BUsh and Big Business

[Buck]

[blockquote]
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On 12/7/2002 8:55:27 AM Bob Owens wrote:

[blockquote]
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On 12/7/2002 7:56:44 AM Rational Thought wrote:

A biased comment. The point is that the US government should let the market decide who has a successfull business model. And it has. It has decided not to provide UAL with any money because investors (bond holders) don't think they will get it back. Nor do equityholders have any faith in the profitability of the business. The issue is that the government should not pick winners and losers.
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[/blockquote]

Biased? In what way?

Ok. So the government should not pick winners vs losers amongst big businesses. I have no problem with that. What I do have a problem with is the government picking winners and losers between business interests and labor. Their actions have been clear here where time after time they use all sorts of reasons why they choose business all the time.
----------------
[/blockquote]

You mean like the AFL-CIO picking winners and losers between morals and ethics?

 

[Rational Thought]

[blockquote]
----------------
On 12/7/2002 8:55:27 AM Bob Owens wrote:

What I do have a problem with is the government picking winners and losers between business interests and labor. Their actions have been clear here where time after time they use all sorts of reasons why they choose business all the time.
----------------
[/blockquote]

I really don't see what your point is. Are you discussing the current airline situation? or the current Administrations policy on federal regulations and their relation with organized labor and labor markets? I thought you were discussing the ATSB.

 

[Rational Thought]

[blockquote]
----------------
On 12/7/2002 8:55:27 AM Bob Owens wrote:

What I do have a problem with is the government picking winners and losers between business interests and labor. Their actions have been clear here where time after time they use all sorts of reasons why they choose business all the time.
----------------
[/blockquote]

I really don't see what your point is. Are you discussing the current airline situation? or the current Administrations policy on federal regulations and their relation with organized labor and labor markets? I thought you were discussing the ATSB.

 

[RV4]

Big Labor's Enron

Wall Street Journal Editorial Page

AFL-CIO chief John Sweeney is having a high old time with business
scandals, condemning "corporate greed" and capitalist "thieves." Yet his
acute moral antennae have somehow missed the shenanigans at Union Labor
Life Insurance Co., or Ullico, a labor-owned insurance company that looks
like Big Labor's Enron.

Last week the National Right to Work Legal Defense Foundation asked the
National Labor Relations Board to investigate if Ullico's board members --
all top union officials -- profited at the expense of rank-and-file union
members in a dubious stock-selling scheme. A federal grand jury and the
Labor Department are also probing those stock transactions.

Ullico was founded in 1925 as a way to provide low-cost life and health
insurance to union members. The insurer is privately held, and to ensure
labor control it allows only unions, as well as officers and directors, to
buy its stock. For years a share of Ullico was fixed at $25.

In the go-go 1990s, however, Ullico decided to join the pursuit of
stock-market riches. In 1997 the company invested $7.6 million in a modest
little venture known as Global Crossing. By May of 1999, when Global
Crossing's stock peaked, Ullico's stake was worth $2.1 billion -- almost 10
times what all of Ullico was worth when it first invested.

As Ullico's investment grew, it decided to cut its stockholders in on the
windfall. It abandoned its old fixed valuation of $25 a share and began
adjusting its share price annually, as determined by a year-end
accountant's review. The board would ratify the new price, and then Ullico
would repurchase shares to allow investors to realize gains. And so in May
of 1999, the Ullico board ratified a share price of $53.94, and went ahead
with a plan to buy back as much as $15 million worth of shares from investors.

But here's where things get Enron-esque. In December of 1999 Ullico's
chairman, Robert Georgine, sent a confidential letter to the company's
senior officers and directors offering to let them buy as many as 4,000
Ullico shares at the $53.94 price. But two weeks later, a year-end audit
pointed to a higher price of $146, which the board ratified in May 2000.
Those insiders were in effect ratifying nearly a tripling in value of their
own Ullico investments.

By then, however, the telecom bubble had begun to burst. By November 2000,
Ullico's investment had fallen dramatically (Global Crossing's shares had
dropped below $25 from a high of $64.25), but the Ullico directors
authorized another stock buyback -- and at the same $146 price.

That buyback was technically open to all shareholders. But it was crafted
so that large shareholders -- mainly the unions -- faced restrictions on
how much they could sell. Meanwhile, those with small holdings -- officers
and directors -- were allowed to sell back all of their shares. And the
board agreed to extend the sell deadline by five months. As a result of
prices and buyback rules that they themselves had set, a handful of
directors made a windfall estimated at $6.5 million.

These weren't just any old union members, either. Among those who sold back
shares were Martin Maddaloni, president of the plumbers union; William
Bernard, former head of the asbestos-workers; Jacob West, former
ironworkers' chief; carpenters' president Douglas McCarron; and Morton
Bahr, president of Communications Workers of America.

