The execs make a bundle...worker's lose their pensions and everybody's happy !
Isn't it funny how the REPUBLICANS made it harder for the "little guy" to declare bankruptcy but it's still the answer for big corporatins who want to screw their employees as best they can !
posted on June 13, 2005 07:31:13 AM new
So Crow - do you think United liquidating their assets and going out of business would have been a better option for their employees?
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No, I'm saying -- I'm merely -- I'm saying what I'm saying. I don't know why I'm always having people say, are you trying to say -- you know what you can do if you want to know what I'm saying is listen to what I'm saying. What I'm saying is what I said ...
posted on June 13, 2005 08:15:33 AM new
This article also touches on United.
American Airlines says one pension fix does not fit all
BRAD FOSS
Associated Press
WASHINGTON - When American Airlines teetered on the brink of bankruptcy in 2003, employees agreed to $1.8 billion worth of concessions, with one comforting condition: their pensions would be protected.
That deal, which saved the nation's largest carrier from a Chapter 11 filing, is a key factor that distinguishes American from its rivals at a time when the retirement benefits of workers throughout the industry are increasingly at risk. Illinois-based UAL Corp.'s United Airlines and US Airways Group Inc. have dumped their pension plans through bankruptcy restructuring and other carriers are threatening to do the same.
"We are trying very hard to strike another path," said Tommie L. Hutto-Blake, president of the Association of Professional Flight Attendants, which represents flight attendants at American Airlines, a unit of AMR Corp.
The chief executives of Northwest Airlines Corp. and Delta Air Lines Inc. on Tuesday told senators that their companies may have to seek bankruptcy court protection unless Congress gives them a 25-year extension to meet multibillion-dollar funding gaps in the pension benefits promised to workers.
In exchange, the executives pledged to switch workers to defined contribution plans, such as 401(k)s, and freeze existing pension benefits at current levels in order to limit the financial exposure of the federal Pension Benefit Guaranty Corporation, which has its own ballooning deficit because of defaults of the defined benefit plans of United, US Airways and others.
Defined benefit plans, which pay a lifetime pension after retirement, are funded by employers, based on actuaries' calculations of employees' salaries and life expectancies; defined contribution plans are retirement savings accounts funded by employees' payroll contributions, which employers sometimes match.
Northwest CEO Douglas Steenland told senators that "defined benefit plans simply do not work for an industry that is as competitive and as vulnerable to forces - ranging from terrorism to international oil prices - that are largely beyond its control, as the airline industry."
Steenland's opinion may ultimately sway Congress, but it had little resonance among executives and rank-and-file workers at American.
"There are a lot of people who have hopped on this bandwagon," said Mark Burdette, vice president of employee relations at Fort Worth, Texas-based AMR. But American has been able to chart its own course, Burdette said, in part because its pension-funding deficit is not as severe as Delta's and Northwest's.
Delta tops the list of U.S. airlines with underfunded pensions, with a deficit of $5.3 billion, according to Standard & Poor's. Northwest is next in line with a funding deficit of $3.8 billion, while American has a shortfall of $2.7 billion.
Profitable low-cost airlines such as Southwest Airlines Co. and JetBlue Airways Corp. have defined contribution plans.
American chief executive Gerard Arpey was not invited to testify Tuesday but he sent a letter, co-signed by union leaders, urging the finance committee to find a solution that gives companies extra time to properly fund their pensions without forcing them to switch to a defined contribution plan. The letter also criticized a Bush administration proposal to tighten funding requirements on companies whose credit ratings are below investment grade, saying it "could have the perverse effect of forcing us to abandon our plans."
In United's case, there was a strong financial case to be made - in the short run, at least - for dumping the pensions and switching to defined contribution plans.
United Airlines estimated in an April 11 bankruptcy filing that the cost of establishing a defined contribution plan over the next six years would be roughly $700 million, assuming the carrier contributed a matching sum equal to 4 percent to 6 percent of salary to each employee's plan. By comparison, payments to its underfunded defined benefit plan would have exceeded $4 billion over the same period, the company said.
Still, that comparison is somewhat misleading, according to David Feinstein, a Chicago-based actuary who has done work on behalf of United's flight attendants.
United's own calculations showed that after an initial period of rather large payments, the funding requirements for the flight attendants' pension would shrink immensely, assuming annual stock market returns recovered to about 8.5 percent.
"In the long run, it may not make a big difference," Feinstein said.
That is the position at American, whose executives describe the pension-funding crisis as a temporary phenomenon tied to the stock market downturn that began in 2000 and to extremely low interest rates. As the economy recovers, they say, so too will the value of their pension-related assets.
And because American's pensions are in better shape than United's, switching to a defined-contribution plan would not even offer any immediate financial savings, executives said.
Over the past two years American has contributed almost $600 million to its employees' defined-benefit plans. If the company had instead paid into a defined-contribution system at a rate of 5 percent, the costs would have been roughly $450 million.
