AVIATION: Alas, Poor Yerex

Lowell Yerex had but $25 to his name when he founded TACA Airways. He built his Latin American airline into the world’s largest cargo carrier. But TACA remained a one-man show and Yerex made all the decisions. Last week it looked as if someone else had finally made a decision for tough, one-eyed Mr. Yerex. Out he went as president of TACA, the climax to a long struggle for control of the company.

Two years ago Yerex invited Transcontinental & Western Air, Inc. and other U.S. investors to buy into TACA. Yerex, a New Zealander, hoped this would bring him more American planes and landing rights—in effect, make TACA a U.S. flag line. When the U.S. was slow to get behind TACA, Yerex tried dickering with the British, tried to get them to buy out the American interests. This irritated TACA’s new stockholders, chiefly TWA and Pennroad Corp., an investment trust; so did Yerex’s highhanded way of running things. They began to bring him down to earth.

The first move against Yerex was the election of Pennroad President Benjamin Franklin Pepper as chairman of TACA’s board. Then in came ex-Brigadier General Tom (“There will be no weather”) Hardin as executive vice president (TIME, Nov. 12). Out went Yerex’s longtime personal assistant and fellow New Zealander, Edward W. Scott.

The showdown came last week at a conference in Havana. TWA and Pennroad bought out Yerex’s contract as TACA president for about $100,000, half what he would have received in the eight years the contract still had to run. In return, Yerex agreed not to operate airlines in TACA’s Latin American bailiwick for two years. He kept some $3,500,000 in TACA stock and a seat on the board of directors.

In TACA’s Manhattan office, bulky, genial Ben Pepper leaned back comfortably in the red leather chair once reserved for Yerex and took charge of TACA’s corporate and financial affairs. Soon a new president will be picked. Most likely candidates: Ben Pepper or Tom Hardin.

Would ex-Barnstormer Yerex be satisfied with a seat on the sidelines? Those who knew him well doubted it. Last week his longtime friend Ed Scott organized a Panamanian company to operate land, sea and air transportation lines.