Oh no, the exec's took their's at $1.60, then it dropped to $0.56. If you were on insider, you could have taken yours also.
Analyst Jamie Baker says AA won't cut labor costs as much as Horton would like
- Thread starter FWAAA
- Start date
Character is determined more by the lack of certain experiences than by those one has had.
Friedrich Nietzsche
Kev3188
Veteran
... Or maybe I know that I'm right, and that's good enough for me. I choose not to keep posting into oblivion to prove it to everyone else on here... I am many things; a pedant is not one of them.
You prefer a different path, and that's fine. Do whatcha gotta.
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
The last 5 pages of this thread have been about character far more than the facts of what was written.
This sentence from post 126 is the key discussion point which even Jim has agreed that I am right after multiple modifications to his argument.
"The DB pension plans are obviously a large cost that none of the competition has."
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The simple answer is that sentenc is incorrect as stated but Jim hasn't admitted that - which is why I have persisted.
As the ring of bystanders has been drawn into this discussion, it becomes an opportunity for me to share with you all why I have persisted in the discussion - not unlike what happened with E in multiple discussions.
I have no need to validate my self worth by posting information on this forum.... but quite frankly, there are people who regularly tell me they appreciate the contributions I make.
There are others who were quite free to post what they wanted and quite frankly have been threatened by what I say, particularly since I have taken position after position that has been different from conventional wisdom on this forum and in the overall airline analyst community.
We were entertained for weeks on end with predictions about how much damage WN would do to DL in ATL - and yet I persisted citing reasons such as WN's overall financial performance, the competitive ability of network carriers to defend themselves, the overall concentration of WN's new slot portfolio to/from ATL instead of throughout WN's network, and then what should seem the typical labor discord that comes w/ airline mergers. EVERY ONE of those things I predicted would be issues for WN in ATL have come to pass - and WN is not growing.
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For months, long before the paid analyst community started focusing on it, I noted that AA's revenue performance in key markets was falling and that low cost carriers are taking key revenue from AA.
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I post what I post here because it is accurate and what I post awakens some people to the reality that exists around them... there are always people in the world who are threatened by the truth but there will always be those who recognize what is at stake and are not blinded.
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My reason for posting regarding the whole AA-pension issue is so that those AA people who want to act can do so knowing that the typical analyst and corporate talk about how much of a burden pensions are simply does not hold water. The PBGC will vigorously take that position - and I hope in so doing will choose to extract significant amounts of equity from the reorganized AMR Corp in what we can hope will be a large enough disincentive for them to terminate the plans.
.
Some people don't want to hear that perspective - those that lost their own pensions and didn't have anyone advocating on their behalf - and others simply don't want to see someone else win an argument. It doesn't take long into a discussion before it becomes critically important to understand not just WHAT someone is arguing, but WHY. The last five pages of this discussion have been about getting to the WHY of Jim's position.
Either way, the decision will be made based on what is in the best interests of AMR - and they will have to factor in how their actions will affect others.
.
You're a smart person, Kev, and have lots of information and insight specific to important areas of life. My challenge to you and to others is to use what you have for the benefit of the common good - and don't be afraid to bulldoze through the obstacles and people who come in your way - and who would really rather not hear what you have to say.
Impressive, do you trade your own stocks? If so, you could open your own business..........
PhatSappy
Advanced
- Oct 31, 2010
- 162
- 16
Some notes on the following Frontline story:
http://www.pbs.org/wgbh/pages/frontline/video/flv/generic.html?s=frol02s4b9q79&continuous=1
If you follow the frontline story, the following applies:
UAL, AMR….
One after another bankruptcy designed to allow a major employer out of their promises.
The PBGC was set up in 1974 to ensure pension plans.
However (due to congressional oversight?) funding rules under ERISA are fundamentally flawed. Corporate America is exploiting loopholes and working people are losing their pensions. The bankruptcy laws have been “gamed” by sophisticated lawyers and planners.
Superpriority Claims: In the UAL bankruptcy, the “1st Day Orders” were written by the UAL lawyers, and their claims were given “super priority”. Bankruptcy laws don’t leave something on the table for employees and retirees.
UAL was considered a “successful reorganization”. Banks with their superpriority got back every penny, plus interest and millions of dollars in fees. How much collected on fees was never disclosed. Professional costs ran into the neighborhood of $400 Million.
UAL senior management got back $400 Million in new stock and bonuses. Glen Tilton negotiated a “Secular Pension Trust” for his retirement security.