But the economic rationale is only part of the picture at American. Underpinning the company's lone-wolf status on the pension issue is a two-year-old agreement between executives and employees to do everything they could to preserve the pensions.
During the tense labor-management negotiations of March 2003 that yielded a last-minute compromise to avoid Chapter 11 (and which resulted in the ouster of longtime CEO Don Carty), American's rank and file workers made it clear they were "not interested in touching the pension plans," Burdette said. Instead, workers negotiated steep wage cuts and operational changes that would force them to work harder for every dollar they earned.
Now, those sacrifices seem like a small price to pay at a time when flight attendants, mechanics and pilots at other major carriers are seeing their pension benefits put on the chopping block.
"This is a stressful occupation," said Patrick Hancock, a 21-year flight attendant at American. "The pay is okay. But knowing that you're going to have a good pension and be able to travel when you retire ... that's what makes you willing to put up with a lot, in order to hang on to it."
posted on June 13, 2005 08:23:59 AM new
Ron, you must have heard about Alaska Airlines? They fired all their baggage handlers. They hired a private co. to do it now.
BUT they gave every one of the handlers 2 weeks pay for every year they worked, paid for their medical ins for a year, and gave everyone bonuses. Most of the people had worked there for years, so their severance pays were pretty good.
I haven't heard anything in the news about them lately, so I guess everything is ok?
posted on June 13, 2005 08:36:39 AM new
No, fenix, I expect all those "highly skilled" upper management and exec types to run a better company...that's what they're paid those ungodly wages for.
I expect, in America, that employees would be treated well and rewarded for their work with decent wages and benefits especially wages and benefits they were PROMISED.
But that's OK. Bangladesh and other third world countries have been trucking along for years and if the U. S. follows their lead of two classes, the ultra-rich and the desperately poor....well, maybe someday THEY can send us aid.
And, I think ALL airline workers should be paid minimum wage to save the airlines...pilots, mechanics, security personnel, everybody so we can fly safer.
Oh, that's right the mechanics in INDIA and CHINA DO get minimum wages.
Maybe they should outsource airplane repair to North Korea
[ edited by crowfarm on Jun 13, 2005 08:39 AM ]
posted on June 13, 2005 08:57:34 AM new
Crow - what does a highly skilled management team do when two planes are used in a terrorist attack and income plummets while costs stay the same?
I think you forget that more than any other industry, the airline industry was descemated by 9/11 and is trying to come back. You are alsoeither forgetting or not acknowledging that United was denied guaranteed loans by the government in the wake of the attacks that would have helped them to restructure their debts without the extreme measures they are having to go thru right now.
Blaming a CEOs salary for everything is easy but it's also niave but then so is all of the India/Korea crap at the end of your post.
I just wonder if you have actually ever tried to run a business because you seem to have a simplified view of things.
~~~ • ~~~ • ~~~ • ~~~ • ~~~
No, I'm saying -- I'm merely -- I'm saying what I'm saying. I don't know why I'm always having people say, are you trying to say -- you know what you can do if you want to know what I'm saying is listen to what I'm saying. What I'm saying is what I said ...
posted on June 13, 2005 09:09:13 AM new
I don't know Ron, if they were able or what.
I haven't heard anything, after they did the stories on them a few weeks back
I gave my resume to Alaska about 9 years ago. For the corporate office. Back then, they had a total non smoking policy. They required a nicotine test. I smoked then, so I didn't get the job. I'm sure they still have that now, though it has nothing to do with laying off the baggage handlers.
posted on June 13, 2005 09:12:08 AM new
No, fenix, you have an oversimplified idea about business.....overpay the top and screw the workers and everything will be fine.
Well, that's the American way of doing business so I guess it must be OK
The India/Korea crap ?......I may have not got the exact countries right but the airlines ARE OUTSOURCING their mechanical work.....
The Korea crack was because Americans feel so safe with other countries doing the work of FORMER airline employees that I thought a nice friendly country like N.Korea would have some "special" mechanics
posted on June 13, 2005 09:33:26 AM new
::No, fenix, you have an oversimplified idea about business.....overpay the top and screw the workers and everything will be fine.::
I was wondering if you would like to find a quote of mine that supports that accusation or this just going to be another example opf you taking everything to the lmost extreme negative you can contemplate. It must be stressful living in such a negative state of mind.
::The India/Korea crap ?......I may have not got the exact countries right but the airlines ARE OUTSOURCING their mechanical work.....::
So what, a plane flies in from a weekend on he the New York to Los Angeles turnaround and they fly down to Mexico City for maintanance before the next days flights begin? Somehow I think those labor savings would be canceled out by the fuel costs.
Are you sure you are not confusing airlines with manufacturers?
~~~ • ~~~ • ~~~ • ~~~ • ~~~
No, I'm saying -- I'm merely -- I'm saying what I'm saying. I don't know why I'm always having people say, are you trying to say -- you know what you can do if you want to know what I'm saying is listen to what I'm saying. What I'm saying is what I said ...
