SPECIAL REPORT

THREE IS A COMPANY

AN UNLIKELY TRIO STRIVES TO A DEAL

DEIRDRE McMURDY August 10 1992
SPECIAL REPORT

THREE IS A COMPANY

AN UNLIKELY TRIO STRIVES TO A DEAL

DEIRDRE McMURDY August 10 1992

THREE IS A COMPANY

AN UNLIKELY TRIO STRIVES TO A DEAL

At first glance, their clashing personal styles and corporate histories make them an unlikely trio for the task. But Claude Taylor and Hollis Harris of Air Canada and Rhys Eyton of PWA Corp. may be ideally suited to devise a new course for Canada’s airlines. Indeed, their careers, backgrounds and personalities represent a microcosm of the contrasting strengths and weaknesses of the industry itself. Last week, as genial Maritimer Taylor, Air Canada chairman, his brash American colleague Harris and steely accountant Eyton, chairman of PWA, met to discuss a possible merger of the two companies, it became apparent that blending the distinct qualities of those individuals could become as critical to a successful transaction as the ultimate amalgamation of financial statements and capital assets.

Taylor, 67, represents the serviceand people-oriented aspects of the airline industry, as well as its regional roots. Raised in rural New Brunswick during the Depression, he started work after completing high school, and at 24 joined Trans-Canada Air Lines, the precursor of Air Canada, in Moncton. In 1950, Taylor moved to the airline’s Montreal head office and began his corporate ascent. When he took command of Air Canada in 1976, low employee morale and a reputation for poor service had earned the Crown corporation the nickname Air Ugly. He set to work restoring the airline’s lustre, a challenge that grew more pressing

two years later when the United States deregulated its airlines, foreshadowing a new era of North American competition. Connections: Despite the changes that he wrought at Air Canada, including some drastic layoffs since its privatization in 1988, Taylor is known among employees for his kind manner. A devout Baptist, he spends time away from the office with his children and grandchildren or putters in the garden of his modest home in suburban Montreal. His self-effacing style, however, belies his powerful network of connections in Ottawa. In 1970, after six years in Air Canada’s marketing division, Taylor became vice-

president of government relations and learned to navigate the murky waters of federal politics. He remains close to allies who include Finance Minister Donald Mazankowski; both men share the same vision for a deregulated airline sector and a privatized Air Canada.

tives who run competing airlines in America. On his first day in his new job, just hours after he had moved to Montreal, Harris created a cross-country furor by bluntly stating that there was only room for one domestic airline. He also insisted that PWA had to merge with Air Canada to survive. But a month later, PWA broke off initial negotiations.

Blunt: For his part, Hollis Harris, 60, the Georgia native who took over the job of president and chief executive officer of Air Canada in February, is a foil for Taylor’s engaging nature. His aggressive public stance, while somewhat jarring by Canadian corporate standards, is the product of 37 years in the cutthroat U.S. airline sector. And it represents the style of execu-

An aeronautical engineering graduate from the Georgia Institute of Technology in Atlanta, Harris spent 33 years in progressively senior positions in that city at Delta Airlines. By 1987, he was president and chief operating officer of the airline and, in 1990, he moved to Houston’s Continental Airlines as chairman. Continental, however, was already teetering on the brink of bankruptcy and Harris resigned within a year. Vision: But at least one analyst, Frederick Lazar, an economics professor at York University in Toronto, expressed skepticism that Harris and the two former Delta colleagues that he recently recruited to Air

Canada are in a position to contribute to the company’s salvation. “The U.S. experience is very different from the Canadian,” said Lazar. “They have the huband-spoke system of airports and we have linear routes.” Delta, he added, is a smaller-scale domestic carrier with no unionized employees, while Air Canada is international and has powerful labor unions.

The final member of the trio is Rhys Eyton, 56, a man whose vision of a strong second national airline has crumbled. He is a chartered accountant, and his success in forging an international air carrier from an amalgam of western regional airlines is mainly the result of his abili-

After earning a bachelor’s degree at the University of British Columbia, Eyton went on to obtain a master of business administration degree from the University of Western Ontario in London in 1958. From an accounting firm, Thome Riddell and Co., he was hired as an assistant to the vice-president of finance at Pacific Western Corp., which later became PWA, in 1967. By 1976, he was president.

Eyton and Taylor differ the most in their relations with company employees. While Taylor is viewed as warm and engaging, Eyton is more frequently described as aloof. He has surrounded himself with a tight group of young executives and he delegates the more operational aspects of the business to them.

Now, after years of competing head-to-head in the Canadian market and contesting lucrative international routes, including PWA’S route to Japan, one of the principal challenges for the three executives over the next several weeks will be to overcome their differences and to forge a competitive new airline from their respective strengths. It will be up to the trio to triumph.

ty with figures. He is able to dissect balance sheets at a glance. But according to some industry analysts, such a strong financial orientation could limit the airline’s ability to develop the standards of service required of a major international carrier.

DEIRDRE McMURDY