Behind the Bastards - Part Two: Frank Lorenzo: The Man Who Ruined Air Travel
Aired: 2023-08-03
Duration: 01:01:20


=== Wildfire Smoke and Aspartame (05:23) ===

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[00:00:38]  My next guest, it's Will Farrell.
[00:00:42]  My dad gave me the best advice ever.
[00:00:45]  He goes, just give it a shot.
[00:00:46]  But if you ever reach a point where you're banging your head against the wall and it doesn't feel fun anymore, it's okay to quit.
[00:00:53]  If you saw it written down, it would not be an inspiration.
[00:00:56]  It would not be on a calendar of, you know, the cat just hanging in there.
[00:01:03]  Yeah, it would not be.
[00:01:05]  Right, it wouldn't be that.
[00:01:06]  There's a lot of life.
[00:01:07]  Listen to Thanksgiving on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.
[00:01:15]  In 2023, bachelor star Clayton Eckard was accused of fathering twins, but the pregnancy appeared to be a hoax.
[00:01:22]  You doctored this particular test twice, Miss Owens, correct?
[00:01:26]  I doctored the test once.
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[00:01:37]  My mind was blown.
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[00:01:43]  As the season continues, Laura Owens finally faces consequences.
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[00:01:56]  Ah, what's Miles my Miles?
[00:02:03]  How are you doing, Miles?
[00:02:05]  What's Miles, my Miles?
[00:02:07]  Miles.
[00:02:07]  Oh, my Gray.
[00:02:09]  What's Miles My Gray, maybe?
[00:02:10]  I just had a bunch of ice cream.
[00:02:12]  Yeah.
[00:02:13]  Yeah, you're eating blue ice cream, which is going to make it look like you were, I don't know.
[00:02:18]  I want to say like something grossly sexual about like the Braveheart guy because all the blue stuff.
[00:02:23]  Oh, yeah, yeah, yeah.
[00:02:25]  Yeah, I didn't figure out a good joke ahead of time.
[00:02:28]  So I don't know what you'd say, but I get it.
[00:02:30]  I get where you're going with it.
[00:02:31]  You get like you understand what the potential was.
[00:02:34]  Oh, yeah, totally.
[00:02:35]  I see that.
[00:02:36]  I see the elements on the table for something great.
[00:02:39]  I just didn't know how to put it together either.
[00:02:41]  Yeah.
[00:02:41]  But yeah, this ice cream is so blue that it's.
[00:02:45]  I'm a little alarmed how much I like it.
[00:02:47]  And I feel like a fucking child when I order it at this place.
[00:02:50]  But you know what?
[00:02:52]  Who gives a fuck?
[00:02:53]  Maybe I am a child.
[00:02:55]  What was your first thing that you ate as a kid?
[00:02:58]  Then you ate it again as an adult.
[00:02:59]  And you're like, this isn't food.
[00:03:00]  What the fuck?
[00:03:02]  People shouldn't have access to this.
[00:03:03]  Oh, my God.
[00:03:04]  There's a few things, but I feel like maybe like shark bites or like gushers.
[00:03:10]  Oh, no.
[00:03:11]  No, gushers are wholesome.
[00:03:13]  I love them.
[00:03:13]  I mean, I love them too.
[00:03:16]  I mean, and I remember back at the old studio, we had them there.
[00:03:18]  Remember, Sophie?
[00:03:19]  Yeah, I ordered them and I fucking ordered them.
[00:03:21]  Yeah, I remember.
[00:03:22]  And I remember, but here's the thing.
[00:03:23]  Not that I'm saying I disrespect them, but I remember eating them like, yo, this is fucking, this is just sugar.
[00:03:28]  What the fuck am I doing?
[00:03:29]  But I deliberate.
[00:03:31]  Mine was always, and I still kind of love them, is those like, what do you call it?
[00:03:37]  It's like the stick and then like the pouches of colored sugar.
[00:03:41]  Oh, fun dip?
[00:03:42]  Yeah, fun dip.
[00:03:43]  You're just like sugar.
[00:03:44]  Yeah, sugar in here, dude.
[00:03:46]  Those are, it's so funny.
[00:03:48]  Like, this is an awesome thing.
[00:03:50]  Yeah, just chemicals on a dipstick that you just licked over.
[00:03:54]  Like, what was that stick even made of?
[00:03:56]  It's pure sugar, Miles.
[00:03:59]  Only thing.
[00:03:59]  A fun dip is just raw sugar, it's just pure.
[00:04:02]  Yeah, I guess the only thing is yeah, just like the pouch that in it was in was just the only thing.
[00:04:07]  That was not sugar no, and it's like, you know we we're, we're recording this the week that I don't know when this will air, but as we're recording this, everyone like there's just a big store where they're like oh, aspartame causes you, could cause you cancer, and like you look into it and it's like well, if you have like between a dozen and three dozen cans a day, you might get cancer, as opposed to like I don't know, man it everything.
[00:04:31]  Like we're all shoveling so much crap and poison into ourselves at all times.
[00:04:36]  I don't know that.
[00:04:37]  I I feel like diet coke's not going to be many people's primary risk factor, but whatever it's, and it's also it's pronounced aspartame.
[00:04:44]  Okay, we all know that that's how we have it aspartame, but yeah, it's.
[00:04:50]  I think that also feels like the kind of thing that, like the sugar lobby would come out with too many unlike sugar which isn't associated with any health problems.
[00:05:01]  Yeah, just do whatever guy like listen hat, like statistically, like a third of the people listening to this are doing so while blanketed in wildfire smoke and like burning the burning remnants of asbestos and insulation, like it's not going to be the aspartame that kills.
[00:05:20]  You guys, take your aspartame, eat your blue ice cream, do it for the sword.

