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http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=8447088

Judge clears UAL deal with US to terminate pensions
Tue May 10, 2005 06:50 PM ET
CHICAGO, May 10 (Reuters) - A judge approved a deal on Tuesday between bankrupt United Airlines and the government that will let the carrier terminate its pension plans and save about $645 million annually over five years.

No. 2 United, a unit of UAL Corp., will grant the federal Pension Benefit Guaranty Corp. up to $1.5 billion in securities to settle the agency's main claims in bankruptcy court and clear the way for it to assume control of the four plans.

This could set a very, very dangerous precident. I can see GM leaping at the chance to have a go at cutting their pension program, along with many other US corps.

Thoughts?

 

[Phoenix]

No no no no no!

WTF is wrong with people? Jesus and from someone who is supposed to protect the people from this sort of bullshit!

A business operates in this country at its own risk! The government should not be tossing pensions for people who have been working towards that goal and may have given up other options due to that contractual promise from their employer. If the business gets in trouble, fine - pay off your pension plans and your debtors and go away. That's the way its supposed to be.


Such complete pandering .....

 

[Agent Icebeezy]

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=8447088



This could set a very, very dangerous precident. I can see GM leaping at the chance to have a go at cutting their pension program, along with many other US corps.

Thoughts?

I work for Ford. I saw this coming a mile away

 

[way more]

Welcome to George Bushs' America.

 

[Agent Icebeezy]

This is going to get much worse, why i'm going back to school to finish my degree in the fall. This is only the beginning

 

[Loki]

No no no no no!

WTF is wrong with people? Jesus and from someone who is supposed to protect the people from this sort of bullshit!

A business operates in this country at its own risk! The government should not be tossing pensions for people who have been working towards that goal and may have given up other options due to that contractual promise from their employer. If the business gets in trouble, fine - pay off your pension plans and your debtors and go away. That's the way its supposed to be.


Such complete pandering .....

100% agreed.

 

[Pimpwerx]

Well, if they'd just voted to privatize social security, then this wouldn't matter, right? I mean, you put you money in private accounts and _____ and then you make a bunch of money to retire. It's just good business sense. When will people learn? PEACE.

 

[Tamanon]

I'm pretty sure Sears cut their Pension plan recently also. Most companies nowadays aren't even offering them, instead going the 401(k) route. Pensions are a dying breed.

*hugs his Citigroup pension*

 

[DarkAngelYuna]

"I'm pretty sure Sears cut their Pension plan recently also."

Yup we did..

 

[shoplifter]

While I can't find it in that article or one in the NYT, the BBC said that (not surprisingly) management pensions are unaffected.

Fuck em, I hope that they follow through and strike.

 

[Maxwell House]

Pension plans are definitely on their way out. Penion plans just cost too much. Did you know that GM's pension plan is their biggest expense, more than materials and labor to produce cars?

The results of a Prudential Financial study state that pension and retiree benefits represent $631 of the cost of every Chrysler vehicle, $734 of the cost of every Ford vehicle, and $1,360 of the cost of every GM car or truck

http://www.lewrockwell.com/north/north297.html

That is an absurd expense. Companies will continue to go towards a more lucrative 401 K plan.

 

[SatelliteOfLove]

Welcome to George Bushs' America.

It doesn't matter; what's really sad is most airlines are facing the same problem; they may become all Amtrak-ified if they get to reliant on government hand-outs. Competition, pensions, jet fuel prices spiking; it all contributes.

 

[Phoenix]

Pension plans are definitely on their way out. Penion plans just cost too much.

That's fine - no new employees should be eligible for them, but for people who have sunk their lives into a company expecting a pension because that was part of the benefits package? Sorry - it just sucks donkey balls for someone to say 'well, sorry but you aren't getting what you are contractually entitled to'. These sorts of things are happening with alarming regularity. Companies are declaring bankruptcy to shed millions of dollars of debt and obligation, while at the same damn time consumers are being screwed out of the ability to do the same thing.

If consumers have to suck it up and pay for their bad decisions, then so should corporations. Corporations are not entitled to any special treatment under the law so that they can correct their bad decisions, while the people at the top sit penalty free.

THIS SUCKS!

 

[StoOgE]

Yeah, if GM goes (they likely will) every other major manufacturer will likely follow to stay competitive on the market, and the entire pension system could go bankrupt. Hooray.

 

[AB 101]

Damn unions will drive all corporations to the brink eventually.

 

[ronito]

Don't give me the whole "rising cost of fuel and operations" bit. What a bunch of bull. This is just corporate america in its race to the bottom line. You adapt with the times, if the cost of rising fuel and operations was the cause then all airlines would be going bankrupt, which is definetly not the case, where a lot of them are actually quite profitable. Smart companies find ways to adapt and evolve. United was done to death by its fat management, and its unwillingness to change and its corporate greed and now the workers have to pay for it. Thank goodness the government is there to protect them!...wait...it didn't....Well at least social security will be there for them!....wait....it wont...oh...this is bad.