So at the same time that the value of Ullico was falling like a rock, these
insiders made out like, well, Andrew Fastow. These union bigshots insist
they've done nothing wrong, but that's what Enron executives also say.
"These leaders have damaged millions of workers' pension funds which were
entrusted to and invested in Ullico," says National Legal and Policy Center
President Ken Boehm. Mr. Georgine and Ullico decline comment.

Mr. Sweeney has said that he himself did not sell any shares, and he
publicly called on Mr. Georgine to appoint an outside investigator. (Former
Illinois Republican Governor James Thompson is leading the probe). But what
Mr. Sweeney hasn't done is turn his moral indignation loose on his labor
peers as he has so often against corporations.

As long as we're talking about blind eyes, we might also mention the quiet
in Congress. Perhaps it's a coincidence that Ullico is a big political
donor, especially to Democrats, and that Ted Kennedy, who runs the Senate
labor committee, was also an Ullico donee his last re-election. More
alarming is the fact that Iowa Democrat Tom Harkin is insisting on language
in an appropriations bill that would block greater public disclosure by
unions. In the wake of the Ullico fiasco, that's a scandal in its own right.

We look forward to the result of the Labor and Thompson probes, especially
given that 10 of the current Ullico board members also sit on the AFL-CIO's
executive council. If it turns out there was corporate abuse, no doubt Mr.
Sweeney will deal appropriately with the "thieves."

 

[RV4]

Big Labor's Enron

Wall Street Journal Editorial Page

AFL-CIO chief John Sweeney is having a high old time with business
scandals, condemning "corporate greed" and capitalist "thieves." Yet his
acute moral antennae have somehow missed the shenanigans at Union Labor
Life Insurance Co., or Ullico, a labor-owned insurance company that looks
like Big Labor's Enron.

Last week the National Right to Work Legal Defense Foundation asked the
National Labor Relations Board to investigate if Ullico's board members --
all top union officials -- profited at the expense of rank-and-file union
members in a dubious stock-selling scheme. A federal grand jury and the
Labor Department are also probing those stock transactions.

Ullico was founded in 1925 as a way to provide low-cost life and health
insurance to union members. The insurer is privately held, and to ensure
labor control it allows only unions, as well as officers and directors, to
buy its stock. For years a share of Ullico was fixed at $25.

In the go-go 1990s, however, Ullico decided to join the pursuit of
stock-market riches. In 1997 the company invested $7.6 million in a modest
little venture known as Global Crossing. By May of 1999, when Global
Crossing's stock peaked, Ullico's stake was worth $2.1 billion -- almost 10
times what all of Ullico was worth when it first invested.

As Ullico's investment grew, it decided to cut its stockholders in on the
windfall. It abandoned its old fixed valuation of $25 a share and began
adjusting its share price annually, as determined by a year-end
accountant's review. The board would ratify the new price, and then Ullico
would repurchase shares to allow investors to realize gains. And so in May
of 1999, the Ullico board ratified a share price of $53.94, and went ahead
with a plan to buy back as much as $15 million worth of shares from investors.

But here's where things get Enron-esque. In December of 1999 Ullico's
chairman, Robert Georgine, sent a confidential letter to the company's
senior officers and directors offering to let them buy as many as 4,000
Ullico shares at the $53.94 price. But two weeks later, a year-end audit
pointed to a higher price of $146, which the board ratified in May 2000.
Those insiders were in effect ratifying nearly a tripling in value of their
own Ullico investments.

By then, however, the telecom bubble had begun to burst. By November 2000,
Ullico's investment had fallen dramatically (Global Crossing's shares had
dropped below $25 from a high of $64.25), but the Ullico directors
authorized another stock buyback -- and at the same $146 price.

That buyback was technically open to all shareholders. But it was crafted
so that large shareholders -- mainly the unions -- faced restrictions on
how much they could sell. Meanwhile, those with small holdings -- officers
and directors -- were allowed to sell back all of their shares. And the
board agreed to extend the sell deadline by five months. As a result of
prices and buyback rules that they themselves had set, a handful of
directors made a windfall estimated at $6.5 million.

These weren't just any old union members, either. Among those who sold back
shares were Martin Maddaloni, president of the plumbers union; William
Bernard, former head of the asbestos-workers; Jacob West, former
ironworkers' chief; carpenters' president Douglas McCarron; and Morton
Bahr, president of Communications Workers of America.

So at the same time that the value of Ullico was falling like a rock, these
insiders made out like, well, Andrew Fastow. These union bigshots insist
they've done nothing wrong, but that's what Enron executives also say.
"These leaders have damaged millions of workers' pension funds which were
entrusted to and invested in Ullico," says National Legal and Policy Center
President Ken Boehm. Mr. Georgine and Ullico decline comment.