=== Reagan Breaks the Strike (14:44) ===

[00:05:24]  You know yeah whatever, it doesn't matter.
[00:05:26]  Like every, you're fine and by fine I mean doomed, but everything is so it's okay, whatever.
[00:05:32]  Anyway, you want to talk some more about Frank Lorenzo?
[00:05:35]  No yeah, I do so today.
[00:05:39]  You know uh, United Airlines is kind of the descendant of Continental, and United Airlines is like an airline right, I don't think anybody's like ah United, I have so many great United experiences.
[00:05:52]  It's also not like the worst of the airlines.
[00:05:55]  They're just kind of like right in the middle yeah right, right in the middle.
[00:05:58]  You know they're not as nice as like a smaller airline like Alaska, but I will take them over.
[00:06:04]  I don't know fucking American Airlines or whatever, certainly over like Spirit um, but I, I i'm never like psyched to get on a fucking uh uh, United flight either, but people were psyched to fly Continental back back in the day.
[00:06:18]  Um, Continental was like one of the airlines as shit.
[00:06:21]  You know, the Reagan era is kicking off.
[00:06:23]  You know, you've kind of got like the.
[00:06:25]  It's like the end of the Late Carter Era, early Reagan era is when sort of Continental is kind of starting to starting to look its age.
[00:06:33]  You know, even after deregulation they've kept their high fees and they've kept their passenger perks, so like passengers, consistently rated as like one of the best airlines in the world.
[00:06:43]  Um, but it's not making a lot of money, whereas ti, the airline Lorenzo runs, is basically the opposite.
[00:06:48]  It's a shitty budget airline that cannot make or that that like makes a profit but does it because it's.
[00:06:55]  It's shitty enough for people to afford.
[00:06:58]  Right in 1979, Continental lost more than 13 million dollars and the bleeding accelerated.
[00:07:03]  In 1980 the company gets a new ceo at this time, a guy named Alvin Feldman.
[00:07:08]  Uh, and Alvin is generally remembered That's that should be a spoiler as a nice guy and a diligent businessman of the old style.
[00:07:16]  And he's like, he's trying to stop the bleeding, but he doesn't want it to like change its character.
[00:07:20]  He tries to like, he merges it with this other company.
[00:07:23]  He's hoping that like he can keep it, you know, special and somehow make it profitable.
[00:07:27]  But Continental, in addition to like dealing with changes in the market, is also feuding with their workers over new contracts.
[00:07:34]  And because they're not as big as like American or TWA, you know, they've got a pretty small market cap, which means that you can actually purchase a controlling interest in their stock for surprisingly little money.
[00:07:48]  And Lorenzo, to Lorenzo, this is like a shark smelling blood in the water.
[00:07:52]  Right.
[00:07:52]  Right.
[00:07:53]  Yeah.
[00:07:54]  So its total market value is like $150 million.
[00:07:58]  And because, again, the stock market's nonsense, the company is worth way more than $150 million.
[00:08:03]  If you just like add up all of their planes, they're worth a lot more than that.
[00:08:07]  But because the business isn't doing as well as it used to be, like their market cap is shit.
[00:08:12]  And so he's able to, Lorenzo's able to basically like buy up a bunch of big investors who have like interests in it and like work out a buy.
[00:08:21]  Like he's, he just basically starts eating up more and more and more of like getting close to a controlling interest in Continental.
[00:08:28]  Because if he's able to get it, he'll wind up with way more value in like assets he can strip that he's actually spending on this thing.
[00:08:37]  So this process starts for him in February of 1981.
[00:08:41]  And Feldman, when he realizes, oh my God, this guy who is like the corporate raider of the airline industry is buying up my beloved airline, he tries to go to war with him, right?
[00:08:52]  But Lorenzo is a lot faster.
[00:08:54]  He's a lot smarter.
[00:08:56]  He's dirty, I bet.
[00:08:57]  Huh?
[00:08:58]  And fights dirtier.
[00:08:59]  He fights dirty.
[00:09:00]  Feldman's like a nice guy.
[00:09:03]  He's going to try the high-minded way of fighting back, and it's not going to work for him.
[00:09:07]  But like, so he, as Continental, he goes to court to try to get the CAB to rule in favor of like, you know, basically saying that like, hey, for Lorenzo to buy up Continental because he already owns these other airlines is anti-competitive.
[00:09:22]  But the CAB rules in Lorenzo's favor because it's the Reagan era.
[00:09:26]  Texas Monthly writes, quote, while the 53-year-old Feldman remained at Continental's Los Angeles headquarters, Lorenzo was everywhere, flying around the country, lobbying legislatures, institutional investors, and even the media.
[00:09:37]  Lorenzo made many promises.
[00:09:38]  He wrote California officials that he had no plans to move Continental headquarters or any of its operations out of Los Angeles.
[00:09:45]  He said he had no intention of firing employees.
[00:09:47]  He said he wouldn't sell planes to raise money.
[00:09:49]  Within two years, he had done them all.
[00:09:53]  Yeah.
[00:09:54]  That's going to worry you.
[00:09:55]  I'm not going to do that.
[00:09:56]  I'm not going to like sell the planes I see here for money.
[00:09:59]  No, why would I do that?
[00:10:00]  Come on, guys.
[00:10:01]  Come on.
[00:10:02]  As a rule, if you're like a regulator and like somebody starts making specific promises about what they won't do if you let them do something they want to do, those are the things they plan on doing, right?
[00:10:12]  Like that's how themselves.
[00:10:14]  Yeah.
[00:10:14]  So Continental's unions are kind of the most effective defense that Continental has against Lorenzo.
[00:10:22]  And kind of working with Feldman, they come up with what seems like a pretty good idea on paper.
[00:10:28]  It's what's called an employee stock ownership plan or ESOP.
[00:10:32]  And basically, the idea that these unions work out with Feldman is that workers are going to buy control of the company.
[00:10:39]  This could work out for them because federal law gave ASOPs really nice tax breaks.
[00:10:44]  And they're able to kind of work with some banks to get like, there's like 185 million they need to get in financing for this.
[00:10:50]  So Feldman's on board.
[00:10:52]  The unions start like making a national campaign, basically telling people, hey, you know, you have all these nice fond memories of Continental.
[00:10:58]  You know, we're this like prestigious airline and, you know, we want to stop these ghoulish, soulless Reaganites from taking over our beautiful airline and it'll be worker owned.
[00:11:08]  And it's like, it shows you how different the world is that like the Texas legislature passes a resolution like cheering on the effort, right?
[00:11:17]  Actually opposing a Texas-based company trying to take over the airline.
[00:11:21]  Yeah.
[00:11:22]  Well, because like if you think about it, like I'm not going to say necessarily that there's less culture war brain poisoning, but it's different.
[00:11:29]  And conservatives in this era, you know, they voted for Reagan, obviously, but there's still this attitude of like, well, these are working, the idea of like working class people taking over their own airline is going to be more attractive to a lot of conservatives than like letting this ghoulish, bloodless Harvard grad take it, you know?
[00:11:47]  Right.
[00:11:48]  Whereas now it's completely inverted and it's like the thought of like any worker power is just like, oh, no, no, no.
[00:11:53]  Like then firebomb them.
[00:11:55]  Yeah.
[00:11:55]  He would post Lorenzo would post a picture of himself in jeans and a shotgun and people would be like assassinating pilots on the on the highway, you know?
[00:12:05]  So there was a, this is like a potentially, you know, cool idea, but there's a problem.
[00:12:11]  The plan needs majority approval at a shareholders meeting for like the employees to be able to do this thing.
[00:12:16]  And Lorenzo had 48.5% of the stock at this point, which is enough to block like anything from happening.
[00:12:23]  Continental goes to the New York Stock Exchange and the California Corporation Commissioner's Office to try and like force through the ESOP plan without a vote, but they get denied.
[00:12:33]  And on August 7th, because it's not working out, the banks who'd offered to help finance it withdraw their financial commitments and like, you know, it falls apart.
[00:12:42]  So this doesn't work.
[00:12:44]  Tragically, like the employees are not going to be able to buy their own airlines.
[00:12:48]  And so two days after the banks pull their financing, while Lorenzo continues his full court press to take over Continental, the CEO Feldman issues a press release telling all of his workers that the ESOP plan is no longer possible.
[00:13:02]  He tells them, sadly, he's like, and this is like a pretty emotional letter for him.
[00:13:06]  He's like, you know, we can't get financing.
[00:13:09]  You know, this has kind of sunk our chances.
[00:13:11]  I'm so sorry that this failed.
[00:13:13]  And then after sending this out, he leaves his office at LAX in the middle of the day, goes on a little shopping trip, and he returns soon after with a package.
[00:13:22]  Frank works the rest of the day winding down his control of Continental, preparing to hand it off to Lorenzo.
[00:13:29]  And then at a little after 7 p.m. Pacific Standard Time, he calls the security desk and he asks them to turn off the lights in his office.
[00:13:36]  Then he gets on the couch and he shoots himself through the head.
[00:13:39]  Oh my God.
[00:13:42]  No.
[00:13:43]  It's like, it's pretty bleak.
[00:13:45]  The fuck.
[00:13:46]  It's like some Paul Thomas Anderson movie.
[00:13:48]  Yeah, it kind of is.
[00:13:49]  Like it's, it's this really like intense story.
[00:13:53]  There's a lot about sign of the changing of the guard, just sort of within the capitalist system from like, you know, Feldman, I'm not going to pretend to Al Feld.
[00:14:00]  I'm sure he wasn't like, you know, a fucking flawless hero, but he comes from this era where like, yeah, like we're capitalists, but there's this understanding of like the prestige of the business.
[00:14:09]  Some things are, it's not purely about maximizing profit as opposed to Frank Lorenzo was like, no, nothing matters but short-term stockholder value.
[00:14:17]  Yeah.
[00:14:17]  Yeah, because it's like, yeah, Feldman's like from there of like, you provide people a service and they give you money and you want it to be fair and you give them some kind of value back.
[00:14:27]  And this guy's like, yeah, fuck all that.
[00:14:29]  All that shit.
[00:14:29]  I'll sell your fucking planes, dude.
[00:14:31]  Get the fuck out of my face, loser.
[00:14:33]  Like Feldman just can't exist in the era of Frank Lorenzo.
[00:14:37]  So no, very like no country for old men.
[00:14:39]  It really is.
[00:14:40]  Yeah.
[00:14:41]  It's one of like this, it's one of the more like, yeah, Cohen brothersy fucking stories in the history of like modern capitalism.
[00:14:50]  And that's like this.
[00:14:51]  That's the day that the shit fell through, basically, that happened.
[00:14:55]  Yeah, yeah.
[00:14:55]  Kind of, well, like a couple of days after.
[00:14:57]  Right.
[00:14:57]  Like, but that was like, but that was sort of like the last item of that, that rule.
[00:15:02]  Yeah.
[00:15:03]  And it's one of those things.
[00:15:04]  It's interesting.
[00:15:05]  I haven't seen a lot of like, you know, we've got, we do get to bring up the Cohen brothers.
[00:15:09]  We've gotten a lot of like movies about like, you know, the, those, the corporate ghoul, the capitalist ghouls of like the, the train industry, right?
[00:15:17]  Like stuff like that.
[00:15:18]  Right, right, right.
[00:15:18]  And a lot of more modern stuff.
[00:15:19]  I've never actually seen this period depicted, but it's pretty, like, we're going to go over some of this, like what's happening, this like battle between like the unions and the airlines and like this old attitude that's less competitive of like how airlines should be in the new one.
[00:15:34]  Obviously, like, none of these people are, you know, when we talk about the old way of things, it is worth noting part of why it falls apart is that it can't make money because it was never, that was never the primary purpose.
[00:15:43]  Yeah.
[00:15:44]  So, you know, it is, it is complex.
[00:15:46]  It's certainly more complicated than a lot of the stuff we talk about.
[00:15:50]  But yeah, Frank Lorenzo is like reached out to by the New York Times and he issues a statement being like, oh, you know, Mr. Feldman was a was a great guy.
[00:16:00]  You know, I'm so sorry to his family.
[00:16:02]  Like, oh my God.
[00:16:04]  Yeah.
[00:16:04]  Like, you don't need to say anything, man.
[00:16:06]  We know you don't care.
[00:16:07]  Like, no, of course you do.
[00:16:08]  Nobody expects that from you.
[00:16:09]  Yeah.
[00:16:09]  Your job is to not have a soul, Frank Lorenzo.
[00:16:12]  It's fine.
[00:16:13]  He's like, yeah, but I got to say this stuff, you know, so I look human.
[00:16:16]  You got to say the thing.
[00:16:17]  Union resistance died with Feldman.
[00:16:19]  Texas Air takes over Continental the next month.
[00:16:22]  And in short order, the two airlines are combined, which means Frank Lorenzo now controls effectively the seventh largest airline in the company or in the country.
[00:16:30]  Now, there's a downside to acquiring a big, bleeding, giant giant like Continental.
[00:16:35]  It is a money sink, right?
[00:16:36]  There's a reason why it was on the table to buy.
[00:16:39]  The airline industry is in a very new place and it's kind of reeling from all from deregulation, from all these sudden changes at the end of the Carter era.
[00:16:47]  And then at the start of the Reagan era in August of 1981, you have the air traffic controllers strike, right?
[00:16:53]  And this is basically air traffic controllers.
[00:16:55]  It's like a hard gig.
[00:16:56]  The hours are shit.
[00:16:58]  They're not making enough money.
[00:16:59]  So they decide to go on.
[00:17:00]  If you fuck up, it's a disaster.
[00:17:02]  If you fuck up, so many people die.
[00:17:05]  But when they decide, like most people, again, like if you've got, I don't know, like people who work at Albertson's grocery stores go on strike.
[00:17:13]  You know, that can matter.
[00:17:13]  That matters in a community.
[00:17:14]  It certainly matters to Albertsons, but like there's other grocery stores, you know, like the, the, the overall impact to the country isn't massive.
[00:17:22]  Whereas if all the air traffic controllers go on strike, like you can shut, like, yeah.
[00:17:28]  And, you know, obviously, uh, that's not something a guy like Ronald Reagan is going to think should be acceptable.
[00:17:34]  He, he is fundamentally against the idea that any union should have as much power as the air traffic controllers do.
[00:17:39]  So he calls their strike a peril to national security and he orders them back to work at the risk of losing their jobs.
[00:17:45]  And there's still elements of this in like air unions.
[00:17:48]  I think we all remember when like the stewardesses union put an end to that, like the fucking budget, like the government shutdown basically by being like, well, what if planes can't go in the air?
[00:17:58]  How would you fuckers feel then?
[00:17:59]  You know?
[00:18:00]  Right, right, right.
[00:18:02]  And this is, yeah.
[00:18:03]  So there's a, yeah, basically Reagan's like, yeah, if you guys don't go to work, I'm going to fire everybody.
[00:18:10]  And the union calls Reagan's bluff.
[00:18:12]  And Reagan does in fact fire everyone.
[00:18:14]  And he bans all of these air traffic controllers who had struck from federal service for life.
[00:18:20]  This is very celebrated by conservatives, but it is a fucking disaster for a while because like suddenly all the guys who make air travel possible are gone.
[00:18:29]  Right.
[00:18:30]  So they have to fill vacancies.
[00:18:32]  They bring in the military, you know, flight controllers and shit from the military.
[00:18:35]  There's controllers who like, for whatever reason, had worked outside the union and like different like weird little kind of niche parts of the industry.
[00:18:42]  They bring in like retirees and stuff.
[00:18:45]  They bring in like people who had refused to go with the union on the strike.
[00:18:50]  But it takes 10 years before FAA controller staffing returns to normal.
[00:18:55]  The benefit of this for Republicans is that as much of a fuck up as it is for the industry and for flyers and for obviously these controllers, it does, it's almost like a deathblow to organize labor.
[00:19:06]  In a lot of ways, you could argue that like you kind of have the labor movement, you know, starting up late 1800s, early 1900s, fighting for that eight-hour workday, all these other things that we get from organized labor.
[00:19:16]  And labor has a significant degree of power kind of up until Reagan crushes this strike.
[00:19:23]  And it's, it's, it's like a, it's an epochal change in the way that we conceive of labor in this country.
[00:19:29]  Yeah, I mean, it's, I feel like the last time we were talking about this was just with the rail workers at the end of the year.
[00:19:37]  And like, oh, what's the government going to do?
[00:19:38]  Because the last time it was the air traffic controllers and look where that got us.
[00:19:43]  But yeah, it is, yeah, it's, it is true.
[00:19:46]  Like you're, there's so many huge fundamental shifts happening, whether it's just like the perspective of what even a business is and what it's meant to do and like who it's supposed to provide value for to who the fuck even deserves to like, you know, demonstrate that they need better wages or working conditions in such a like cynical way.

