Continental. Eastern, one of the most...