Mr. Sweeney has said that he himself did not sell any shares, and he
publicly called on Mr. Georgine to appoint an outside investigator. (Former
Illinois Republican Governor James Thompson is leading the probe). But what
Mr. Sweeney hasn't done is turn his moral indignation loose on his labor
peers as he has so often against corporations.

As long as we're talking about blind eyes, we might also mention the quiet
in Congress. Perhaps it's a coincidence that Ullico is a big political
donor, especially to Democrats, and that Ted Kennedy, who runs the Senate
labor committee, was also an Ullico donee his last re-election. More
alarming is the fact that Iowa Democrat Tom Harkin is insisting on language
in an appropriations bill that would block greater public disclosure by
unions. In the wake of the Ullico fiasco, that's a scandal in its own right.

We look forward to the result of the Labor and Thompson probes, especially
given that 10 of the current Ullico board members also sit on the AFL-CIO's
executive council. If it turns out there was corporate abuse, no doubt Mr.
Sweeney will deal appropriately with the "thieves."

 

[Rational Thought]

[blockquote]
----------------
On 12/7/2002 9:09:03 AM Bob Owens wrote:

OK, then explain how preventing workers from allowing the market to determine their compensation as he did during the NWA, UAL PEBS and the Longshoremans dispute tie into the theory of minimizing Government interference? Come on this administration has the worst record of government interference in the airline industry than any other previous administration. Bush's pledge of "No airline stikes in his administration" is hardly indicative of a "hands off" policy.
----------------
[/blockquote]

I would say that in general, the Administration would like to minimize government involvement, but that doesn't mean that they always do nor do they not make adjustments when needed to maintain party control of a particular branch of government. We all make adjustments based on self-interest, but what is critical is our overall goal/strategy and whether a significant percentage of our actions are consistent with it.

As to your statement regarding UAL/NWA, I believe the decision was made because of the general decline of economic activity in the US economy generated from the supply overhang in the business sector. I don't think that is inconsistent. The current Administration did not want to take the risk that a strike by a small segment of the economy would create negative knock-on effects. An airline going bankrupt now has a minimal impact on economic activity, an airline suddenly ceasing operations does. The two are very different.

The Longshoremen would have had an even larger impact on economuc activity. Significantly greater than the role these individuals play in the economy. It was a wise decision to prevent that from occuring. The Administration shouldn't let the interests of a narrow/irrelevant portion of the economy, negatively impacting the economy as a whole.

It is important for you - as you look at these events and decisions - to see them in the context of the time period they occured, the impact each would have on broader economic activity, and the current level of economic growth in the economy.

 

[Rational Thought]

[blockquote]
----------------
On 12/7/2002 9:09:03 AM Bob Owens wrote:

OK, then explain how preventing workers from allowing the market to determine their compensation as he did during the NWA, UAL PEBS and the Longshoremans dispute tie into the theory of minimizing Government interference? Come on this administration has the worst record of government interference in the airline industry than any other previous administration. Bush's pledge of "No airline stikes in his administration" is hardly indicative of a "hands off" policy.
----------------
[/blockquote]

I would say that in general, the Administration would like to minimize government involvement, but that doesn't mean that they always do nor do they not make adjustments when needed to maintain party control of a particular branch of government. We all make adjustments based on self-interest, but what is critical is our overall goal/strategy and whether a significant percentage of our actions are consistent with it.

As to your statement regarding UAL/NWA, I believe the decision was made because of the general decline of economic activity in the US economy generated from the supply overhang in the business sector. I don't think that is inconsistent. The current Administration did not want to take the risk that a strike by a small segment of the economy would create negative knock-on effects. An airline going bankrupt now has a minimal impact on economic activity, an airline suddenly ceasing operations does. The two are very different.

The Longshoremen would have had an even larger impact on economuc activity. Significantly greater than the role these individuals play in the economy. It was a wise decision to prevent that from occuring. The Administration shouldn't let the interests of a narrow/irrelevant portion of the economy, negatively impacting the economy as a whole.

It is important for you - as you look at these events and decisions - to see them in the context of the time period they occured, the impact each would have on broader economic activity, and the current level of economic growth in the economy.

 

[Bob Owens]

[blockquote]
----------------
On 12/7/2002 10:57:28 AM Buck wrote:

[blockquote]
----------------
On 12/7/2002 809 AM Bob Owens wrote:

Bush the second came right out and said that he will not allow any airline strikes during his administration. He blocked two strikes of mechanics already.
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[/blockquote]

IT is interesting that by forcing the mechanics in the PEB, that mechanic wages were increased dramtically. Bob is your allegence to the AFL-CIO and the Democrats so important that you would have your fellow mechanics wages reset to Pre-PEB rates?
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[/blockquote]

No I would have preferred that he let them go for $40/hr which AMFA at NWA was willing to strike for. Or did you conveintly forget that. The PEBs held back the profession.