=== Air Traffic Controller Shortage (02:00) ===

[00:20:08]  Yeah.
[00:20:09]  Now, you know, we can talk more.
[00:20:12]  There's a lot more to say about, you know, Reagan and the breaking of that strike, but that is not the story of today.
[00:20:18]  And while you might expect Frank Lorenzo, obviously, to be in favor of Reagan breaking the strike, and obviously he like, he's a fucked the unions guy, this also has a negative impact on his business because it like he is when he buys Continental, his plan is to basically cut a bunch of like the routes that aren't efficient and launch a bunch of new routes and kind of like use his existing business to make it more effective.
[00:20:40]  But like he can't actually expand or really wildly change the way his airline works and the way that he needs to.
[00:20:47]  If there's this like cap on how much air travel can exist because we're out of fucking controllers, right?
[00:20:53]  People that are like this is a problem for him.
[00:20:56]  And he's just burnt a shitload of capital to buy Continental.
[00:20:59]  So he needs to be able to expand and show that like he can make a profit.
[00:21:03]  In 1981, then Continental reports losses of, again, when he had bought Continental, they were losing 13 million a year.
[00:21:09]  In 81, they lose $100 million.
[00:21:13]  So it's a little bit of like an Elon Musk type thing where it's like, I don't know, man, maybe this wasn't the best plan.
[00:21:19]  I think I can do something.
[00:21:20]  Oh, fuck my life.
[00:21:22]  Yeah.
[00:21:23]  Oh, shit.
[00:21:24]  You know, some of this is not directly his fault, but it's certainly the fault of like kind of the ideologies he's championed, this like war on the rights of labor.
[00:21:33]  And did he do like a boxing match against another airline exactly?
[00:21:36]  Yeah, he does.
[00:21:37]  He actually beats the shit out of Mark Zuckerberg.
[00:21:39]  But at this point, Mark Zuckerberg is just like, you've seen some of those old Catholic propaganda cartoons with like the babies that are in heaven before they're born.
[00:21:47]  Yeah, exactly.
[00:21:48]  That's who he's fighting.
[00:21:49]  Yeah.
[00:21:49]  Like the Catholic anti-abortion propaganda angel, Mark Zuckerberg.
[00:21:57]  It was a short fight.
[00:21:58]  Of Catholic propaganda.
[00:22:00]  This podcast is sponsored by Catholicism.
[00:22:04]  Catholicism.

