- Aug 20, 2002
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Listed below is an article that was e-mailed to me from the Jet Piedmont website. I know some people will be interested in reading this.
Memories assuage the pain of losing our beloved airline
By Richard Craver
JOURNAL REPORTER
Robert Reed: Staff vice president, Stations; curator, Piedmont Aviation Historical Society. (Journal photo by David Rolfe)Dreams die hard in Winston-Salem.
Just ask former employees of Piedmont Aviation Inc., the homegrown airline that prided itself on gracious service, operational efficiency and devoted workers.
Twenty years ago, the Piedmont era ended when USAir Group Inc. bought the company for $1.6 billion.
The unpopular merger, completed on Nov. 5, 1987, eventually stripped away 5,100 local jobs and most of the airline's operations. But more than that, it marked a turning point for the city's sense of self.
No longer, it seemed, could a successful local company, built on hard work and innovation, be assured of survival. For some, it seemed that despite its best efforts Winston-Salem could no longer shape its own destiny.
In Piedmont's case, time has not eased the bitter loss of what was and what could have been.
"It still tugs at my guts, and brings a tear to my eyes," said Steve Lyons, a former Piedmont employee who still chats to old colleagues on www.jetpiedmont.com - a Web site dedicated to the airline's history. "And I can't stop going back in memory either," he said. "Some may not understand, if they have never had a career and not just a job, but we were a very close-knit company. That's why it hurt so bad to see them sell her out."
Piedmont drew inspiration from the swashbuckling reputation and innovations of Tom Davis, a founder, chairman and chief executive who took the time to learn employees' names.
Davis piloted an airline that grew from a puddle-jumping local carrier in 1948 to one with hundreds of daily flights from about 100 airports. At its peak, Piedmont employed 24,000 people nationwide.
Analysts said that Piedmont operated lean without being mean to customers or employees. Workers instinctively pitched in wherever needed to keep the flight schedule on time. As a result, Piedmont had an 85 percent on-time arrival rate.
"It's been said that R.J. Reynolds put Winston-Salem on the map, but Tom Davis made it easy for people to get here," the Journal said in reporting on Davis' death in April 1999.
Growing, however, required capital, which Piedmont received in December 1981 when Norfolk and Western Railway, now Norfolk Southern Corp., bought 20 percent of the airline's stock and became its largest shareholder.
The infusion of capital enabled Piedmont to open hubs in Charlotte; Dayton, Ohio; Baltimore;and Syracuse, N.Y.; and to buy two airlines, begin a Florida shuttle service, and fly its first trans-Atlantic route.
Norfolk Southern liked Piedmont's performance so much that when it became eligible to buy a bigger stake in the airline in January 1987, it made an offer of $65 a share in cash for the entire company.
USAir, now known as US Airways, realized that Piedmont would become a stronger East Coast rival with Norfolk Southern behind it, and made a counteroffer to Piedmont's board. Gordon Bethune, a senior vice president of operations for Piedmont, said Norfolk Southern's board decided that it would rather be "a seller at $69 than a buyer at $65."
Bethune left Piedmont shortly after the deal was announced. He is widely credited for resurrecting twice-bankrupt Continental Airlines Inc. as its chief executive in the mid-1990s by emphasizing employee loyalty, consistent flights and fares, and abandoning operations that bled limited resources.
"Once the management made it known that Piedmont was for sale, the board had a fiduciary duty to listen to all offers and be neutral in their decision making," Bethune said. "If it had not been, there would have been scores of lawsuits from institutional shareholders wanting their $4 a share."
Bethune said he faults Piedmont's management for "having an opportunity to do something great with the airline and screwing it up" by not establishing an ironclad commitment from Norfolk Southern. As much as Ross Johnson, the former chief executive of RJR Nabisco, was vilified for his comment about this "bucolic" community, coming in a close second was Ed Colodny, the chief executive of USAir.
