Borman Resigns as Chairman, CEO of Eastern Airlines

MIAMI —  Frank Borman, the sober-faced former astronaut who has piloted Eastern Airlines for the past 11 years, on Monday announced his resignation.

“I like the business. I love the people. I leave in peace,” he wistfully told reporters.

But he will not be leaving entirely. On July 1, his final day as Eastern’s chairman and chief executive, he will assume the title of vice chairman of the board of Texas Air Corp., the holding company that has agreed to take over Miami-based Eastern for $674 million.

That buyout is awaiting federal approval. If it goes through, it will rescue Eastern from the bankruptcy that it faced last February when Texas Air Chairman Francisco A. (Frank) Lorenzo made a surprise bid.

New Role Unclear

Since then, there has been speculation that the 58-year-old Borman would never move into the co-pilot’s seat after the flashier Lorenzo took over. But Borman said Monday: “I’ve grown to admire (Lorenzo), and I think we’ll work well together.”

It is not clear what Borman’s new role with Texas Air will be, though he said he hopes to contribute something “in policy and in performance.”

In any case, it will be nothing full time. Texas Air is based in Houston, and Borman and his wife Susan are moving to Las Cruces, N.M., where their son Fred owns a car dealership. Borman said he will consider business opportunities as well as appointive positions in government.

The man who once quoted from the Book of Genesis to the nation from a space capsule orbiting the moon on Christmas Eve, 1968, also plans to write his memoirs. Several publishers have approached him, he said.

Borman’s decision to resign was first announced Sunday night at a private dinner among friends. Then, on Monday, he called a news conference that quickly became the post-mortem of his career at Eastern.

“I think the American labor movement in general doesn’t understand they’re part of the competitive picture,” he said. “They remind me of people who keep denying reality.”

Eastern has lost $415 million in the past six years. Borman blamed those losses on union contracts that kept the airline’s costs far above those of newer carriers in the deregulated marketplace.

He said his greatest regret was that the company did not have the resources to resist a strike by its machinists during a 1983 contract dispute and had to yield to the union’s demands. “I couldn’t convince the labor leaders that the numbers had changed,” he said.

Borman’s departure ends a compelling chapter in an American success story, for if the early astronauts each possessed a winner’s spirit, Borman seemed virtually overstuffed with the right stuff.

He was a high school football star who quarterbacked his team to the Arizona state championship. He was an Air Force test pilot welcomed into the infant space program as an expert in fluid mechanics. He was an astronaut who circled the moon in Apollo 8. He was a hero in a business suit who, for a time, breathed life into an airline awash in red ink.

To Eastern’s employees, he also was something of a father figure. They called him Colonel, and they rubbed shoulders with him as he walked around the Miami terminal, sometimes working alongside skycaps at curbside.

“He kind of preceded all the ‘excellence’ books,” said Russell L. Ray Jr., once one of Borman’s key advisers and now president of Pacific Southwest Airlines. “He practiced hands-on management, very visible, popular with employees.”

Changing Image

But his popularity has faded in recent years. Borman time and again asked employees to accept wage cuts, and, lately, they came to believe that their beloved Colonel had become an ogre with his hand in their pockets.

“He marketed a very paternal image with all the employees,” said Robert Callahan, head of Eastern’s flight attendants’ union. “But in the final three years, it all became adversarial.”

Chief among Borman’s adversaries was the machinists union. In 1983, when the pilots and the flight attendants unions were willing to keep flying, the machinists stared Borman down.

That defeat was pivotal, Ray said: “I think Frank had a softness for wanting to be the popular leader he was in the ‘70s. He waffled because of his feelings of wanting to be the father figure.”

On Monday, Charles Bryan--head of Eastern’s machinists union and just as tough as the Colonel--spoke of Borman’s resignation without a tinge of regret. “At this point, I don’t see any relevance to whether he is there or not any longer,” he said.

On July 23, Eastern’s board of directors will hold a party in Borman’s honor at the swank 21 Club in New York. Each member has been asked to give $300 toward a gift.

But the money won’t buy the Colonel the memento that he truly wants, said one board member who requested anonymity:

“He’d really like Charlie Bryan’s scalp.”