By Ted Reed12/24/12 - 06:05 AM EST
|
|
|
"Putting
together any merger is difficult," said Colodny, who is 86 years old and
sharp as a tack, in an interview. "When you have large organizations
like this, it's (hard) to try and figure out where the future is going to
be."
|
Nevertheless, Colodny said the impending merger between US Airways and American(AAMRQ.PK)
will "probably be a great combination if it does occur -- just don't
expect (a successful
integration) to happen in six weeks or six months."
"American has a very proud heritage going back to its earliest
days, and US Airways is equally proud if not more so," he said. "It
had to come up the hard way because it did not start out as one of the chosen
trunk airlines; it was a small regional carrier."
Colodny joined US Airways-predecessor Allegheny, previously called All
American Airways, as its first staff attorney in 1957. The carrier had begun
flying passengers in 1949. It was based at National Airport and had routes from
Washington north to Buffalo and west to Pittsburgh.
Colodny was deeply involved in four mergers starting in 1967, when
Allegheny merged with Indianapolis-based Lake Central Airlines. At the time,
the Civil Aeronautics Board encouraged mergers to reduce subsidies. "Lake
Central was the easiest, a friendly deal with few problems," he said. In
1971, Allegheny merged with Utica, N.Y. -based Mohawk Airlines. "Mohawk
was in trouble and the banks forced it into a merger," he said. "It
worked out fairly easily."
In
1987, USAir bought PSA. "That worked out easily too," Colodny said.
"They wanted to do it. But from a cultural standpoint, there were
differences, and when we took the smile off the PSA planes, there were screams
up and down the West Coast."
The fourth and best-remembered USAir merger came in 1987 with Piedmont
Airlines. Today, it is often cited as an example of an extreme case of
corporate culture clash. As Jerry Orr, director of Charlotte Douglas
International Airport, once said: "When you buy somebody, you ought to
save the good parts and throw away the bad parts, but USAir did the opposite."
Orr added: "They thought the sun rose and set in Pittsburgh."
Colodny said the merger was not so bad, despite the challenge of
merging two successful
airlines. "There was a very proud group of employees and managers at
Piedmont," he said. "They had built a wonderful airline and they
weren't anxious to lose their identity. As with many things, there was
emotional resistance, and they thought US Air people were imposing USAir
operating policies on their systems.
"But it did come together," he said. "When we merged
with Piedmont we doubled the size of the airline and Charlotte became a
wonderful hub."
Still, leadership conflicts simmered. A few years before the buyout,
USAir had sought a friendly merger. "It fell apart largely over the issue
of leadership," Colodny said. At the time, Bill Howard was Piedmont CEO.
"I was willing to let Bill be CEO first for a couple of years, but then,
at 65, he would retire and
become chairman and I would take over as CEO. But he claimed he had a deal with
his board to be CEO until he was 67. I said 'I am sorry, I can't buy that deal'
and we walked away from each other." When US Air acquired Piedmont, Howard
left. Recalled Colodny: "I would not say we parted on lovey-dovey
terms."
Additionally, Colodny said, a dispute with the International
Association of Machinists made it difficult to merge work forces. And one other
thing: a small, Phoenix-based airline slowed things down. The airline was
America West, and CEO Ed
Beauvais thought he could obtain slots at Washington National as part of a
merger divestiture. "He went to court to try to break up the merger,"
Colodny said: "It caused a delay; we lost over a year. That particularly
hurt the Piedmont operation because management people started to defect."
| Now the America West people, who have run US Airways ever since a 2005 merger, have more slots at Washington National than they ever dreamed of. They also have bigger fish to fry. |
No comments:
Post a Comment