Feature: Wednesday, March 20, 2003
CareFright Part 1

New choppers have brought some rough flying to North Texas’ premier air ambulance company.

By Betty Brink

On a blustery morning last November, a sleek new CareFlite helicopter began a rolling lift-off from the heliport on the 11th floor roof of Harris Hospital, a flight nurse and paramedic, but no patients, on board. The team was heading to home base in Grand Prairie after a training flight in the new Italian-built Agusta 109E, one of four of the choppers purchased almost a year earlier by the North Texas air ambulance company.

Even though the day was clear, winds were gusting to about 30 mph, not enough to be a problem for a seasoned pilot such as Philip O’Rear. He had been a helicopter pilot for 40 years, the last 16 flying emergency missions for CareFlite, with 10,000 accident-free emergency flying hours on his record. But on this morning, O’Rear was flying with only five and a half hours training time on the new and highly sophisticated aircraft that was replacing the old workhorse Bell 222U that he had been flying for years, a shift that one pilot described as akin to zooming overnight from the dark ages to the 21st century. Many of the pilots had been complaining that the five hours of in-air training allowed by CareFlite CEO Ed Majors was far short of what was needed to fly the ’copters safely.

Suddenly the helicopter shook hard enough to be heard by visitors on the hospital’s 10th floor, one of whom told investigators it made a noise “like a washing machine when it blows its belt.” Then it seemed to lose power, barely clearing the edge of the roof before coming down on a rooftop garage one floor below the heliport. The whole incident lasted about six seconds.

Within minutes, the craft was surrounded by emergency personnel, but there were no injuries — except to the $3.8 million Agusta, put into service the previous August. Its tail rotor gearbox had separated from the airframe, and the tail boom was severely damaged. The propeller had clipped a light pole, shearing off one of the main rotor blades and knocking the pole to the ground 10 stories below.

O’Rear’s medical crew and fellow pilots — as well as his attorney Jim Lane, a city council member with a commercial-rated helicopter license — praised the pilot for his skills in landing the chopper safely, turning a potentially fatal accident into one that only wounded CareFlite’s pocketbook. “He should have been given a damn medal,” Lane said.

Instead, within a month, O’Rear was out. Majors has declined to give reasons for the dismissal. But two of O’Rear’s ex-colleagues, former CareFlite pilots David Walton and J. R. Schmidtke, are convinced that O’Rear was ousted, not because of any mistakes that he may have made that day, but because his unscheduled landing brought unwelcome attention to the troubling safety history and unreliability of Agusta air ambulance helicopters. CareFlite pilots and the emergency medical crews who fly with them had been worried for months about the Italian choppers. In the months leading up to the Harris crash, Agustas had been involved in two fatal crashes, as well as a number of non-fatal accidents in this country and in Europe.

A month after the Fort Worth incident, the FAA added to those worries when it sent out an “emergency airworthiness directive” to owners of the Agusta 109E, ordering immediate implementation of a lengthy list of modifications and safety check procedures “before further flight.” FAA inspections had found that the tail rotor blades were vulnerable to fatigue failure that could cause “subsequent loss of control of the helicopter.”

Majors and Mike Taylor, the director of CareFlite operations and a pilot who also flies emergency missions, dismissed the safety concerns as overblown. “Airworthiness directives are sent out routinely,” Majors said. “We have made the necessary corrections on the rotor blades....We believe the Agustas are safe, or we would have never bought them.” He pointed out that the helicopter is being used by air emergency services all over the country.

Taylor said that most of the Agusta crashes were either pilot error or weather-related rather than the result of mechanical failure.

Still, Majors admitted that since the November crash, CareFlite has lost two of its top customers, Cook Children’s Hospital in Fort Worth and Children’s Medical Center in Dallas, due to worries about the Agustas. “We are no longer flying their neonatal teams,” he said, “because they had some problems about the accident” and questioned the reliability of the helicopters in meeting their needs.

The immediate cause of the November incident is still being sorted out by the National Transportation Safety Board. Taylor said he believes it was due to “pilot error.”

But Walton and Schmidtke believe the indirect culprit is the CEO, Majors, not a pilot himself, who insisted on purchasing the Agustas last year despite objections from his pilots that the aircraft were too fragile, too maintenance-intensive and unreliable for the tough, time-critical work required from air emergency helicopters. “We don’t set down very often on well-lit concrete runways, you know,” Schmidtke pointed out. But the worst thing about the Agusta, he said, is weight restrictions that preclude it from flying “any further than Mineral Wells or Sanger” without having to stop to refuel. “That’s simply intolerable, when five minutes or less can make the difference between life and death in our work,” he said.

Walton, the company’s former safety manager, said he, too, was forced out by Majors; Schmidtke quit a few weeks ago.