For many former executives and employees, Colodny was the symbol of USAir's disdain for Piedmont's culture and work ethic. He was the architect of treating a customer as just an occupied seat.
"You couldn't have found a dumber management in the industry than USAir, and they proceeded to ruin Piedmont," Bethune said.
Losing the identity of the airline was tough, Bill Howard, the chief executive of Piedmont, told the Winston-Salem Journal in April 1999. "We hated it," he said. "Nobody was in favor of the merger. The employees cried when it happened. But we were rewarded very handsomely."
It didn't take long for the stark difference in the USAir and Piedmont cultures to stand out.
In the short term, some rank-and-file Piedmont employees received raises because of the greater union presence at USAir. But many had to move to operations elsewhere to keep their jobs, and others were demoted to lesser duties.
Despite USAir's pledges of "labor protective provisions" when the deal was made in March 1987, Piedmont's local work force of 5,600 was whittled over time to a low of 485 in October 2005. Only four of the top 40 officials, some jumping to other airlines, were left when the merger was complete in August 1989.
Eventually, Piedmont's local headquarters was closed, Smith Reynolds Airport lost its main tenant and the airline's operations were shuttered except for a reservation center off Hanes Mall Boulevard.
The local work force returned to about 800 this year as US Airways' new management brought back reservations jobs that had been transferred offshore. US Airways declined to comment for this article, saying that since America West Holdings Corp. bought the airline in September 2005, current management had nothing to do with the deal.
Former Piedmont employees said that the airline's promise was dashed by a USAir management team obsessed with replacing Piedmont's Southern hospitality with a cold fixation on costs. The strategy backfired - over the years the airline went bankrupt twice.
Piedmont "absolutely had the chance to be another Southwest Airlines," said Michael Boyd, the president of The Boyd Group Inc., an aviation-consulting company in Evergreen, Colo. "Piedmont was innovative, focused on customer service and had a strong presence in the South.
"The USAir deal proved to be bad for everyone - the airline, the employees and the flying public."
Feeding the nostalgia about Piedmont is the Piedmont Aviation Historical Society, the www.jetpiedmont.com Web site and a book The Flight of the Pacemaker, which covers Piedmont's history through the purchase. There are flight re-enactments and frequent gatherings of former employees in many of the destinations that Piedmont served.
"I think we actually intimidated USAir officials because we knew how to run an airline better than they did," said Robert Reed, a vice president of stations at one time and now the curator of the historical society.
"They responded by trying to eradicate the best of what Piedmont had to offer rather than preserving the best of what they had bought. They didn't want any reminders of Piedmont left around," including the bird logo, uniforms, stationary and blueprints. Some memorabilia had to be rescued from trash bins by legacy Piedmont workers, said Cherryl Hartman, the president of the historical society.
Ted Kaplan, a state legislator in 1987 and now a Forsyth County commissioner, said that "there was just a comfort with Piedmont. You weren't just flying with a pilot and attendants, but your neighbors."
Jim Sifford, one of Piedmont's top officials in its pilot operations, said that there was "a down home feel about this airline, right down to the Cheerwine and the barbecue we served on flights. We feel we played a major role in the Charlotte economy becoming what it is today by opening the hub there (in May 1982) and giving the city its first international flight."
Part of the Piedmont mystique is that many former employees are convinced that it could have thrived independently in a deregulated industry that sent many legacy airlines into bankruptcy. Morten Beyer, an aviation consultant in Arlington, Va., said that Piedmont could have bought another airline or two "to take on enough debt to make its share price too overpriced to swallow."
But Bethune said that it was unlikely Piedmont would have remained independent. "If Piedmont's management hadn't agreed to the USAir deal, it likely could have made another piss-poor deal," he said.
Another part of the mystique is that people believe that Winston-Salem would have found a way to thwart the gravitational pull of the Charlotte hub from taking the headquarters there. "We were not growing the airline operations in Winston-Salem, and Charlotte was becoming a bustling city with a new international flight," Bethune said. "But then again, a headquarters can be had anywhere."