=== Catholic Propaganda Cartoons (04:06) ===

[00:22:09]  It's fine now.
[00:22:10]  Yeah.
[00:22:13]  What mood are you in today?
[00:22:15]  It's very.
[00:22:16]  I don't know.
[00:22:16]  I don't know, Sophie.
[00:22:17]  I don't know where I'm coming or going here.
[00:22:22]  What's up, everyone?
[00:22:23]  I'm Ego Modem.
[00:22:24]  My next guest, you know, from Step Brothers, Anchorman, Saturday Night Live, and the Big Money Players Network.
[00:22:32]  It's Will Farrell.
[00:22:35]  My dad gave me the best advice ever.
[00:22:38]  I went and had lunch with him one day, and I was like, and dad, I think I want to really give this a shot.
[00:22:43]  I don't know what that means, but I just know the groundlings.
[00:22:46]  I'm working my way up through and I know it's a place to come look for up and coming talent.
[00:22:50]  He said, if it was based solely on talent, I wouldn't worry about you, which is really sweet.
[00:22:55]  Yeah, he goes, but there's so much luck involved.
[00:22:58]  And he's like, just give it a shot.
[00:23:00]  He goes, but if you ever reach a point where you're banging your head against the wall and it doesn't feel fun anymore, it's okay to quit.
[00:23:08]  If you saw it written down, it would not be an inspiration.
[00:23:11]  It would not be on a calendar of, you know, the cat just hang in there.
[00:23:18]  Yeah, it would not be right, it wouldn't be that.
[00:23:21]  There's a lot of luck.
[00:23:22]  Listen to Thanksgiving on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.
[00:23:32]  10-10 shots fired, city hall building.
[00:23:35]  A silver .40 caliber handgun was recovered at the scene.
[00:23:40]  From iHeart Podcasts and Best Case Studios, this is Rorschach: murder at City Hall.
[00:23:46]  How could this have happened in City Hall?
[00:23:47]  Somebody tell me that.
[00:23:48]  Jeffrey Hood did.
[00:23:50]  July 2003.
[00:23:52]  Councilman James E. Davis arrives at New York City Hall with a guest.
[00:23:57]  Both men are carrying concealed weapons.
[00:23:59]  And in less than 30 minutes, both of them will be dead.
[00:24:08]  Everybody in the chambers ducks.
[00:24:11]  A shocking public murder.
[00:24:12]  I screamed, get down, get down.
[00:24:14]  Those are shots.
[00:24:15]  Those are shots.
[00:24:16]  Get down.
[00:24:16]  A charismatic politician.
[00:24:18]  You know, he just bent the rules all the time, man.
[00:24:20]  I still have a weapon.
[00:24:22]  And I could shoot you.
[00:24:25]  And an outsider with a secret.
[00:24:27]  He alleged he was a victim of flat down.
[00:24:30]  That may or may not have been political.
[00:24:32]  That may have been about sex.
[00:24:34]  Listen to Rorschach, murder at City Hall on the iHeartRadio app.
[00:24:38]  Apple Podcasts are wherever you get your podcasts.
[00:24:47]  There's two golden rules that any man should live by.
[00:24:51]  Rule one: never mess with a country girl.
[00:24:54]  You play stupid games, you get stupid prizes.
[00:24:57]  And rule two, never mess with her friends either.
[00:25:01]  We always say, trust your girlfriends.
[00:25:04]  I'm Anna Sinfield, and in this new season of The Girlfriends, oh my God, this is the same man.
[00:25:10]  A group of women discover they've all dated the same prolific con artist.
[00:25:15]  I felt like I got hit by a truck.
[00:25:17]  I thought, how could this happen to me?
[00:25:19]  The cops didn't seem to care.
[00:25:21]  So they take matters into their own hands.
[00:25:24]  I said, oh, hell no.
[00:25:25]  I vowed I will be his last target.
[00:25:28]  He's going to get what he deserves.
[00:25:32]  Listen to the girlfriends.
[00:25:34]  Trust me, babe.
[00:25:35]  On the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.
[00:25:48]  We are back.
[00:25:49]  And Miles, this is exciting.
[00:25:53]  I just found out from you once I started talking about Catholicism that you are actually engaged in recruiting for a new crusade to retake the Holy Land.
[00:26:04]  Yeah.
[00:26:05]  But because we're 90s kids, the Holy Land is kind of the ephemeral concept of playing the N64 with your friends at a birthday party.
[00:26:14]  Exactly.

