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 WASHINGTON, Nov. 15 /PRNewswire/ -- The Air Line Pilots Association issued the following:
 Hearings on Frank Lorenzo's application to start a new airline resumed today with scathing testimony from a former head of Continental Airlines who said that Lorenzo is not fit to run any airline.
 "I found Mr. Lorenzo to be inattentive to matters of safety, dishonest in his dealings with both employees and management, disruptive of the smooth operation of a corporation and generally unqualified to carry out the duties with which he had been charged," said Joseph Corr, who was chairman and president of Continental Airlines under Lorenzo.
 Corr's statement (along with the others cited below) was part of proffered testimony submitted as part of the fitness hearings for ATX, Lorenzo's new airline. The hearings are expected to continue in Washington for most of this week.
 "He seemed to believe that honesty and integrity were signs of weakness rather than virtues necessary for the effective management of an organization. In addition, Mr. Lorenzo was rarely inclined to live up to contracts or agreements he viewed to be disadvantageous ... He once told me that 'contracts are no more than the basis for a suit,'" Corr said.
 Corr cited numerous examples of Lorenzo's confrontational style that lead to chaotic conditions in corporate offices, in labor relations and in airline operations.
 In one typical example, Corr countermanded an order that pilots hired by Eastern during the machinist strike be passed into succeeding phases of training even though they had not completed the prior phases. "A short time later, Frank Lorenzo called me to insist that Continental pass Eastern pilots who had not successfully completed the training syllabus. He was furious when I would not comply with his demands," Corr said. Corr eventually left Continental after Lorenzo gave him an ultimatum to follow his directions or resign.
 Capt. Henry Duffy, a retired airline pilot who was president of the Air Line Pilots Association during the Continental Airlines pilot strike of 1983, said in his proffered testimony, "During the eight years that I served as president of ALPA, Mr. Lorenzo sought to repudiate every collective bargaining agreement between his companies and ALPA, and in general, presided over the worst labor relations in the country." ALPA represented Continental pilots at the time.
 Duffy recited a long history of double-dealing, evasion and stonewalling from Lorenzo. One of the most egregious examples came shortly after Lorenzo acquired Eastern Airlines and acknowledged the labor agreement that the previous management had signed just before the sale. A few months later Lorenzo was in federal court claiming that there was no labor contract. The court totally rejected Lorenzo's claim.
 Union grievance and arbitration procedures ground to a standstill as the company defied the labor contract, federal labor law, arbitrator's decisions, and even court orders. "I have never encountered another senior management individual so unwilling to abide by his statutory and contractual obligations ... I believe that Mr. Lorenzo does not have the compliance disposition necessary to run an airline," Duffy said.
 -0- 11/15/93R
 /NOTE TO EDITORS: Corr and Duffy are scheduled to take the stand today. The following witnesses will follow throughout the week. Capt. Don McClure, a retired Eastern Airlines pilot who was very active in safety matters before and during Lorenzo's ownership, describes in his proffered testimony numerous instances of compromised safety after Lorenzo took over. He describes how the company pressured pilots to accept aircraft with inoperative equipment and instituted a sick leave policy that pressured pilots to report for work when sick. Eastern used a carrot-and-stick approach involving discipline and cash bonuses to pressure maintenance supervisors into pushing aircraft into service before all maintenance work had been completed.
 The FAA eventually shut down Eastern's New York maintenance base for continuing violations, and in an unprecedented action, Eastern later pleaded guilty to federal criminal charges for maintenance violations and a fraudulent cover-up.
 Jalmer Johnson, head of the Air Line Pilots Association's Economic and Financial Analysis Department, describes in detail the corporate machinations and chaotic finances that characterized Lorenzo's airline operations.
 "An objective review of Mr. Lorenzo's airline career shows that he does not have the required expertise; in fact, that review reveals an unrivaled litany of failure: companies under Mr. Lorenzo's control have lost billions of dollars of investor, creditor, and employee funds; at his hands tens of thousands of people have lost their jobs; every major airline which Mr. Lorenzo has controlled has been put into bankruptcy; Mr. Lorenzo was removed from control of Eastern by a bankruptcy judge, based on clear and convincing evidence of 'incompetence'; and he was engaged in self-dealing transactions that transferred hundreds of millions of dollars of assets from Eastern. Mr. Lorenzo is truly without peer in the breadth and depth of financial mayhem he has wrought upon the airline industry," Johnson states.
 James Mackenzie, a Continental Airlines pilot who flew for People Express Airlines when that carrier was absorbed by Continental, describes how Lorenzo broke promises to People Express pilots regarding their integration into the Continental pilots' seniority list. "This arrangement effectively devalued our seniority, putting many of our pilots in the position of newly hired pilots compelled to take only those routes, aircraft positions, schedules and vacations that no existing Continental employees in our status found desirable," Mackenzie states.
 People Express pilots sued Lorenzo's airlines. The court found that Lorenzo had breached his promises and ordered an arbitration to merge the seniority lists of the two pilot groups.
 The hearings were resumed in Washington after a two-month delay. The administrative law judge hearing the case had halted the proceedings and issued a recommendation to deny the ATX application based on evidence and the company's behavior up to that point. The DOT did not accept the recommendation but ordered that the hearings be resumed so that the unions could present their case and a full record be developed prior to a final decision.
 In ALPA's view, all of the above proffered testimony points to the inescapable conclusion that Frank Lorenzo does not meet the statutory requirements for fitness to operate an airline.
 The statements quoted above are characterized as "proffered testimony" because they have not yet been accepted in evidence by the administrative law judge, who will rule on them individually. However, they are an accurate reflection of the material submitted. Copies of the statements are available from the Air Line Pilots Association on the day that each witness takes the stand./
 /CONTACT: John Mazor or David Mallino of the Air Line Pilots Association, 202-797-4060/ CO: Air Line Pilots Association; Continental Airlines ST: District of Columbia IN: AIR SU:

MH-DC -- DC034R -- 7668 11/24/93 13:17 EST
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Publication:PR Newswire
Date:Nov 24, 1993

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