Piedmont was a key player among a handful of large, paternalistic corporations that had dominated Winston-Salem's economy for decades. Others included Hanes Corp., McLean Trucking Co., R.J. Reynolds Tobacco Co., Western Electric and Wachovia Corp.
But by the late 1970s, corporate America, spurred by the deregulation of key industries in the region and the siren call of diversification, had punctured the local economic bubble with buyout offers that were too good to refuse.
The repercussions eventually cut deeply across blue- and white-collar lines. Hanes and, much later, Wachovia were sold to larger competitors. McLean went bankrupt with 10,000 jobs eliminated. About 3,300 jobs were cut with the closing of AT&T's plant (former Western Electric) on Old Lexington Road. RJR Nabisco shook the city when it moved its headquarters to Atlanta in January 1987 and the bidding war for Reynolds in 1988 cost more than 2,000 local jobs.
"The Triad has evolved from a somewhat protected economy based on tobacco, textiles and furniture to an open economy that is still finding its place," said Michael Walden, an economics professor at N.C. State University. "The Triad is a player in the national and international economy - which is good - but this means it must compete by national and international rules - which can cause stress."
Change in corporate America is being felt today, with local blue- and white-collar jobs at risk as companies take production, technology and services offshore to gain lower labor costs.
"Any time a community loses a corporate headquarters, its pride is damaged," said Gayle Anderson, the president and chief executive of the Greater Winston-Salem Chamber of Commerce.
"Inevitably, it loses key executive positions. Frequently, this dilutes the company's involvement in supporting the arts, human-service organizations and other not-for-profits. With that often comes the loss of ability to retain jobs, especially high-wage jobs like airline mechanics."
Lyons, the former Piedmont employee, said that when he hears someone saying that "there's never been a good company or a good job, I know better. Whatever the reason, please understand that we come from a unique breed of people. We care. Always did and always will. Perhaps that made us different."
Richard Craver can be reached at 727-7376 or at [email protected].
JetPiedmont.com
The Official Web Site of The Piedmont
Memories assuage the pain of losing our beloved airline
By Richard Craver
JOURNAL REPORTER
Robert Reed: Staff vice president, Stations; curator, Piedmont Aviation Historical Society. (Journal photo by David Rolfe)Dreams die hard in Winston-Salem.
Just ask former employees of Piedmont Aviation Inc., the homegrown airline that prided itself on gracious service, operational efficiency and devoted workers.
Twenty years ago, the Piedmont era ended when USAir Group Inc. bought the company for $1.6 billion.
The unpopular merger, completed on Nov. 5, 1987, eventually stripped away 5,100 local jobs and most of the airline's operations. But more than that, it marked a turning point for the city's sense of self.
No longer, it seemed, could a successful local company, built on hard work and innovation, be assured of survival. For some, it seemed that despite its best efforts Winston-Salem could no longer shape its own destiny.
In Piedmont's case, time has not eased the bitter loss of what was and what could have been.
"It still tugs at my guts, and brings a tear to my eyes," said Steve Lyons, a former Piedmont employee who still chats to old colleagues on www.jetpiedmont.com - a Web site dedicated to the airline's history. "And I can't stop going back in memory either," he said. "Some may not understand, if they have never had a career and not just a job, but we were a very close-knit company. That's why it hurt so bad to see them sell her out."
Piedmont drew inspiration from the swashbuckling reputation and innovations of Tom Davis, a founder, chairman and chief executive who took the time to learn employees' names.
Davis piloted an airline that grew from a puddle-jumping local carrier in 1948 to one with hundreds of daily flights from about 100 airports. At its peak, Piedmont employed 24,000 people nationwide.
Analysts said that Piedmont operated lean without being mean to customers or employees. Workers instinctively pitched in wherever needed to keep the flight schedule on time. As a result, Piedmont had an 85 percent on-time arrival rate.
