US Air''s Move to Cut Pension Plan Could Be Precedent

[usfliboi]

US Air''s Move to Cut Pension Plan Could Be Precedent, WSJ Says
By Art Daniels
Washington, March 18 (Bloomberg) -- US Airways Group Inc.''s attempt to terminate its pension plan for pilots in order to recover from bankruptcy-court protection could set a precedent for other floundering companies, the Wall Street Journal said, citing pension specialists.
The U.S.''s seventh-largest airline wants to turn the pension obligations for 7,000 pilots over to the Pension Benefit Guaranty Corp., a federal corporation, the Journal reported.
Under the pension termination, pilots would see their benefits cut as much as 50 percent, and US Airways is negotiating to create a savings plan that would help make up the shortfall, the newspaper said.
Some pension specialists worry that US Air''s move will become an option for many financially troubled companies to explore, the newspaper said.
``This could set a horrible precedent by making it easier for companies to renege on the retirement promises they made to their workers by terminating their pension plan through bankruptcy without adequate outside review,'''' U.S. Representative Bernie Sanders of Vermont told the Journal.
(WSJ 3/18 Online)

 

[PITbull]

Biggest fear I have.

Corporations who are OR will experience shortfalls in these difficult times will look to BK for thier resolve, and that places labor in a bad predicament with not only thier wage, but ALL of their benefits, making it very difficult for the average worker today to hurdle these kinds of times without going into "personal" BK themselves. We will be known as a "Nation gone BK".

The concern to ponder is how much of this is really economy driven, and how much of it is that it is easy to walk into BK and get rid of unwanted debt; get a clean slate, and never need to make the effort to honor those debts in "good faith"? Our own CEO made statements at the road shows that BK is a "fresh start" for the company..."clean slate". At that moment in August, I knew this would spread like "wild fire" through out our Industry. When I left that hanger, I had an awful "sick" feeling.

One problem, begets the other, and the other...this "snow ball" effect with a downward spiral.

The laws on BK today are still too leaneant, allowing major corporations to just go in to BK and walk away from any obligations past incurred. This kind of thing is "sanctioned" by our laws and sends an ambiguous message in our society, and world.

I truly believe the only way for our economy to get back on its feet, unfortunately, is to NOT prevent the "shake out" from happening and allow those companies that can't manage to "merge" or "fold". This is the only way for those industries to "correct themselves"... without government bailouts. This kind of phenomenon is not just happening in our sector, but in many. Verizon now, is laying off thousands of workers, and looking for "hand outs" from the gvernment. IMO, Corporations should NOT be given any "handouts" or tax incentives or credits without THE INCENTIVE TO PROTECT THE WORKFORCE AND SAVE JOBS AT LIVABLE WAGES AND BENEFITS. Then, and only then, can they be eligible for tax relief, or "bail out" monies. After all, its tax payer money that assists these companies. If the laborer has less wage or no wage, and the corporation gets to survive on the back of "uncle sam" or BK, those layoffs create more havoc within the economy as now the worker cannot financially survive and pays little or no taxes and becomes another casualty for "gov. subsidies, and handouts to survive. Again burdening the tax payers. ("domino effect" here). There is a total "imbalance" occuring and it needs corrected, and "self correction" is the only salvation.

Hey, Just trying to be a little creative, over here, in PIT today.

 

[Hubturn]

Pit,
What you are asking for is a return to true capitalism and market forces. This industry has never had that and while a 'only the strong survive' mentality seems equal to all, we must not forget that the companies that once were start ups got protections that circumvented market forces in order TO survive. We all know about the Wright amendment, landing fee waivers, the taking of our slots, etc but we don't think about how these adversely affected our more established companies ability to compete. While I don't think a wholesale shift of obligations to the US Govt is desirable, I think maybe it is time for us to be considered the new start up and for US to start getting a few breaks.

 

[PITbull]

[blockquote]
----------------
On 3/18/2003 2:06:37 PM justanadd wrote:

I wonder how the state employees of Alabama feel about investing their retirement in an airline? Isn't it ironic that the pilots pensions are terminated indirectly by someone else's pension?
----------------
[/blockquote]

Ironic to say the least, down right paradoxal.

Dr Bronner, in one of these posts in a press release states he is here only for one or two years. He is also taking the Chair on the Board.

Total control....

 

[justanadd]

I wonder how the state employees of Alabama feel about investing their retirement in an airline? Isn't it ironic that the pilots pensions are terminated indirectly by someone else's pension?

 

[PITbull]

Hubturn,

U get a few breaks? They got and took ALL the breaks. When does it stop? How many airlines can the tax payers save, and only this Industry? Where do you stop? Does it stop, or does the Gov. bail out every corporation that proves financial difficulty? Do we make it comfortable to have corporations walk into BK, screw creditors, employees, stock holders, and these co. get to bounce back...to save whom? A few jobs. Corporate Exec jobs? Do you see how top heavy many corporations are? Look at verizon, it will stun you. Anyway, I have been accused of being a "socialist thinker"; now truly, am I? Just wanting to experience the otherside for a moment.

Point, in few words, Corporate America takes the "wind fall" and Labor gets "slammed" by the people, for the people, unto the people. Same Government, same congress, same "show".

I've had it. Tax payer money, is tax payer money, "bail out" should mean a complete "bail out" and that means saving the employees from the "rath" of the street. If your using my money, I'm in. Get it?

Otherwise, weed them out, and correction in the market place will "fix" the economy.

 

[oldiebutgoody]

[blockquote]
----------------
On 3/18/2003 3:39:29 PM usfliboi wrote:

he will not have total control, and he will be serving on the board. The company that he presides over will own 37% .
----------------
[/blockquote]
8 out of 15 board seats. Looks like total control to me.

 

[usfliboi]

he will not have total control, and he will be serving on the board. The company that he presides over will own 37% .

 

[Winglet]

The unfortunate fact is that one major airline has to liquidate in order for the industry to stay afloat in any form. Even if everybody was to to LCC, there's still WAY too much capacity for anyone to break even.