How much more proof do you need that Delle's (amfa's) radical stance is not the way to go????...............
Reuters
UAL to Miss More Pension Payments
Friday July 23, 5:07 pm ET
By Meredith Grossman Dubner
CHICAGO (Reuters) - United Airlines said on Friday it plans no further
pension payments this year, angering unions who fear the carrier could
scrap their retirement plans altogether to lower costs and attract badly
needed investors.
The No. 2 U.S. airline told a bankruptcy court judge that plans to hold
off on a $404 million contribution in September and a $91 million
contribution in October will give it more flexibility to manage its
overall assets.
"It's a step to reduce our costs and attract the financing we're going to
need to exit bankruptcy," Chief Financial Officer Jake Brace told
reporters.
The company did not say when the payments would be made, but demoralized
workers fear they will never get that money.
United, a unit of UAL Corp. deferred a $72 million pension payment last
week, prompting speculation of deeper cuts.
"While United action falls short of an outright termination of the
pension plans, the company's actions make termination of the pension
plans likely," Greg Davidowitch, president of the Association of Flight
Attendants, said in a statement.
The International Association of Machinists said it was exploring legal
action. "We want to know if United is trying to dump its pension
obligations on U.S. taxpayers as another way to get the federal
government to finance its bankruptcy following their failed bid to
receive a loan guarantee," Robert Roach, IAM general vice president, said
in a statement.
Separately, United told the bankruptcy court it had arranged an
additional $500 million in debtor-in-possession financing to keep
operations going during restructuring.
The airline, which has been in Chapter 11 since December 2002, has until
June 30, 2005, to repay the loans. Lenders include General Electric Co's
GE Commercial Finance, J.P. Morgan Chase & Co., Citigroup Inc. and CIT
Group Inc.
The company also received another 30-day extension to file its
reorganization plan but said it will likely seek a "multi-month"
extension in August.
United was denied a $1.1 billion government loan guarantee last month,
forcing it to restructure plans for securing bankruptcy exit financing
and putting immediate pressure on the Elk Grove, Illinois-based company
to reduce ballooning pension costs.
United has four employee pension plans which now are undefended by about
$4.1 billion over the next five years.
"Because United's existing pension funding obligations will remain a huge
financial burden after exit, it is incumbent on United to study all
possible options and to determine whether United can sustain this burden
and still attract exit financing," the company said in an update to the
court on its reorganization.
Randy Clerihue, a spokesman for the Pension Benefit Guaranty Corp., the
federal agency that insures corporate pensions, said it was rare for
bankrupt companies that skip contributions to make up the shortfall.
"Obviously it heightens concern," Clerihue said. "It's not a foregone
conclusion that plans terminate, but we don't often see those plans
riding through without those shortfalls corrected."
US Airways terminated its pilots' pension to exit bankruptcy last year.
Airlines, particularly the biggest carriers, have been pressured by
record high fuel prices and competition from low-cost carriers.
Brace told reporters United fuel costs this year are now estimated to be
$900 million more than projected. But he did not expect any major changes
to the size or scope of United's route network.
Reuters
UAL to Miss More Pension Payments
Friday July 23, 5:07 pm ET
By Meredith Grossman Dubner
CHICAGO (Reuters) - United Airlines said on Friday it plans no further
pension payments this year, angering unions who fear the carrier could
scrap their retirement plans altogether to lower costs and attract badly
needed investors.
The No. 2 U.S. airline told a bankruptcy court judge that plans to hold
off on a $404 million contribution in September and a $91 million
contribution in October will give it more flexibility to manage its
overall assets.
"It's a step to reduce our costs and attract the financing we're going to
need to exit bankruptcy," Chief Financial Officer Jake Brace told
reporters.
The company did not say when the payments would be made, but demoralized
workers fear they will never get that money.
United, a unit of UAL Corp. deferred a $72 million pension payment last
week, prompting speculation of deeper cuts.
"While United action falls short of an outright termination of the
pension plans, the company's actions make termination of the pension
plans likely," Greg Davidowitch, president of the Association of Flight
Attendants, said in a statement.
The International Association of Machinists said it was exploring legal
action. "We want to know if United is trying to dump its pension
obligations on U.S. taxpayers as another way to get the federal
government to finance its bankruptcy following their failed bid to
receive a loan guarantee," Robert Roach, IAM general vice president, said
in a statement.
Separately, United told the bankruptcy court it had arranged an
additional $500 million in debtor-in-possession financing to keep
operations going during restructuring.
The airline, which has been in Chapter 11 since December 2002, has until
June 30, 2005, to repay the loans. Lenders include General Electric Co's
GE Commercial Finance, J.P. Morgan Chase & Co., Citigroup Inc. and CIT
Group Inc.
The company also received another 30-day extension to file its
reorganization plan but said it will likely seek a "multi-month"
extension in August.
United was denied a $1.1 billion government loan guarantee last month,
forcing it to restructure plans for securing bankruptcy exit financing
and putting immediate pressure on the Elk Grove, Illinois-based company
to reduce ballooning pension costs.
United has four employee pension plans which now are undefended by about
$4.1 billion over the next five years.
"Because United's existing pension funding obligations will remain a huge
financial burden after exit, it is incumbent on United to study all
possible options and to determine whether United can sustain this burden
and still attract exit financing," the company said in an update to the
court on its reorganization.
Randy Clerihue, a spokesman for the Pension Benefit Guaranty Corp., the
federal agency that insures corporate pensions, said it was rare for
bankrupt companies that skip contributions to make up the shortfall.
"Obviously it heightens concern," Clerihue said. "It's not a foregone
conclusion that plans terminate, but we don't often see those plans
riding through without those shortfalls corrected."
US Airways terminated its pilots' pension to exit bankruptcy last year.
Airlines, particularly the biggest carriers, have been pressured by
record high fuel prices and competition from low-cost carriers.
Brace told reporters United fuel costs this year are now estimated to be
$900 million more than projected. But he did not expect any major changes
to the size or scope of United's route network.