"It's been said that R.J. Reynolds put Winston-Salem on the map, but Tom Davis made it easy for people to get here," the Journal said in reporting on Davis' death in April 1999.
Growing, however, required capital, which Piedmont received in December 1981 when Norfolk and Western Railway, now Norfolk Southern Corp., bought 20 percent of the airline's stock and became its largest shareholder.
The infusion of capital enabled Piedmont to open hubs in Charlotte; Dayton, Ohio; Baltimore;and Syracuse, N.Y.; and to buy two airlines, begin a Florida shuttle service, and fly its first trans-Atlantic route.
Norfolk Southern liked Piedmont's performance so much that when it became eligible to buy a bigger stake in the airline in January 1987, it made an offer of $65 a share in cash for the entire company.
USAir, now known as US Airways, realized that Piedmont would become a stronger East Coast rival with Norfolk Southern behind it, and made a counteroffer to Piedmont's board. Gordon Bethune, a senior vice president of operations for Piedmont, said Norfolk Southern's board decided that it would rather be "a seller at $69 than a buyer at $65."
Bethune left Piedmont shortly after the deal was announced. He is widely credited for resurrecting twice-bankrupt Continental Airlines Inc. as its chief executive in the mid-1990s by emphasizing employee loyalty, consistent flights and fares, and abandoning operations that bled limited resources.
"Once the management made it known that Piedmont was for sale, the board had a fiduciary duty to listen to all offers and be neutral in their decision making," Bethune said. "If it had not been, there would have been scores of lawsuits from institutional shareholders wanting their $4 a share."
Bethune said he faults Piedmont's management for "having an opportunity to do something great with the airline and screwing it up" by not establishing an ironclad commitment from Norfolk Southern. As much as Ross Johnson, the former chief executive of RJR Nabisco, was vilified for his comment about this "bucolic" community, coming in a close second was Ed Colodny, the chief executive of USAir.
For many former executives and employees, Colodny was the symbol of USAir's disdain for Piedmont's culture and work ethic. He was the architect of treating a customer as just an occupied seat.
"You couldn't have found a dumber management in the industry than USAir, and they proceeded to ruin Piedmont," Bethune said.
Losing the identity of the airline was tough, Bill Howard, the chief executive of Piedmont, told the Winston-Salem Journal in April 1999. "We hated it," he said. "Nobody was in favor of the merger. The employees cried when it happened. But we were rewarded very handsomely."
It didn't take long for the stark difference in the USAir and Piedmont cultures to stand out.
In the short term, some rank-and-file Piedmont employees received raises because of the greater union presence at USAir. But many had to move to operations elsewhere to keep their jobs, and others were demoted to lesser duties.
Despite USAir's pledges of "labor protective provisions" when the deal was made in March 1987, Piedmont's local work force of 5,600 was whittled over time to a low of 485 in October 2005. Only four of the top 40 officials, some jumping to other airlines, were left when the merger was complete in August 1989.
Eventually, Piedmont's local headquarters was closed, Smith Reynolds Airport lost its main tenant and the airline's operations were shuttered except for a reservation center off Hanes Mall Boulevard.
The local work force returned to about 800 this year as US Airways' new management brought back reservations jobs that had been transferred offshore. US Airways declined to comment for this article, saying that since America West Holdings Corp. bought the airline in September 2005, current management had nothing to do with the deal.
Former Piedmont employees said that the airline's promise was dashed by a USAir management team obsessed with replacing Piedmont's Southern hospitality with a cold fixation on costs. The strategy backfired - over the years the airline went bankrupt twice.
Piedmont "absolutely had the chance to be another Southwest Airlines," said Michael Boyd, the president of The Boyd Group Inc., an aviation-consulting company in Evergreen, Colo. "Piedmont was innovative, focused on customer service and had a strong presence in the South.
"The USAir deal proved to be bad for everyone - the airline, the employees and the flying public."