 

[Bob Owens]

[blockquote]
----------------
On 12/7/2002 10:57:28 AM Buck wrote:

[blockquote]
----------------
On 12/7/2002 809 AM Bob Owens wrote:

Bush the second came right out and said that he will not allow any airline strikes during his administration. He blocked two strikes of mechanics already.
----------------
[/blockquote]

IT is interesting that by forcing the mechanics in the PEB, that mechanic wages were increased dramtically. Bob is your allegence to the AFL-CIO and the Democrats so important that you would have your fellow mechanics wages reset to Pre-PEB rates?
----------------
[/blockquote]

No I would have preferred that he let them go for $40/hr which AMFA at NWA was willing to strike for. Or did you conveintly forget that. The PEBs held back the profession.

 

[Bob Owens]

[blockquote]
----------------
On 12/7/2002 11:07:20 AM RV4 wrote:

[blockquote]
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On 12/7/2002 9:48:45 AM Bob Owens wrote:

Once again, right or wrong, Clinton followed the long established policy of adhereing to what every President with the exception of GB-1 did.

[/blockquote]

That is false!

When William Zipper Clinton prohibited the APA from conducting a strike, it was the first time in the airline industry since the early 70's.

That was hardly following "long established" policy

----------------
[/blockquote]

PEBs are also used in the Railroads and are used quite regularly. Bush was the first to not adhere to the recommendation of the NMB when they requested he appoint a PEB. Check your facts.

 

[Bob Owens]

[blockquote]
----------------
On 12/7/2002 11:07:20 AM RV4 wrote:

[blockquote]
----------------
On 12/7/2002 9:48:45 AM Bob Owens wrote:

Once again, right or wrong, Clinton followed the long established policy of adhereing to what every President with the exception of GB-1 did.

[/blockquote]

That is false!

When William Zipper Clinton prohibited the APA from conducting a strike, it was the first time in the airline industry since the early 70's.

That was hardly following "long established" policy

----------------
[/blockquote]

PEBs are also used in the Railroads and are used quite regularly. Bush was the first to not adhere to the recommendation of the NMB when they requested he appoint a PEB. Check your facts.

 

[WingNaPrayer]

[P]
[BLOCKQUOTE][BR]----------------[BR]On 12/8/2002 551 PM Bob Owens wrote:
[P][/P]Our nation is on a dangerous course where property rights are put ahead of human rights.[BR]----------------[/BLOCKQUOTE]
[P]You must always be mindful that....where corporate america is concerned humans [STRONG][EM]are[/EM][/STRONG] property![/P]

 

[WingNaPrayer]

[P]
[BLOCKQUOTE][BR]----------------[BR]On 12/8/2002 551 PM Bob Owens wrote:
[P][/P]Our nation is on a dangerous course where property rights are put ahead of human rights.[BR]----------------[/BLOCKQUOTE]
[P]You must always be mindful that....where corporate america is concerned humans [STRONG][EM]are[/EM][/STRONG] property![/P]

 

[Bob Owens]

[blockquote]
----------------
On 12/7/2002 11:07:20 AM RV4 wrote:

Bob,

When making reference earlier to NYC market rate compared to Tulsa, were you giving us a clue into future negotiations with AA?

Is it the NYC TWU Officer's position that when PAYCUTS arrive, the Tulsa employees should take a bigger cut because of market rates? Or should Tulsa absorb all of the cut and let you maintain your pay?

----------------
[/blockquote]

Look you can read into it what you want, I know you will any way. The fact is what I said was accurate, you enjoy the rate of pay you get because the company had to keep the guys on the line at a livable rate. That said its about time you guys in Tulsa stop going after baggage handlers and blaming them for our ills. The fact is that its been the vote in Tulsa that has carried through most of the concessionary contracts. When is the last time Tulsa rejected a contract?

 

[Bob Owens]

[blockquote]
----------------
On 12/7/2002 11:07:20 AM RV4 wrote:

Bob,

When making reference earlier to NYC market rate compared to Tulsa, were you giving us a clue into future negotiations with AA?

Is it the NYC TWU Officer's position that when PAYCUTS arrive, the Tulsa employees should take a bigger cut because of market rates? Or should Tulsa absorb all of the cut and let you maintain your pay?

----------------
[/blockquote]

Look you can read into it what you want, I know you will any way. The fact is what I said was accurate, you enjoy the rate of pay you get because the company had to keep the guys on the line at a livable rate. That said its about time you guys in Tulsa stop going after baggage handlers and blaming them for our ills. The fact is that its been the vote in Tulsa that has carried through most of the concessionary contracts. When is the last time Tulsa rejected a contract?