 

[sprsk]

i hope they dont strike till after e3, im flying united :/

 

[StoOgE]

i hope they dont strike till after e3, im flying united :/

got stranded in Chicago in 2000 because their mechanics were on one of those slow work strikes.. then a blizzard type thing hit (Im from Texas, so take that with a grain of salt, I thought flurries were blizzards when I first got there) and we got stranded in the airport for a few days... me, having not traveled much, was in shock when I went to the Hilton at O'haire only to discover all the rooms in any nearby hotel was booked mear hours after the airport was shutdown.

 

[Macam]

This does suck, and I completely agree with Phoenix on this. I spotted this story yesterday...here's an excerpt from TP's story (Source: http://thinkprogress.org/index.php?p=838) on it:

United Airlines is trying to dump its pension plan. That’s right, the company wants a judge to approve the default and let it shift its pension plan to the Pension Benefit Guaranty Corp. If that happens, United workers will lose about a quarter of their total pensions.

Pensions aren’t a handout for retired workers. They are money that’s owed to them. Workers take smaller salaries in return for better pensions; as American Progress economist Christian Weller explains it, taking that money away is akin to your boss paying you $20,000, then turning around a year later and demanding $2,000 of that money back. It’s just wrong.

It’s not the first promise United Airlines has broken to retirees. In 2003, the company sweet-talked about 2,500 flight attendants into taking early retirement (Link:http://www.afanet.org/default.asp?id=374), telling them if they retired early, they could keep better health benefits. A few short months later, all but yelling, “Suckers!", United doublecrossed the former workers, cutting those very same health benefits.

 

[Maxwell House]

Oh, I definitely agree that it sucks for people who depend on a defined benefit plan for their retirement. It really is a terrible situation.

And it is true that the benefit you get from a 401 K plan isn't anywhere near the benefit you would get under a defined benefit if you are a long tenured worker. Company matching is nowhere near the same benefit.

But with competition with foreign corporations out there, I don't see how traditional defined benefit plans can survive.

 

[SatelliteOfLove]

Don't give me the whole "rising cost of fuel and operations" bit. What a bunch of bull. This is just corporate america in its race to the bottom line. You adapt with the times, if the cost of rising fuel and operations was the cause then all airlines would be going bankrupt, which is definetly not the case, where a lot of them are actually quite profitable. Smart companies find ways to adapt and evolve. United was done to death by its fat management, and its unwillingness to change and its corporate greed and now the workers have to pay for it. Thank goodness the government is there to protect them!...wait...it didn't....Well at least social security will be there for them!....wait....it wont...oh...this is bad.

Have you read the business section of your local newspaper/Wall Street Journal in the last 10 years? Even Delta, (who I have frequent flyer miles with and who usually has nearly to completely full planes when I fly), is bleeding red ink from financial sucking chest wounds.

 

[videogamer]

Have you read the business section of your local newspaper/Wall Street Journal in the last 10 years? Even Delta, (who I have frequent flyer miles with and who usually has nearly to completely full planes when I fly), is bleeding red ink from financial sucking chest wounds.

He may be talking about companies such as Southwest and Jet Blue which do well. Of course, they don't deal with overseas flights, older planes.. and list goes on.

 

[Phoenix]

He may be talking about companies such as Southwest and Jet Blue which do well. Of course, they don't deal with overseas flights, older planes.. and list goes on.

There are some airlines that are doing very well because they are lean, they have reasonable routes, and aren't paying obscene fees to keep other airlines out of their hubs (ask JetBlue what happened to them flying out of Atlanta).

 

[Phoenix]

Oh, I definitely agree that it sucks for people who depend on a defined benefit plan for their retirement. It really is a terrible situation.

And it is true that the benefit you get from a 401 K plan isn't anywhere near the benefit you would get under a defined benefit if you are a long tenured worker. Company matching is nowhere near the same benefit.

But with competition with foreign corporations out there, I don't see how traditional defined benefit plans can survive.

You are headed to the dark side - quickly. What you suggest is the slippery slope to some of the worst that corporate America has ever had to offer - like the Ford Pinto where Ford knowingly kept a product on the market due to market competition knowing full well that it could (and did) lead to the deaths of customers. They let competition dictate that they should throw ethics to the winds.

 

[reggieandTFE]

Damn unions will drive all corporations to the brink eventually.

Of course it's the greedy workers fucking over these giant benevolent corporations, not shitty management that doesn't plan beyond next quarter's financials. And despite the fact that Southwest Airlines is the most heavily organized company and still makes the a shit load of money, it's always the greedy mechanics, pilots and stewardesses' fault.

When the right finally gets around to passing their national right-to-work bullshit and ten years later every fucking American is making wal-mart wages and the US healthcare system has imploded, I wonder how the assholes are going to blame it on unions then.

 

[Tamanon]

Of course it's the greedy workers fucking over these giant benevolent corporations, not shitty management that doesn't plan beyond next quarter's financials. And despite the fact that Southwest Airlines is the most heavily organized company and still makes the a shit load of money, it's always the greedy mechanics, pilots and stewardesses' fault.

When the right finally gets around to passing their national right-to-work bullshit and ten years later every fucking American is making wal-mart wages and the US healthcare system has imploded, I wonder how the assholes are going to blame it on unions then.

Unions and workers have become totally separate entities. Don't mistake the two.