=== Deregulation Backswing Era (15:16) ===

[00:26:15]  There's still a high death toll expected.
[00:26:17]  Is that correct?
[00:26:18]  Yeah, yeah, because as much as we love GoldenEye, we are going to be using actual landmines and proximity mines.
[00:26:25]  Excellent.
[00:26:25]  Excellent.
[00:26:25]  Yeah, yeah, yeah.
[00:26:26]  Yeah.
[00:26:26]  Well, find Miles on Gibsend Go and Patreon.
[00:26:32]  He's taking donations on both of those to reclaim our 90s video game past.
[00:26:38]  And by that, I think you guys know what I really mean.
[00:26:41]  But you know, if we're going to get the money, it's about N64, okay?
[00:26:46]  Yeah.
[00:26:48]  So 1981, Continental loses $100 million.
[00:26:51]  And Texas Air is plummeting too, right?
[00:26:54]  He's brought, he had like, it was looking like, wow, this guy's, he saved this company.
[00:26:57]  He made it profitable.
[00:26:58]  What a genius.
[00:27:00]  He loses $50 million in 1981.
[00:27:03]  So this is a disaster.
[00:27:05]  Barrens calls it a stockholder's nightmare.
[00:27:07]  And what's actually happening here is that a lot of Frank's success, the perception that he was this like master of rescuing damaged airlines, was not real success, but the result of a rational exuberance.
[00:27:18]  Investors liked how he talked about unions and the market was good for the kind of airline he ran.
[00:27:23]  But he was making a ton of bad calls too.
[00:27:26]  After the Continental acquisition, he launched a new major marketing rollout that had flopped disastrously, making Continental in this period the only airline that sees both revenue and passenger load drop for the quarter.
[00:27:39]  So this has kind of revealed that he's not a great airline manager.
[00:27:44]  He was just good at convincing stockholders that like things were on the other side.
[00:27:48]  But that's how like all of these private equity things end up is guys who only know how to make line go up end up taking over like healthcare companies.
[00:27:56]  And they're like, I don't know.
[00:27:57]  I just know how to make fucking numbers look different.
[00:27:59]  Yeah, I can make the line go up.
[00:28:01]  Now, I will say in a little bit of like defense of Lorenzo, this is like a real bad time to be running most airlines.
[00:28:08]  If you're not one of the top like two or three big ones, you're having a lot of trouble.
[00:28:12]  Braniff collapses at this time.
[00:28:15]  So do a lot of the other old giants.
[00:28:16]  And most of them are like getting bought up by kind of like the controllers at the very top.
[00:28:21]  And Frank has like the seventh biggest airline, but there's a pretty big drop off between like the top three or four and number seven.
[00:28:30]  And what we're seeing in this period is kind of the backswing of deregulation, right?
[00:28:34]  Initially, there's this huge drop in ticket prices.
[00:28:37]  Way more people take to the sky.
[00:28:39]  But the end of the CAB's anti-competitive regime also leads to an inevitable tightening of the industry.
[00:28:46]  And kind of where that's ended up today, you know, we talked about it's not entirely negative.
[00:28:51]  There's a lot of things that are positive about deregulation.
[00:28:54]  But the other thing, the thing that it's like the way it all winds up is that today, four carriers control 80% of the domestic airline market.
[00:29:03]  As former American Airlines Chairman Robert Crandall told ABC, the consequences of deregulation have been very adverse.
[00:29:09]  Our airlines, once world leaders, are now laggards in every category, including fleet age, service quality, and international reputation.
[00:29:16]  Fewer and fewer flights are on time.
[00:29:18]  Airport congestion has become a staple of late-night comedy shows.
[00:29:22]  An even higher percentage of bags are lost or misplaced.
[00:29:24]  Last-minute seats are harder and harder to find.
[00:29:27]  Passenger complaints have skyrocketed.
[00:29:29]  Airline service by any standard has become unacceptable.
[00:29:33]  Now, Crandle is a business ghoul too, right?
[00:29:36]  And he's like, he's kind of moaning the deregulation in part because like he's a guy who had succeeded in an earlier age of airline pride in it.
[00:29:46]  Exactly.
[00:29:46]  Yeah.
[00:29:47]  But it's one of those things.
[00:29:48]  So like, I don't know, there's a lot of downsides to deregulation.
[00:29:53]  And at first, the, you know, it doesn't matter to Lorenzo, but like by the time kind of we're in the early 80s, the industry is starting to contract.
[00:30:01]  And he's just kind of, it looks initially, he's not big enough to like make shit work.
[00:30:05]  He's getting eaten alive by all sides.
[00:30:07]  So the walls are kind of closing in on the guy at this point.
[00:30:10]  And he defaults to what was basically his only real strategy, cutting perks for passengers and squeezing his employees as hard as possible.
[00:30:19]  Frank didn't just see this as good business.
[00:30:21]  There was a degree to which this is like a thing he enjoys.
[00:30:23]  It's like a pleasure to him fucking with his workforce.
[00:30:26]  Right.
[00:30:27]  I found a book series called Flying the Line by George Hopkins.
[00:30:31]  George is a former Navy pilot and an air travel industry historian.
[00:30:35]  And these, he write, he's got like this series of books called Flying the Lion.
[00:30:39]  And if you're like, if you want a frustrating amount of detail about how air travel used to work, George is your boy, right?
[00:30:46]  He will tell you way more than you ever wanted to know about how fucking airlines worked in the 70s and 80s.
[00:30:53]  He portrays Lorenzo, and again, he's got an axe to grind against this guy.
[00:30:57]  He portrays Lorenzo as almost ghoulishly excited to fuck over stewardesses in particular.
[00:31:02]  Quote, Phil Nash, who went to work for Continental in 1966 after serving in the U.S. Air Force and later became ALPA EVP in 1980 to 1982, will never forget his first encounter with Frank Lorenzo.
[00:31:14]  Above all others, Lorenzo typified this new managerial breed.
[00:31:18]  At a special meeting in Denver, Nash asked Lorenzo, who was in the process of taking over Continental at the time, why he was so intent on reducing the pay of flight attendants.
[00:31:26]  Didn't he know, Phil Nash asked, that many of them were single parents who couldn't afford to own homes at the pay rates he was proposing?
[00:31:32]  Lorenzo looked at Nash as if he were crazy.
[00:31:35]  Quite frankly, I don't believe flight attendants ought to make enough money so they can own houses.
[00:31:39]  Lorenzo told a flabbergasted Nash.
[00:31:41]  Maybe they should find another job that pays better.
[00:31:44]  Oh, fuck.
[00:31:46]  Wow.
[00:31:46]  He's always wearing his like sociopath badge on his sleeve.
[00:31:50]  Like at every opportunity, he can't even, he's like, Yeah, yeah, they don't.
[00:31:53]  I mean, they don't deserve air.
[00:31:54]  Yeah, I don't even think they're really people.
[00:31:55]  Yeah, fuck them.
[00:31:56]  What if we just shoot them?
[00:31:58]  Yeah.
[00:31:59]  I mean, if it's up to me, we'd throw them out the fucking plane before we land and get a new crop before the next flight takes off.
[00:32:05]  And like, yeah, it's, it's wild because like Nash is obviously Nash is a is a capitalist.
[00:32:09]  Nash is a guy who believes in free enterprise, but also he he does.
[00:32:13]  He comes from this old era where he's like, well, but they wouldn't be able to buy houses.
[00:32:17]  And that's like the whole point, right?
[00:32:19]  Like everyone's supposed to be able to buy a house.
[00:32:20]  That's why you toil.
[00:32:22]  No.
[00:32:22]  No.
[00:32:23]  Some people are fucking idiots.
[00:32:25]  Nothing.
[00:32:25]  Take these jobs and fuck them if they take them.
[00:32:28]  Yeah.
[00:32:29]  Like they work and then ideally they drop dead at age 49 when they stop being as profitable.
[00:32:36]  So Frank's prime target next is going to be pilots.
[00:32:40]  Now, for very obvious reasons, pilots tend to make pretty good money, right?
[00:32:44]  And their costs are one of the more significant baked in costs for airline management.
[00:32:49]  And this is normally when we talk about like the struggle of like unions against management, we're talking about like, yeah, you got like a bunch of coal miners, right?
[00:32:57]  And maybe the industry changes around them or like the executives make a bad decision, but the coal miners are like doing their job.
[00:33:04]  They're getting the coal out of the world and they're just getting like fucked over by the people who run the company.
[00:33:09]  It's a bit different with pilots unions because for one thing, up until recently, pilots had kind of run a lot of the airlines, right?
[00:33:17]  So even if you're just a flyer, you're not in management technically, the guy who runs your company is probably a pilot, and so are a lot of executives.
[00:33:26]  And maybe you worked with some of these guys.
[00:33:27]  So like when other airline unions get fucked over, the pilots are usually safe, you know, because they're close with management, right?
[00:33:35]  Right, right, right.
[00:33:36]  And it's like, you know, today we're dealing with this thing where like there's a shortage of pilots in part because there's this very unreasonably long period of time in the U.S. where you have to like be trained and have experience to be able to be a commercial pilot.
[00:33:50]  That's like much longer than like what the requirements are in Europe.
[00:33:53]  And it's a thing that like the pilots unions have fought for because they make more money that way.
[00:33:57]  I'm not blaming everything on the pilots, but it's not, it's not exactly the same as like the stewardesses union, right?
[00:34:02]  Sure, sure.
[00:34:03]  Because they are closer to running, closer to power, right?
[00:34:08]  So pilots have more baked in benefits.
[00:34:10]  And they also like a lot of them are like friends with the guys who are running their company.
[00:34:14]  So one consequence of this is that when management and other airlines had made cuts, the pilots had generally been spared.
[00:34:20]  Dennis Higgins, who worked for Texas International, explained, quote, some people in senior management were extremely close to the pilots and smoothed that mess over.
[00:34:28]  They spent time in pilots' homes, went to kids' graduations.
[00:34:31]  It was very much a family atmosphere.
[00:34:34]  So Lorenzo obviously does not care about the pilots.
[00:34:37]  He wants to fuck them over, but he understands there's an opportunity here, right?
[00:34:41]  Because the pilots' unions are already kind of acclimated to the idea that like, well, maybe we can fuck over some of like our co-workers and other unions as and will still be okay.
[00:34:52]  And Lorenzo, he's kind of like the British Empire, right?
[00:34:55]  He's like, I feel like this is an opportunity I can play these unions off against each other in order to benefit myself.
[00:35:02]  Hopkins writes, quote, Lorenzo, for all his faults, made no secret of his plans, but he deviously led various employee groups to believe that he was after concessions only from other unions.
[00:35:12]  At the time of his takeover, Lorenzo hosted a cocktail reception for TXI's pilots at the Houston Intercontinental Hotel.
[00:35:18]  Lorenzo flatly declared that, except for pilots, he intended to take the airline back to the employment levels of 1967.
[00:35:25]  There are profits to be made here.
[00:35:27]  Dennis Higgins recalls Lorenzo saying, We're going to continue operating the same number of trips, but we are going to get rid of some ground for folks.
[00:35:35]  So because TXI's ground folks are unionized, this strategy means that the airline is going to like, there's going to be some labor fighting over this, right?
[00:35:46]  And Lorenzo is eager to fuck with the unions.
[00:35:49]  So his proposition is like, I'm going to turn all of our baggage handlers and ticket agents into temporary employees, right?
[00:35:56]  I'm just going to replace the unionized guys with temps, which is like a standard tactic today and that's starting to be more common in this period of time.
[00:36:03]  He also argues that like, well, we've got all these flights to cities that are like outlying.
[00:36:08]  And so we've, they've only got like one or two flights coming in a day there.
[00:36:11]  So they don't need any full-time employees.
[00:36:13]  So like for these smaller routes, we'll just hire like college students who need like shitty part-time gigs to be ground employees just when like a flight is departing and arriving.
[00:36:23]  And it's one of those things part of how he's able to get by with this initially is he tells the pilots union, hey guys, I want you to keep making money, but like we can't keep paying you all this money if these worthless ground employees are siphoning all your money away.
[00:36:38]  So what do you say?
[00:36:39]  Yeah.
[00:36:39]  So what do you say?
[00:36:42]  Now, all of the pilots don't buy this.
[00:36:44]  There are some pilots at this big Intercontinental Hotel meeting that are like, well, what if we try to offer better flights and like try to make more money that way?
[00:36:52]  And Lorenzo, he like is has a violent reaction to this idea.
[00:36:57]  He, he, Dennis Higgins recalls, quote, Lorenzo was openly against the better product concept.
[00:37:02]  He said, the traveling public looks for the dollar sign.
[00:37:05]  What they're interested in is a cheap seat.
[00:37:06]  The ones who don't like our service can go pay higher prices on another carrier.
[00:37:10]  He was very cynical about the public.
[00:37:12]  And this is like, you can see this is how all of air travel works now, right?
[00:37:16]  It's like, fuck them.
[00:37:17]  All they want is to see a cheap price.
[00:37:19]  And you know what?
[00:37:20]  We can make them pay more in the long run if we're spirit air.
[00:37:23]  You know, we'll sneak in a couple of hundred dollar charges that they're not seeing.
[00:37:26]  But all these idiots care about is that they see, you know, what looks like a good price initially.
[00:37:31]  We can get them to do all sorts of dumb shit if we trick them.
[00:37:35]  That's Lorenzo's attitude.
[00:37:37]  He's kind of like one of the first guys in air travel who sees where things are going to go here.
[00:37:42]  And he is right.
[00:37:43]  Like people mostly care about it being cheap.
[00:37:45]  It turns out we're willing to suffer with a lot on planes as long as we don't have to pay too much.
[00:37:50]  Yeah, seriously.
[00:37:51]  Yeah, which, you know, whatever.
[00:37:52]  That's life.
[00:37:53]  So while he's doing all this, getting each union to agree to a few cuts under the promise that they'll be spared and someone else will get fired, he starts selling continental aircraft as fast as he can.
[00:38:04]  This puts like $21 million in the bank right away.
[00:38:07]  And he gets another big like $30 million loan from Chase Manhattan.
[00:38:11]  He does this public stock offering to raise more money.
[00:38:14]  And over the course of 83, he builds up this big war chest, right?
[00:38:18]  So suddenly Continental has like a weird amount of cash on hand, even though they lose like 80-something million dollars that year.
[00:38:25]  And everyone assumes he's doing this.
[00:38:27]  He's saving up money because he's going to buy another fucking airline because that's what Frank always does.
[00:38:31]  But he actually has a different, cunning, more fucked up plan.
[00:38:36]  He's going to break the unions once and for all.
[00:38:39]  And he's going to do it by declaring bankruptcy.
[00:38:45]  Yeah.
[00:38:46]  Yeah.
[00:38:47]  He is every he like, I love that every like all of his goals are just in line with making things just as fucked up for other people as possible, just enriching himself.
[00:38:56]  Yeah, I mean, of course, like that's the way it all, that's the way it all works.
[00:39:00]  But he's doing it.
[00:39:01]  This is like, this is one of the first times that he's really he's creating something.
[00:39:06]  No one had ever done this before.
[00:39:07]  So basically his plan is, hey, if you go into bankruptcy, I think you might be able to throw out all your union contracts.
[00:39:15]  Right.
[00:39:16]  And their pensions and shit.
[00:39:17]  Yeah.
[00:39:18]  And no one, no one knew if it would work this way, right?
[00:39:20]  Like this had not been done before.
[00:39:22]  But basically his plan is like, I'll take this shit to the Supreme Court if I have to.
[00:39:26]  I think eventually they'll rule with me because, you know, Reagan's in the fucking White House, right?
[00:39:29]  I can see where the fucking winds are blowing.
[00:39:31]  Yeah.
[00:39:32]  It's like the like Wright brothers are fucking the unions over.
[00:39:35]  They're like, I don't know if you can.
[00:39:36]  He's like, I don't give a, we're going to try, man.
[00:39:39]  We're going to figure it out.
[00:39:40]  Yeah.
[00:39:40]  And if we do, and if it works, welcome to a new age.
[00:39:44]  Yeah, that is exactly what he's saying.
[00:39:46]  And so he would claim like he disleased his appearance at Harvard the next year.
[00:39:50]  And he's like, well, you know, I really failed.
[00:39:52]  And we had to do chapter 11 because like I just couldn't make shit work.
[00:39:56]  You know, this is on me.
[00:39:57]  But we have like notes that he was sending around the company at the time where he's like, you know, this is what's going to work.
[00:40:03]  Like the creditors are ready for it.
[00:40:06]  Like we're going to fucking kill the unions with this shit.
[00:40:08]  Like that's the reason that we're doing this.
[00:40:10]  And at the same time, he starts to execute this very slick media strategy where he's he's really playing up the company's financial problems and he's blaming it all on workers' salaries, right?
[00:40:20]  Like I failed.
[00:40:21]  What I failed in doing is I just couldn't get salaries low enough.
[00:40:24]  You know, we're paying too much on workers and that's why it's impossible to make a profit with this airline.
[00:40:30]  He claimed in his speech at Harvard, quote, what we tried to do was shift the story from it being a bankruptcy to a labor problem as fast as possible.
[00:40:38]  And this works really well, right?
[00:40:40]  So he's, he's basically, as this is going on, as he's prepping to go into chapter 11, he's renegotiating his contracts with these unions.
[00:40:47]  And instead of working anything out with them, he just keeps at the last moment when they'll think they're about ready to sign a contract.
[00:40:54]  He'll be like, ah, nope, you know what?
[00:40:56]  I actually, I can't do this or I can't do that.
[00:40:59]  We have to go back to the drawing board.
[00:41:01]  So the unions eventually decide to go on strike.
[00:41:03]  And as soon as they go on strike, he furloughs all of the non-striking employees or the striking employees.
[00:41:10]  He brings in scabs and he declares chapter 11, right?
[00:41:15]  So he goes into bankruptcy.
[00:41:17]  And he says, well, now that I'm doing bankruptcy, I want the government to let me revoke all of my union contracts.
[00:41:25]  So yeah, that's the plot.
[00:41:27]  That's what he's trying to do here.
[00:41:29]  And this write-up from Texas Monthly describes what happens next.