Feeding the nostalgia about Piedmont is the Piedmont Aviation Historical Society, the www.jetpiedmont.com Web site and a book The Flight of the Pacemaker, which covers Piedmont's history through the purchase. There are flight re-enactments and frequent gatherings of former employees in many of the destinations that Piedmont served.
"I think we actually intimidated USAir officials because we knew how to run an airline better than they did," said Robert Reed, a vice president of stations at one time and now the curator of the historical society.
"They responded by trying to eradicate the best of what Piedmont had to offer rather than preserving the best of what they had bought. They didn't want any reminders of Piedmont left around," including the bird logo, uniforms, stationary and blueprints. Some memorabilia had to be rescued from trash bins by legacy Piedmont workers, said Cherryl Hartman, the president of the historical society.
Ted Kaplan, a state legislator in 1987 and now a Forsyth County commissioner, said that "there was just a comfort with Piedmont. You weren't just flying with a pilot and attendants, but your neighbors."
Jim Sifford, one of Piedmont's top officials in its pilot operations, said that there was "a down home feel about this airline, right down to the Cheerwine and the barbecue we served on flights. We feel we played a major role in the Charlotte economy becoming what it is today by opening the hub there (in May 1982) and giving the city its first international flight."
Part of the Piedmont mystique is that many former employees are convinced that it could have thrived independently in a deregulated industry that sent many legacy airlines into bankruptcy. Morten Beyer, an aviation consultant in Arlington, Va., said that Piedmont could have bought another airline or two "to take on enough debt to make its share price too overpriced to swallow."
But Bethune said that it was unlikely Piedmont would have remained independent. "If Piedmont's management hadn't agreed to the USAir deal, it likely could have made another piss-poor deal," he said.
Another part of the mystique is that people believe that Winston-Salem would have found a way to thwart the gravitational pull of the Charlotte hub from taking the headquarters there. "We were not growing the airline operations in Winston-Salem, and Charlotte was becoming a bustling city with a new international flight," Bethune said. "But then again, a headquarters can be had anywhere."
Piedmont was a key player among a handful of large, paternalistic corporations that had dominated Winston-Salem's economy for decades. Others included Hanes Corp., McLean Trucking Co., R.J. Reynolds Tobacco Co., Western Electric and Wachovia Corp.
But by the late 1970s, corporate America, spurred by the deregulation of key industries in the region and the siren call of diversification, had punctured the local economic bubble with buyout offers that were too good to refuse.
The repercussions eventually cut deeply across blue- and white-collar lines. Hanes and, much later, Wachovia were sold to larger competitors. McLean went bankrupt with 10,000 jobs eliminated. About 3,300 jobs were cut with the closing of AT&T's plant (former Western Electric) on Old Lexington Road. RJR Nabisco shook the city when it moved its headquarters to Atlanta in January 1987 and the bidding war for Reynolds in 1988 cost more than 2,000 local jobs.
"The Triad has evolved from a somewhat protected economy based on tobacco, textiles and furniture to an open economy that is still finding its place," said Michael Walden, an economics professor at N.C. State University. "The Triad is a player in the national and international economy - which is good - but this means it must compete by national and international rules - which can cause stress."
Change in corporate America is being felt today, with local blue- and white-collar jobs at risk as companies take production, technology and services offshore to gain lower labor costs.
"Any time a community loses a corporate headquarters, its pride is damaged," said Gayle Anderson, the president and chief executive of the Greater Winston-Salem Chamber of Commerce.
"Inevitably, it loses key executive positions. Frequently, this dilutes the company's involvement in supporting the arts, human-service organizations and other not-for-profits. With that often comes the loss of ability to retain jobs, especially high-wage jobs like airline mechanics."
Lyons, the former Piedmont employee, said that when he hears someone saying that "there's never been a good company or a good job, I know better. Whatever the reason, please understand that we come from a unique breed of people. We care. Always did and always will. Perhaps that made us different."
Richard Craver can be reached at 727-7376 or at [email protected].
JetPiedmont.com
The Official Web Site of The Piedmont
