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As US Airways Plans a Sixth Merger, Ed Colodny Recalls the First Four

During the 1980s, Colodny also engaged in merger discussions with Continental, Eastern, Northwest and United (UAL - Get Report). "We saw we had to bulk up or we would not go anywhere," he said. "We came close with Continental."

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."
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