=== Union Strikes and Scabs (05:41) ===

[00:41:32]  The airline immediately shut down operations and laid off all but 4,000 of its 12,000 employees.
[00:41:38]  Continental executives said the line would resume flights three days later to selected cities at the low price of $49 one way.
[00:41:44]  Returning workers would face pay cuts, increased productivity requirements, and the elimination of all pensions.
[00:41:49]  The salary of flight attendants would drop from $29,000 to $15,000.
[00:41:53]  Pilots making $89,000 would be paid $43,000, the same salary Lorenzo said he would take in place of his normal $257,000.
[00:42:02]  At press conferences, he glossed over Continental's $50 million in cash reserves.
[00:42:06]  The airline faced running out of money in a few days, he insisted.
[00:42:09]  Meanwhile, union leaders and even some business executives denounced him.
[00:42:13]  Wall Street analysts questioned the company's future and competitors rejoiced.
[00:42:18]  So Frank's plan here, there's like an element of desperation to this because no one's ever done this before.
[00:42:24]  He's just pretty sure it's going to work.
[00:42:26]  On September 27th, when like he reopens the airline and starts offering these cut rate flares, basically the whole continental fleet remains on the ground.
[00:42:35]  There were only a handful of flights he was able to actually pull out.
[00:42:38]  But since the airline had technically resumed operations, he was able to ask the bankruptcy court to rescind the union contracts.
[00:42:45]  Gradually, Continental starts opening up more and more flights, bringing in scabs to do all the work.
[00:42:50]  But the real financial health of the company is unclear.
[00:42:53]  He declares at a press conference that, like, we're doing great.
[00:42:56]  The same day he asks the government to release 10 million in their funds to keep the airline from collapsing.
[00:43:01]  The unions fight back.
[00:43:03]  They go on strike.
[00:43:04]  They refuse to go back to work for reduced pay, but they can't stop the scabs from flooding in.
[00:43:09]  And Frank is able to bring in enough workers to keep this minimal schedule operational.
[00:43:14]  Now, the union with the most clout and thus the most power are the pilots.
[00:43:18]  And because pilots made bank, they had enough money that they were able to like draw funding from other pilots' unions to fund their part of the strike.
[00:43:25]  So they start using some of this money to carry out a media campaign where they're basically trying to be like, all this non-union labor has made flying more dangerous.
[00:43:33]  You might die in the air because of what, you know, what Lorenzo's doing.
[00:43:37]  This may have been true because Continental gets fined like 400 grand because the FAA sees that they're not like they're breaking a bunch of rules basically.
[00:43:46]  But no planes crash from Continental in this period.
[00:43:48]  So it's kind of hard to like, you know, really point the finger.
[00:43:52]  It would have helped him if some people had died is what I'd say.
[00:43:55]  Yeah.
[00:43:56]  Now, one of the things that's really interesting is like how ugly this strike gets.
[00:44:01]  So on November 22nd, two Continental pilots get arrested trying to evade a police license checkpoint.
[00:44:08]  Both of these guys are, I think this is like a DUI checkpoint, basically, but both of these pilots had been, they'd been driving to the homes of Continental pilots who were scabbing and throwing pipe bombs at their houses.
[00:44:19]  Oh, shit.
[00:44:20]  They get caught hucking pipe bombs at scabs.
[00:44:24]  Oh, no.
[00:44:25]  And it's like, there's this like little war that goes on because the year after these guys get convicted, a Houston police attendant lieutenant gets charged and convicted of selling confidential information about striking Continental employees to a private detective hired by the airline.
[00:44:40]  So like the fucking nasty strike.
[00:44:44]  Yeah.
[00:44:45]  Soon after all this goes down, a court case is ignited by Frank's Chapter 11 move and it gets a ruling from the Supreme Court.
[00:44:52]  They declare that companies in Chapter 11 have the right to cancel burdensome union contracts.
[00:44:57]  Now, Congress like seals this up.
[00:44:59]  They pass legislation so that like CEOs can't do what Frank did, but he wins, right?
[00:45:05]  He gets to actually like do this shit.
[00:45:07]  Oh, he got so he's only like, is he the only one that got it over the line basically?
[00:45:12]  That got it over the line in this way, right?
[00:45:13]  Like there's still kind of more openings to do this, but Congress kind of makes it harder.
[00:45:18]  But it works out for Frank.
[00:45:20]  His company is still in pretty desperate financial straits, though.
[00:45:23]  And because he's the guy who had like led it there, you might have expected him to have suffered financially.
[00:45:29]  Again, he's like making a big claim like, well, I've cut my salary.
[00:45:32]  I'm making like way less money.
[00:45:34]  You know, we're all hurting here.
[00:45:36]  This is a lie.
[00:45:38]  Yeah.
[00:45:39]  So basically he's like, I'm going to drop my salary from like 260,000 to 43 grand.
[00:45:44]  But that's not like the whole story because like he's getting bonuses, obviously.
[00:45:50]  He's like making hundreds of thousands of dollars in bonuses, but he's also, he set shit up so that like there's this weird, he's basically putting his money into this weird stock transaction that he's like running through an automated subsidiary, which is like doing the, he's basically like doing like an automated stock trick where he's like buying shares and then like reselling them once they get anyway.
[00:46:16]  The way this all works out is that he's able to buy 200,000 shares of his company's stock at 50 cents a share for $100,000, but he only has to pay $5,000 because he has Texas Air loan him the rest of the money.
[00:46:30]  And then he resells it two years later when it's worth more money and effectively makes like an extra $1.5 million for paying five grand, where he basically like has the company subsidize his investment.
[00:46:42]  So, right.
[00:46:43]  Yeah.
[00:46:43]  It's he, he's making, he's doing just fine, right?
[00:46:47]  Um, yes, so, but I mean, he's only making 40 grand a year now, Robert.
[00:46:51]  Yeah, only making 40, he's like one of the first CEOs to be like, oh, if I just tell people my salary's cut, like these idiots don't understand all the ways we can fuck with stock prices.
[00:47:00]  No, no, that's like a minuscule.
[00:47:01]  That's not, that's, I don't even need a salary.
[00:47:04]  It's all the fucking bonuses in the stocks.
[00:47:06]  That's not where the fucking money is.
[00:47:09]  But you know where the money really is, Miles.
[00:47:11]  Tell me, podcast ads.

