Never underestimate the capacity of one man to make a difference. The pages of history make that clear and as the dust settles around the almost certain merger of American Airlines and US Airways next week, we are now discovering the instrumental work of one man in orchestrating this grand union. Should we be sending heaps of praise toward 56-year-old bankruptcy lawyer Jack Butler? Or imprecatory prayers?
The Wall Street Journal records this fascinating tale today, which I’ll excerpt here–
Mr. Butler, a 56-year-old bankruptcy lawyer, was instrumental in getting American Airlines’ parent AMR Corp. to the negotiating table with US Airways Group Inc. by prodding and coaxing Tom Horton, AMR’s chief executive, and his advisers. He also has pestered American’s unions and US Airways pilots and executives for over a year…
Companies under bankruptcy protection like to think they have wide latitude to control their reorganizations, especially because the law often prevents creditors from offering competing plans. But Mr. Butler’s relentless activism in the American case is a reminder that bondholders, employees and suppliers have the last legal word on what happens in a Chapter 11 case and can exert their will to influence the outcome.
Through Lyndon Johnson-esque politics (getting chummy with all sides through food and drink) and dogged determination (a mileage run of sorts, traveling over 7K miles in a week to convince pilots to approve a contract deal) Butler set the ground work for getting AA CEO Tom Horton and US CEO Doug Parker onboard the merger bandwagon. As the mercenary of the AA creditors, he already had them on his side. From there it was smooth sailing…
But here’s the thing about Butler–
The bespectacled Mr. Butler, a father of four with a powerful build and slicked-back white hair, was an unlikely choice to represent American’s creditors committee. He has mused to colleagues that he has terminated more pensions than any other lawyer in the U.S. Indeed, Mr. Butler advised Delphi Corp. and US Airways when they unloaded $6.2 billion and $2.5 billion, respectively, on the federal Pension Benefit Guaranty Corp., now his client as an AMR committee member.
In other words, he’s a slick lawyer whose track record suggests that like Gordon Gekko, “What’s worth doing is worth doing for money.” Now I am not alleging this is a zero-sum game, but count me among the skeptical. Horton and Parker will get huge payouts (as will Butler) and the workers cajoled so brilliantly by Butler into supporting a merger have the prospect of an airline that cannot viably keep a hub in both Los Angeles and Phoenix or Philadelphia and New York if it is to gain the synergies necessary to make this merger a (financial) success. I’m going to miss my US Air res agents. Shall we start taking bets on which stations which close first or how many “duplicative” or “redundant” jobs will be shed?
I like US Airways in Star Alliance, I like having more choice in domestic flying, more routes, and lower prices. So no, I am not at all happy about the latest engagement in the airline industry and will not be forwarding any wedding gifts to the bride and groom. But I’ve got to give credit to Butler for working his tail off to make this happen.
This merger was NOT inevitable. And yet it is happening in large part due to the vigilance of one person, one persuasive man. Truly we can all make a difference.
Again the words of Gordon Gekko seem apt–
The point is, ladies and gentleman, that greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind. And greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA. Thank you very much.
Those are not my words, but they seem to be the message emanating from all parties supporting this merger. Let’s hope the new AA doesn’t go the way of Bluestar Airlines…