Before being hired in 1999 to run CareFlite, Majors’ only medical management experience came as director of a 200-bed hospital in McAlester, Okla. His inexperience, the pilots charge, is threatening the integrity if not the bottom line of the premier air ambulance service in North Texas. During his three-year tenure, they say, he has made secret deals to fire pilots and maintenance workers and sell their contracts to an outside vendor, gotten rid of knowledgeable employees he sees as threats, engaged in union-busting, helped cause a 50 percent turnover among workers, and lost the business of two of the company’s largest customers. Now, he is facing a possible pilot strike within the next month.

Majors said he regrets losing the hospitals but is confident they will return — and if they don’t, he said, CareFlite will survive. As to the other charges, he said, his decisions were all based on financial considerations. “I came here to find a company in bad financial shape. I had to make some hard business choices that many people do not understand.” The effort to outsource the pilots and mechanics was made to cut the company’s losses, he said. He would not discuss personnel issues. As for the union, he hopes to avert a strike but said he has contingencies that will keep the helicopters flying if the pilots do walk out.

He blames his troubles in McAlester on a board dominated by a mayor who disagreed with the direction he wanted to take the hospital. He did nothing wrong, he said, other than get caught in some political crossfire.

Still, a little due diligence on the part of CareFlite’s board before he was hired, his critics say, might have resulted in a different outcome. But no one from the board called Majors’ former bosses at the Oklahoma hospital to check his resumé. If they had, they would have discovered that he was fired as CEO there in 1996 in a nasty dispute that led to an even nastier lawsuit, growing out of management problems and peculiar financial deals that sound similar to the problems now surfacing here. “I sure wish someone down there had called,” the Oklahoma hospital’s board chairman, Francis Stipe, said. “We might have saved ’em some grief.”

“He’s not a people person,” McAlester Mayor Dale Covington said of his old nemesis Ed Majors. “Still, Ed and I were friends, until I found out he was trying to sell the hospital to a big hospital in Tulsa.” Covington has served as mayor of this town of 20,000 for nine years. “We wanted the hospital to stay in local hands,” he said. “It serves about 100,000 in this region and is the pride of southeastern Oklahoma.”

The hospital in question was the publicly supported, nonprofit McAlester Regional Medical Center, where Majors had served as CEO for 18 years, until his firing in 1996.

“I think he [Majors] had been here so long he started to believe [the hospital] was his, instead of the people’s, and he forgot that he worked for the board appointed by the mayor,” Stipe said.

But Majors found out who called the shots, the mayor said, when Covington and Stipe discovered in 1996 that Majors had been negotiating secretly to sell the McAlester facility to Hillcrest Hospital in Tulsa, in a deal that would have allowed Majors to stay on as CEO at a much higher salary.

The mayor quickly removed a couple of board members who were quietly supporting the move and appointed members who opposed it. Majors confronted the mayor at his business office and berated him publicly for changing the makeup of the board, threatening to “lay down the political gauntlet,” Stipe said. On Nov. 6, 1996, the new board fired Majors and changed the locks on his office.

Majors had prepared for that eventuality. A couple of months earlier, he had managed to get the former board to vote 7-2 to amend his contract, giving him $350,000 in compensation if he got fired — even for “good cause,” according to a lawsuit filed by clinic doctors to void the contract.

For years, Stipe and others said, there had been growing concern over the increased dissension among the rank and file at the hospital, and most of the turmoil was blamed on Majors’ management style. “He didn’t get along with the doctors or the staff. There was always controversy,” Stipe said. Majors was also away too much, he said, driving to Tulsa two or three days a week to go to law school.

People were also upset over Majors’ expensive office, where he had installed a sauna and a hot tub. However, city manager Randy Green, whose father had been the medical director of the McAlester hospital’s clinic, said, “If you had an appointment with him, he met you outside the office and never took you inside. Some people worked there for years and never saw the inside of his office.”

Majors didn’t go quietly. He sued the board for close to $1 million in federal court, claiming the hospital had violated his constitutional rights and the terms of his contract when he was fired.

In June, 1997, a federal jury voted against Majors, also voiding the severance package.

Majors said that the issues were all political, a disagreement between him and the mayor’s supporters on the board over the direction the hospital needed to take. “I had worked there 18 years,” he said, “and I had run the hospital efficiently. I had many supporters in the community, and still do. I was caught up in a political brouhaha not of my making.”

Not long after, he showed up in Dallas with a law degree from the University of Tulsa in hand and went to work as a legal intern at Baylor Hospital. Baylor is part of a consortium of hospitals, including Methodist and Presbyterian in Dallas, Arlington Memorial, and Harris in Fort Worth, that owned and underwrote CareFlite. In November 1999, the board hired Majors as its company president and CEO. Shortly after, in early 2000, the hospital group cut the financial umbilical cord, and the company became a “stand-alone” not-for-profit overseen by a board whose members are still appointed from the five hospitals. The 23-year-old firm now operates under the corporate name of North Central Texas Services.