=== Stock Options and Bonuses (03:04) ===

[00:47:14]  Oh, yeah.
[00:47:15]  Yeah, like these podcast ads.
[00:47:20]  What's up, everyone?
[00:47:21]  I'm Ago Modem.
[00:47:22]  My next guest, you know, from Step Brothers, Anchorman, Saturday Night Live, and the Big Money Players Network.
[00:47:29]  It's Will Farrell.
[00:47:33]  My dad gave me the best advice ever.
[00:47:36]  I went and had lunch with him one day, and I was like, and dad, I think I want to really give this a shot.
[00:47:41]  I don't know what that means, but I just know the groundlings.
[00:47:44]  I'm working my way up through and I know it's a place they come look for up and coming talent.
[00:47:48]  He said, if it was based solely on talent, I wouldn't worry about you, which is really sweet.
[00:47:53]  Yeah.
[00:47:53]  He goes, but there's so much luck involved.
[00:47:56]  And he's like, just give it a shot.
[00:47:57]  He goes, but if you ever reach a point where you're banging your head against the wall and it doesn't feel fun anymore, it's okay to quit.
[00:48:06]  If you saw it written down, it would not be an inspiration.
[00:48:08]  It would not be on a calendar of, you know, the cat just hang in there.
[00:48:15]  Yeah, it would not be.
[00:48:17]  Right, it wouldn't be that.
[00:48:18]  There's a lot of luck.
[00:48:20]  Listen to Thanks Dad on the iHeartRadio app, Apple Podcast, or wherever you get your podcasts.
[00:48:30]  10-10 shots fired.
[00:48:31]  City Hall building.
[00:48:33]  A silver .40 caliber handgun was recovered at the scene.
[00:48:37]  From iHeart Podcasts and Best Case Studios, this is Rorschach, murder at City Hall.
[00:48:43]  How could this have happened in City Hall?
[00:48:45]  Somebody tell me that.
[00:48:46]  Jeffrey Hood did.
[00:48:48]  July 2003.
[00:48:49]  Councilman James E. Davis arrives at New York City Hall with a guest.
[00:48:54]  Both men are carrying concealed weapons.
[00:48:57]  And in less than 30 minutes, both of them will be dead.
[00:49:06]  Everybody in the chamber's ducks.
[00:49:08]  A shocking public murder.
[00:49:10]  I screamed, get down, get down.
[00:49:12]  Those are shots.
[00:49:13]  Those are shots.
[00:49:13]  Get down.
[00:49:14]  A charismatic politician.
[00:49:15]  You know, he just bent the rules all the time, man.
[00:49:18]  I still have a weapon.
[00:49:20]  And I could shoot you.
[00:49:23]  And an outsider with a secret.
[00:49:25]  He alleged he was a victim of flatmail.
[00:49:28]  That may or may not have been political.
[00:49:29]  That may have been about sex.
[00:49:32]  Listen to Rorschach, murder at City Hall on the iHeartRadio app.
[00:49:35]  Apple Podcasts are wherever you get your podcasts.
[00:49:44]  There's two golden rules that any man should live by.
[00:49:48]  Rule one, never mess with a country girl.
[00:49:52]  You play stupid games, you get stupid prizes.
[00:49:55]  And rule two, never mess with her friends either.
[00:49:58]  We always say, trust your girlfriends.
[00:50:02]  I'm Anna Sinfield, and in this new season of The Girlfriends.
[00:50:06]  Oh my God, this is the same man.
[00:50:08]  A group of women discover they've all dated the same prolific con artist.
[00:50:13]  I felt like I got hit by a truck.
[00:50:15]  I thought, how could this happen to me?
[00:50:16]  The cops didn't seem to care.

