USA320Pilot said:
Any union who strikes would then lose 100% of their pay, medical and dental insurance, retirement benefits and pass privileges.
Will the judge do that to the company and the creditor's
[post="199680"][/post]
Interesting thoughts. Let me play "devil's advocate" a moment.....
First, let's talk about the creditors. If I were one, I'd be praying that something happened to cause liquidation sooner rather than later. Why, I hear you asking. Easy.
The secured creditors will take possession (or sell off) the assets that secure their loans, the lessors will get their airplanes, etc, so they'll be whole.
The unsecured aren't so lucky. If we reorganize, they'll get a few cents on the dollar just like last time. However, if we liquidate they will get most, if not all, their money. Remember that the appraisals accompanying the BK filing showed asset value nearly double the ATSB-backed loan value, even using distressed valuations. That roughly $700 million in extra value would go a long way toward paying off the unsecured creditors. So they definitely come out better in a liquidation, as long as it comes before too much of that asset base is depleted.
As for the employees, you need to step down from the 6 figure income throne we both sit on and look thru their eyes for a moment or two.
Give up 100% of their pay in liquidation? How many will give up 100% of their pay when furloughed?
Get furlough pay? For most employees, unemployment is probably as much or more.
Give up medical? If worst comes to worst, just about every employee lives near an emergency room that will provide care for free if necessary.
Give up retirement? That's the funniest of all, unless you're looking at it from only the 6 figure income stratosphere. The company wants to terminate all DB pensions. There goes the retirement except what the PBGC will cover. The rest of the employees aren't like you or me. A 5% or even 10% company contribution to a 401K will be $2000 or $3000 per year for most. And most won't be able to affort to make anywhere near the maximum individual contribution per year like you or I. So for most, there won't be that nice big nest egg in the 401K like you will have. So most employee's retirement is effectively gone no matter what happens, except for those lucky enough to get a decent benefit from the PBGC.
As if all that isn't enough, there's "the plan"....
As I've said before, if the company gets everything they want - call it an even Billion from the employees and $700 million in other savings - and the plan goes into place as advertised, our costs won't be competitive with the LCC's. That's what the numbers say, anyway you add them up.
If we could keep our current yield (what's the chances) or
if fuel would go down to below $30 per barrell (what's the chances), we might be able to break even. I know some will dispute all this and say "the plan" is visionary, industry-leading, etc. Fine, show us your numbers.
Jim