Board chairwoman Lillie Biggins, a vice-president of Harris Methodist Fort Worth, said that Majors is doing a superb job running CareFlite, “an absolutely vital community asset.”

An emergency medical helicopter service is not like any other flying in the world, say the pilots who routinely perform these missions of mercy. More often than not, they head toward what they call a “go scene” on directions no better than those of a Vermont farmer: About a mile east of Everman on Old Shelby road at golf course near two-lane bridge across Village Creek ... look for red barn. Often, they must bring their helicopters down in a pasture, a back yard, or a clearing in some woods. They’d better know the territory — and the landmarks. It’s stressful work, but it can be the most rewarding flying job in the world, pilots say, when they can get a burned child to Parkland or a preemie no bigger than a bar of soap to Cook Children’s in time to give them a fighting chance to live.

CareFlite is the primary air ambulance service for 100 North Texas counties, responsible for “the great majority of emergency flights in and around Fort Worth and Dallas,” Majors said in a recent interview at his office at Grand Prairie Municipal Airport,

The service began in 1979 with one helicopter that was shared by Methodist in Dallas and Harris Methodist in Fort Worth. In 1988, Baylor and Presbyterian bought into the company; Arlington Memorial joined the consortium after its ownership was merged with Harris and Presbyterian under the umbrella of Texas Health Resources. Today, CareFlite is the third-busiest air ambulance service in the country. In 2000, tax records for the not-for-profit company show, it generated $26 million in revenues and had $18 million in assets. It employs 23 pilots and 89 others who operate a fleet of seven helicopters, one fixed-wing plane, and 16 ground ambulances out of bases in Fort Worth, Denton, Grand Prairie, and Dallas. It serves hundreds of hospitals and numerous fire departments and averages more than 3,500 helicopter flights a year. Its medical crews are considered some of the best in the country, the pilots said.

In order to do such good work, CareFlite needs top pilots, reliable choppers, and a company that pilots and medical crews can count on to ensure safe working conditions. But Walton, Schmidtke, and others say that since Majors took over in November 1999, helicopter safety has been called into question, and half the original workforce has left.

“If it weren’t for the folks in the trenches, the company couldn’t survive,” said Walton, who was chief of safety over all of CareFlite’s operations for seven years. “With all the bickering and funny business at the top, middle management has kept the place running, and the pilots and the medical crews are top-notch, the very best.” Only their professionalism in spite of so much chaos has maintained the company’s integrity in the eyes of the pubic, he said.

Walton has been a pilot since 1971. He spent “13 lonely months in Korea,” he said, before coming home to fly with an air ambulance service in his native Oklahoma. In 1990, he signed on with CareFlite and moved his family to Texas.

By 1994, after flying out of the company’s bases in Fort Worth, Dallas, and Denton, he was promoted to the post of safety chief for all of the CareFlite bases. His colleagues give him high marks for running a smart and up-to-date operation in which, as one pilot said, “nothing took a back seat to safety.” However, it wasn’t long after the CareFlite board hired Majors that Walton began to get worried.

“The first time I met him, in 1999, was at a reception at Bell Helicopter,” Walton recounted, “and when I went up to him, held out my hand, and said, ‘Hi, I’m Dave Walton, your safety manager,’ he looked at me, said nothing, and turned and walked away.” From that day until he was terminated in 2001, Walton said, “I saw him one time for 15 minutes. And I was part of his management team supposed to report directly to him.” But if a couple of snubs had been the only problems, he said, he would still be with the company.

Walton was terminated June 5, 2001, for insubordination. But he believes he was fired for openly questioning decisions by Majors that Walton said were compromising the safety of CareFlite’s fleet, pilots, crews, and passengers, as well as the financial health of the company. He now flies for Tulsa LifeFlite, owned by a Utah company.

Schmidtke, who flew for CareFlite for four years and was a leader of the pilots’ struggle over the past 18 months to organize a union there, began his career in 1977 as a Marine Corps pilot.

Negotiations between CareFlite and the pilots have been contentious, with the company refusing to negotiate on any of the pilots’ demands, from pay hikes to withholding union dues from their checks. When the company turned down the National Mediation Board’s offer of binding arbitration this February, the pilots threatened to strike at the end of March. “It will happen,” Schmidtke said.

“I hope with everything in my being that there is no stike,” Majors said. But if it happens, he said, his contingency plans are in place. Those include firing the pilots and hiring new ones. “Whatever it takes,” he said, “we will continue to fly.”