=== Overseas Deals and Hemorrhaging (08:29) ===

[00:50:18]  So they take matters into their own hands.
[00:50:21]  I said, oh, hell no.
[00:50:23]  I vowed I will be his last target.
[00:50:25]  He's going to get what he deserves.
[00:50:30]  Listen to the girlfriends.
[00:50:31]  Trust me, babe.
[00:50:33]  On the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.
[00:50:46]  We're back.
[00:50:48]  So, yeah, it's really interesting.
[00:50:50]  There's like during this kind of period of time, Frank is also really willing to fuck over his other, like, the corporate ghouls who like make these moves possible.
[00:50:59]  One of the guys who basically funds his chapter 11 scheme is the chairman of a company called American General Harold Hook.
[00:51:06]  And he floats Frank the money to keep Continental going while he's like fighting with the unions.
[00:51:12]  And the understanding is that they will be partners in the airline business once it gets back in the black.
[00:51:18]  But Lorenzo doesn't sign anything with Hook.
[00:51:20]  Like it's a handshake deal.
[00:51:22]  And so as soon as the airline's making money again, Hook is like, well, yeah, now we're running this together.
[00:51:27]  And Lorenzo's like, what do you mean?
[00:51:30]  What do you mean?
[00:51:31]  You thought a handshake deal meant anything?
[00:51:33]  No, bro.
[00:51:34]  No, that wasn't even, that wasn't even to like seal the deal.
[00:51:37]  I was like, all right, see you later.
[00:51:38]  Put her there.
[00:51:39]  And then you left.
[00:51:39]  You had nothing to do.
[00:51:41]  No, dude, it's not even legal.
[00:51:42]  And it's because Hook has a lot of money.
[00:51:44]  They go to court over this.
[00:51:45]  And like a lot of the case winds up being around how he had used the word partner in these conversations.
[00:51:52]  And his argument is like when I said partner, that was like a colloquial term.
[00:51:56]  It's like partner.
[00:51:59]  Yeah.
[00:51:59]  Yeah, exactly.
[00:52:00]  Howdy, partner.
[00:52:01]  We're at Texas.
[00:52:02]  Howdy partner.
[00:52:03]  You know, yeah, with a, I feel like this.
[00:52:05]  We can go into business, partner.
[00:52:07]  Yeah, that's kind of what he does.
[00:52:09]  You could be my business partner.
[00:52:10]  Wait, so I could be your business or your business partner?
[00:52:12]  Okay.
[00:52:13]  So after he breaks the pilots' union and he wins this fight, scandals start to erupt that makes it clear how he had like done a lot of the business.
[00:52:21]  So one of the things that he does in order to get investments is he like makes these deals overseas while the problems are happening with like in like Australia to like run a bunch of, you know, get a bunch of routes for Continental.
[00:52:33]  And it comes out after the fact that like he had basically bribed the governor, the ceremonial governor of Victoria, which is a thing that exists with free flights in order to help him negotiate to get these routes.
[00:52:45]  And then it came out that the judge, the U.S., the federal judge who'd ruled on their chapter 11 case before it hit the Supreme Court, right after like the case goes Lorenzo's way, he quits being a judge and gets a job at the law firm that represented Lorenzo's companies.
[00:53:01]  So yeah, this is all fine.
[00:53:03]  Oh, yeah.
[00:53:05]  I mean, yeah.
[00:53:06]  I mean, he's at, he's got all the right moves.
[00:53:08]  Yeah.
[00:53:09]  Yeah.
[00:53:09]  He's, he's, it's going well for a while, but more acquisitions followed.
[00:53:15]  Like Frank kind of goes a little nuts after he he wins this Continental case.
[00:53:19]  And like, you know, as profits start to return, he starts getting more investments.
[00:53:24]  There's a lot of, you know, people are have a lot of confidence in him because he's this like union buster.
[00:53:30]  So he's able to like basically work his way into taking over Eastern Airlines next, which is the number three airline in the country.
[00:53:38]  So he is like, I think I'm like 20% or whatever.
[00:53:43]  Like one fifth of all air traffic in the United States is under Frank's personal control at this point.
[00:53:49]  But also Eastern is like bleeding money and all of his companies kind of are because after he's able to get these kind of like short-term investments and shit, it becomes clear that like, well, he's just made his airlines a lot shittier.
[00:54:03]  Like nobody actually likes flying on them.
[00:54:06]  So this, again, it's the same thing that had happened like a couple of years earlier.
[00:54:11]  Like he starts hemorrhaging money.
[00:54:13]  And I'm going to quote from a write-up on AVGihuri.com.
[00:54:17]  Lorenzo was so heavy-handed with subordinates at Eastern that in the end, the airline's employees basically put their own jobs on the line to get rid of him.
[00:54:24]  When he first arrived, he tried to turn the company around by incessantly hammering the unions to make concessions.
[00:54:29]  He enlisted the help of Eastern Airlines' managers who were company men and enforced what some called abusive policies against employees.
[00:54:36]  Workers were required to adhere to very strict rules and were written up for lying about non-existent medical conditions if they called in sick to work.
[00:54:43]  So many machinists were accused of theft and or drug use that in one year alone, 262 unionized machinists lost their jobs.
[00:54:51]  Psychological warfare was even waged on flight attendants who were forced to collect garbage on flights, a violation of their contract.
[00:54:57]  What if a flight attendant refused to act as a garbage collector?
[00:55:00]  They were fired on the spot for insubordination.
[00:55:03]  So Eastern gets combined with Continental Frontier and People Express.
[00:55:07]  And, you know, it's one of those things where like his constant cost cutting, like he's looking great on paper for a while, but everything starts to fall out, fall apart after this.
[00:55:16]  And Frank, you know, is squeezing these people so much that like eventually the Eastern Airlines Machinist Union goes on strike.
[00:55:25]  And up to this point, like 1989, every time the union employees had gone on strike against him, Frank had wound up just like beating the piss out of them.
[00:55:34]  So he's pretty confident.
[00:55:36]  George H.W. Bush is in the White House.
[00:55:37]  Now he's like, I got this stuff.
[00:55:39]  Yeah.
[00:55:40]  Hold my beer.
[00:55:41]  Yeah, hold my beer.
[00:55:42]  But Bush doesn't hold his beer.
[00:55:45]  He refuses to create a mediation board.
[00:55:48]  He basically says, no, the federal government's not getting in on this.
[00:55:51]  Like, you're going to handle this alone.
[00:55:52]  And this is when Frank thinks back to Andrew Carnegie.
[00:55:56]  So he hires mercenaries in order to like escort his employees off the airfields when they try to lock down the airfields at gunpoint.
[00:56:06]  Like he kind of goes like hard on this shit.
[00:56:08]  But again, without the government backing him, his heavy-handed tactics fail.
[00:56:13]  The pilots and the flight attendants unions are so like horrified by what he's doing that they go on a sympathy strike.
[00:56:19]  He hadn't thought this was possible.
[00:56:21]  He thought he broken them enough that this wouldn't happen, but they ground his entire, like Eastern Airlines, the third largest airline in the U.S., is grounded right after he buys it.
[00:56:30]  And this just causes a cascading like series of losses that sends him like bankrupts his companies, right?
[00:56:37]  Right.
[00:56:38]  Obviously, Lorenzo gets away rich, but he is, his empire gets broken up and sold off.
[00:56:43]  And like he gets forced out of aviation forever.
[00:56:46]  Part of why is that like the Scandinavians buy Continental Airlines, but they only do so like if the U.S. government will agree to ban Frank from working in the airline industry for a decade.
[00:56:58]  They're like, we'll pull your fat out of the fire, but you can't let this guy near an airline again.
[00:57:04]  Holy shit.
[00:57:06]  He tries two years later to create an airline called Friendship Airlines, but the Department of Transportation is like, absolutely not.
[00:57:14]  Like you nearly collapsed the entire industry.
[00:57:16]  We are never letting you anywhere near a fucking plane again.
[00:57:21]  And so he just spends the rest of his life as a rich guy.
[00:57:23]  He's got like a capital VC firm.
[00:57:26]  He still makes, he's still alive.
[00:57:27]  He still makes a lot of money, but he's not allowed near planes anymore.
[00:57:30]  Anyway.
[00:57:31]  Oh, yeah.
[00:57:31]  Now he's doing, oh, and look, just he's doing venture capital.
[00:57:35]  Yeah, he gets into VC shit.
[00:57:36]  He's doing private equity and private equity, as it always is.
[00:57:39]  As it always is.
[00:57:40]  The thing I learned was always like, whenever you think a business is like shitty, it's and like you're like, but this business was like so big.
[00:57:47]  What happened?
[00:57:47]  It's usually because private equity just bought it.
[00:57:49]  Yeah.
[00:57:50]  And it's like slowly being all the good shit is being pulled out.
[00:57:54]  There's no people working.
[00:57:55]  So if you like, when you'd go into like Toys R Us and it looks like a fucking spooky ghost town, it wasn't because like they were fucking up.
[00:58:02]  I mean, like, I mean, because they were profitable up until private equity bought them.
[00:58:06]  Yeah.
[00:58:06]  Private equity starts hollowing it out.
[00:58:08]  Yeah.
[00:58:09]  So it's good.
[00:58:11]  Yeah.
[00:58:11]  It is good.
[00:58:12]  I wonder.
[00:58:13]  Now I just want to know what fucking Frank Lorenzo was up to as Savoy Capital or whatever his fucking private equity firms up to.
[00:58:21]  Yeah.
[00:58:22]  Yeah.
[00:58:22]  Maybe that will be a story for another day.
[00:58:26]  Today was the tale of why airlines be that way.
[00:58:30]  Yeah.
[00:58:31]  Why do they?
[00:58:32]  Yeah.
[00:58:33]  Anyway, you got anything to plug, Miles?
[00:58:37]  Just go at Miles of Gray, wherever you see at-based apples.
[00:58:43]  Yeah.
[00:58:45]  Go to at Miles of Gray.

=== Coolzone Media Outro (02:32) ===

[00:58:48]  Listen to the daily Zeitgeist.
[00:58:50]  Yeah.
[00:58:51]  And I don't know.
[00:58:55]  I probably, I was going to make a joke about the pilots and the pipe bombs, but that's probably going to get us in trouble.
[00:59:00]  Probably.
[00:59:01]  Yeah, I would assume that's the same thing.
[00:59:01]  You still want to fly.
[00:59:03]  Yeah.
[00:59:04]  Anyway, ad-free, CoolerZone Media.
[00:59:11]  Whatever.
[00:59:11]  We're done.
[00:59:12]  Later.
[00:59:14]  Behind the Bastards is a production of CoolZone Media.
[00:59:17]  For more from CoolZone Media, visit our website, coolzonemedia.com or check us out on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.
[00:59:27]  When a group of women discover they've all dated the same prolific con artist, they take matters into their own hands.
[00:59:35]  I vowed I will be his last target.
[00:59:38]  He is not going to get away with this.
[00:59:40]  He's going to get what he deserves.
[00:59:42]  We always say that, trust your girlfriends.
[00:59:47]  Listen to the girlfriends.
[00:59:48]  Trust me, babe.
[00:59:49]  On the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.
[00:59:59]  What's up, everyone?
[00:59:59]  I'm Ago Modern.
[01:00:01]  My next guest, it's Will Farrell.
[01:00:05]  My dad gave me the best advice ever.
[01:00:08]  He goes, just give it a shot.
[01:00:09]  But if you ever reach a point where you're banging your head against the wall and it doesn't feel fun anymore, it's okay to quit.
[01:00:16]  If you saw it written down, it would not be an inspiration.
[01:00:19]  It would not be on a calendar of, you know, the cat just hanging in there.
[01:00:26]  Yeah, it would not be.
[01:00:28]  Right, it wouldn't be that.
[01:00:29]  There's a lot of life.
[01:00:30]  Listen to Thanksgiving on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.
[01:00:38]  In 2023, bachelor star Clayton Eckard was accused of fathering twins, but the pregnancy appeared to be a hoax.
[01:00:45]  You doctored this particular test twice, Miss Owens, correct?
[01:00:49]  I doctored the test once.
[01:00:50]  It took an army of internet detectives to uncover a disturbing pattern.
[01:00:55]  Two more men who'd been through the same thing.
[01:00:57]  Greg Lesby and Michael Mancini.
[01:00:59]  My mind was blown.
[01:01:01]  I'm Stephanie Young.
[01:01:02]  This is Love Trapped.
[01:01:04]  Laura, Scottsdale Police.
[01:01:06]  As the season continues, Laura Owens finally faces consequences.
[01:01:10]  Listen to Love Trapped podcast on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.
[01:01:17]  This is an iHeart podcast.
[01:01:19]  Guaranteed human.