United (Airlines) "likely" to end employee pension plans

[Scro]

Cash-strapped United Airlines said in a bankruptcy court filing today that it "likely" will be necessary to terminate and replace its employee pension plans.

The carrier cited the size of further cost cuts and the need to find bankruptcy-exit financing as reasons for such a drastic move.

The filing came a day before a federal bankruptcy court hearing on United's pension plans, which the company announced last month it would no longer contribute to while in Chapter 11. That action has been assailed by United's unions and challenged by the government's pension-protection agency as violating federal pension law.

In its court filing, United cited the government's recent decision to reject its bid for a $1.6 billion loan guarantee along with sky-high jet fuel prices. The Elk Grove Village, Ill.-based airline said it "must have the cash flow and liquidity that the financial markets are willing to finance."

http://www.denverpost.com/Stories/0,1413,36~33~2345685,00.html

[GainesT1958]

1. So they're going to sacrifice their employees' secure retirements...

To try and preserve what used to be the "largest airline in the free world"? Let their CEO take the first pension cut!x(

Doesn't sound too much like the "Friendly Skies" to me!:mad:

B-)

[Erika]

2. America's Standard of Living Declines under Bush

Bush has achieved income redistribution through his economic policies. He wants two classes, the poor and the elites.

What is this country going to do to take care of these employees who in good faith signed up for a career with an employer because one of the benefits was a pension plan? Bushco is screwing the working class to a degree never known before.

[Booster]

3. Then every employee should quit and let this

stupid company figure out how to fly without them. I didn't read the article, but does this include higher management as well? I kind of doubt it.

[Erika]

7. CEO's Pension Benefits Exempt From Bankruptcy Laws

They have it drawn up where they will get theirs and evidently it's fine under current bankruptcy laws.

[mn9driver]

9. I would love to quit.

But I'm a part of an industry where "lateral mobility" doesn't exist--except for the executive class. I've spent 23 years building a career at my airline; assuming I could even get hired somewhere else, I would be required to start "at the bottom".

I'd rather sell shoes, flip burgers, or greet shoppers at WalMart than go through that "dues paying" again, only to have it snatched away.

[fortyfeetunder]

4. Harbinger of things to come

If UAL is allowed to end employee pensions, then you can expect other companies to follow suit. Next comes the trashing of 401(k)'s.

The young folks need to look at this closely and think very seriously how they plan to save for their retirement. I doubt if there will be a safety net for them.

[mn9driver]

5. This is going to become a major issue, soon.

As United goes, so will Delta, Continental, Northwest and all the rest of the "old" carriers: into Chapter 11 bankruptcy.

Why?

Pensions. These corporations made promises to their employees that they no longer wish to keep. So, into chap. 11, force the plans into distress terminations, and let the taxpayers pick up the tab via the Pension Benefit Guarantee Corporation (PBGC).

The bill will be huge. If all the majors use this ploy--and it is beginning to look as if they're lining up--the PBGC will be on the hook for the better part of $100 billion by the time it's over.

But here's the REALLY good news: even after the taxpayers pick up this gigantic tab, the employees still end up getting screwed. Only those within three years of retirement will get anything---and they will get pennies on the dollar of what they were promised.

The rest of us will get nothing. Except we get to keep our jobs. For less pay. For now.

[GaryL]

6. Can you say ERISA?

ERISA laws are absolutely nasty and UA can't just up and cut pension benefits, even in Chap. 11. UA is "likely" to loose and cease to exist.

[mn9driver]

10. USAir has already terminated their pilots' pension plan

as part of their previous Ch.11 reorganization. Pilots are required by FAA regulation to retire at age 60, which the PBGC considers "early". Hence, the maximum payout was $28,800. To people very close to retirement who had been promised three to four times more. The rest, who were not close to retiring, got nothing.

[DemoTex]

12. That is me, my friend.

US Airways captain. Screwed and about to be screwed again.

[mn9driver]

13. I see that Bronner is now talking about Chapter 7.

After which, he'll buy the assets and start "Bama Air".

http://biz.yahoo.com/rb/040819/airlines_usairways_bronner_2.html

Did you ever notice that "David Bronner" and "Frank Lorenzo" have the same number of letters? Also that "Texas Air" and "Bama Air" are eerily similar?

The Eastern folks got screwed under pappy Bush. I guess junior has to make sure he gets to do it, too.

Hope you get to hang on to some of what you earned.

[DemoTex]

14. "DR" Bronner = Frank Lorenzo

I'll hang on to nothing from my years of service to Piedmont and US Air. It is gone my friend. And the PBGC is bankrupt under Bu$h.

Thank god for Dr. D's strong income and my long years as an aviation writer. Things will be bad for a while though.

Again, to the west coast DUer who knows who he is: Wallow in your Schadenfreude, dude. Try to get to NYC when three major airlines go Tango Uniform.

[DemoTex]

8. Three airlines are scrambling to screw employees under Bu$h.

It's like they know a more labor-friendly administration is right around the corner.

Delta lost $1.9 billion last quarter (that's almost a million an hour!). UAL is still in Chapter 11. US Airways is threatening liquidation. A DU poster (Californian), who I will not name, gloated on that news a couple of days ago. He/She knows not of what he/she speaks. We have three carriers that serve millions of passengers and many communities on the brink. Those three carriers could all be out of business by 12/31.

The Bu$h administration would love it. It is all about labor-bashing. The fuel costs are due to Bu$h war and energy policies. The load problems are due to Bu$h regime scare tactics. Who wins? Texas airlines. And foreign airlines if Bu$h gets four more.

[Erika]

11. W's Income Redistribution Plan

And employees suffer and CEO's profit. I empathize with the poster who worked for 23 faithful years to an employer only to see their benefits and self worth tossed aside.

[mitchtv]

16. well this Californian supports airline workers

especially since the flight attendants have joined with CWA. I know communication workers are right behind you guys.

[Chovexani]

15. I know of whom you speak

That was an ugly, ugly thread.

My thoughts and prayers are with you, friend. The Chimp won't rest until ALL of us are on bread lines.

[demoman123]

17. Accrued pension benefits could be hit next

Later in the story:

>>>"We have taken every effort to restructure our business without affecting accrued pension benefits, and will continue to explore every other option," the company said in the 26-page filing.<<<

In other words, they are considering it.

[DemoTex]

18. Airline pensions are history ...

US Airways set the example by getting the BK court to terminate the pilots' pension plan on 3/31/2003. The Bu$h administration turned their pointy heads, and other industries are drooling at the prospects now. The fucking cat is out of the bag. This is the biggest assault against the middle class, ever. Stupid, stupid airline pilots think they are white-collar workers that Bu$h will protect. Dumb fucks. Quote me.

[Moderator]

19. Duplicate

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=102&topic_id=763370