If the pilots do walk out, Schmidtke won’t be there to lead them. He quit two weeks ago to take a job with the State Department, he said, because he’d rather fly in the drug war in Colombia — where he is headed — than “put up with any more of the mess at CareFlite.”

That “mess,” as described in lengthy interviews with Schmidtke and Walton and a pilot and medical crew member who spoke only on condition of anonymity, began with one of Majors’ first decisions. The issue was whether to refurbish four aging Bell 222’s that CareFlite already owned, or to buy new aircraft to replace them. Ironically, it wasn’t pilots pushing for shiny new machines, but Majors.

The Bell 222’s were part of a fleet that also included two Bell 407’s bought in 1998 by Majors’ predecessor at a cost of $4 million, two Bell 206L3’s, and one German-American Eurocopter BK-117. (The German aircraft was owned by Mother Francis Hospital in Tyler, but was flown by CareFlite pilots after the company took over the Tyler hospital’s emergency service.)

The pilots wanted the 222’s refurbished, Walton said, because of their reliability and safety record. “It’s a very good aircraft,” he said. “It’s very reliable, easy to handle, and it had met all the medical needs of CareFlite for 10 years,” he said. The cost of the overhaul for the first chopper was $1.5 million, but Walton and others pointed out that the figure included parts and equipment that would be used for the other 222’s, meaning that the refurbishing bill for the other three helicopters would be reduced by several hundred thousand dollars apiece.

For safety reasons, the pilots also wanted to get the fleet down to only one or two types of aircraft, Walton said. With so many different aircraft in service, a pilot never knew what he’d be flying when he was called. “They were expected to jump from one aircraft to another and be proficient in all of them, which is difficult in the best of circumstances, and could be fatal when flying in emergency conditions,” the former safety director said. “When a pilot has to react quickly while in flight, what he does in one helicopter is not good for another, and he could react automatically, but wrongly, out of habit.

“It’s called ‘negative habits transfer’ in FAA safety manuals,” Walton said, a potential problem that the FAA had warned CareFlite about before Walton left. The agency had put the company on notice that its pilots might have to take additional proficiency flight checks if it continued to use so many different aircraft.

Majors, who initially approved the refurbishing of the first Bell 222, abruptly cancelled the work on the other three, telling his managers that the cost was too high. Walton disagreed with the decision in a managers’ meeting with Majors.

“That probably cost me my job,” he said. “But I couldn’t let it go by. The newly overhauled 222 was like a new plane. Those planes could have lasted for another 10 years.” Walton argued that, because the refurbishing costs were going to decrease with each helicopter, Majors should keep the 222’s and the new 407’s and get rid of the others to increase safety and cut expenses, as the pilots wanted.

He was verbally shot down. Although the CEO had no prior history in either aviation or medical emergency flying, Walton said, Majors told him, “This is not a safety issue, but a training issue.”

Majors said in fact that it was an economic issue. “You don’t refurbish without a cost. With the 222’s,” he said, “you still have a 20-year-old plane that Bell is no longer making parts for. Down time for maintenance could be very expensive. The 222’s weren’t cost effective for our needs.”

It was not long, however, before the pilots would suspect that work on the 222’s was cancelled because Majors had already begun negotiations to buy eight new aircraft, all from the Italian company Agusta.

But before that controversy came to a head, the CEO put his pilots and maintenance workers — the most critical employees of an air ambulance company — in another kind of jeopardy.

In early April 2001, Majors gave the pilots and mechanics notice that their employment with CareFlite would be terminated in 27 days and that their jobs — and all of the maintenance equipment — would be transferred to OmniFlite, an Addison company that provides contract workers to air ambulance services around the country. OmniFlite, in turn, would provide the services of the pilots and maintenance to CareFlite for a fee. Majors had signed a 10-year contract with the vendor after negotiations that began in January without the knowledge of any of the employees.

“I did not tell the employees until the decision was made, because it was not necessary,” Majors said. He did it with the full knowledge and approval of the board. “It was a business decision to save money.”

The news hit the pilots and maintenance workers like a bombshell, Schmidtke said. “Basically, it was, ‘If you guys want jobs, you will have to go with OmniFlite. If not, find other work.’ We were fired.”

The pilots hired a lawyer. “We found out that he couldn’t terminate us without giving us severance pay,” Schmidtke said, pay that, for the 23 pilots, would have totaled about $500,000. What Majors did not know, Schmidtke and Walton said, was that the pilots’ benefit packages, including the severance pay, were carried under Texas Health Resources, the hospital company that was a part-owner of CareFlite. The mechanics didn’t have that protection, so they now work for OmniFlite. But Majors was forced to either keep the pilots on his payroll or pay the half million. He kept the pilots — along with their deep enmity.(Click here to continue...)

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