- Not just happening in the airlines; it is happening across the spectrum of American business.
Defined Benefit Plans and the promises behind them, are not worth the paper they are written on. American has entered the 401 retirement era. Everyone has to have an investment strategy. In Dallas an industry expert (Brooks Hamilton) says, “we say the same thing over and over – a “yield disparity” described as a financial cancer that destroys the average worker’s capability to retire. IE, the average worker invests around 4% whereas those with the highest income brackets investing the upper 20% of financial plans get up to 7 times the return on investment.
States Prof. Alicia Munnel of Boston College; “We live busy, complicated lives; saving for retirement is a really hard (and complicated) thing to do”. “The worker has to make a choice, every step along the way. The individual has to decide whether or not to join the plan, how much to contribute, how to allocate those contributions, how to change those allocations over time, decide what to do when they move from one job to another, think what to do about company stock (ha!), and then the hardest thing to do is when they get to retirement, decide what to do when somebody hands them a check’ …‘How do you figure out what to do with that money over your retirement span”?
EBRI (Employment Benefit Research Institute, a Washington think tank):
Per Jack Vanderhei – research fellow with data on 16.5 million pension participants.
- On average, workers save about 3 times their annual salary in account balance when “currently on the verge of” (prior to) retirement.
- Based on people earning $40k - $50k per year the average has $120k to $150k in their 401k.
- Life expectancy for people retiring at 60 - 65 is roughly 17 years.
- This covers the retiree for about 8 -9 years where….
- All they have left is “Social Security” for 8 – 9 years.
- Workers need to save up 8 times their annual salary for retirement planning.
- This equates to 14 – 15% per year for 30 years (combined, employer / employee contributions).
Pension expert Brooks Hamilton puts that number even higher, at 15 – 18% of pay.
Mr. Vanderhei states; “I would say that unless you are in the upper income cortiles, you are going to be in for a very rough ride”.
Brooks Hamilton (corporate benefits consultant) stated that he would point o an employee bringing coffee to their meeting and ask a CEO if he’d would allow that employee to manage his (the CEO’s) pension plan? The reply; “Of course not, don’t they teach you anything down at Texas”? And he stated his reply; “But you force the employee to manage his own” (plan).
401 plans were originally introduced in 1978 as “supplemental” plans, not for millions of Americans to be a primary source of retirement planning. They came about as a loophole designed by Congress on request of specific executives at a few companies (Kodak and Zerox) to solve their own problems. In 1981 the IRS ruled that ordinary savings from ordinary parole deductions were eligible for 401k exemptions.
Circa 1981 onward: Says Mr. Hamilton; “It (IRS regulation expanding 401k eligibility) electrified he industry’; ‘guys like me’. … ‘It electrified the professional infrastructure of the benefit industry because (they realized) workers could now deduct savings for retirement”.
Sexy talk…
Employers were pitched that they could cut their contributions (at 6-8% of pay) in half by switching their employees to 401k plans. The 401k plans were pitched to employers as “sexy” (somebody’s getting screwed) and the employees were pitched “free money” in matching contributions.
Says Hamilton; (Per Department Of Labor) In 1974, of all contributions to retirement savings, the companies put in 89% and the workers 11%. In 2011, same source of info DOL stated the worker now puts in 51% and employers 49%.
My POLITICAL NOTE
[Congress needs to codify the employee groups being able to fund their own Defined Benefit plans. Given that population is growing. - Lets Do The Math.]
Search: Benefit Review Study of the Nebraska Retirement Systems
See: http://www.nasra.org/resources/nebraskastudy.pdf
Results of the Nebraska study showed – with over 40 years of mixed “defined contribution” plans, the plans were inadequate. “People didn’t have enough in their accounts to retire”; stated Anna Sullivan, Dir., Nebraska Retirement System. “They don’t have enough to live on in their retirement”.
Frontline: After the study, “the state of Nebraska ended it’s 401k style plan for new employees, and allowed old 401k participants to shift to the “lifetime pension plan”.
Stated Prof. Teresa Ghilarducci, Prof. Notre Dame University; “ We are now shifting from lifetime pensions, to lifetime work. It is the end of retirement.”.
Summary:
Get more information. Plan on saving a higher percentage of your pay. Live within the means to do that.
Congress has failed us. We have been lied to. The Democrats and Republicans have failed us. Maybe it’s time for a shift in national policy. It is certainly time to change in respect of what we demand of people we send to the State Capitol and Washington. :angry:
http://www.pbs.org/wgbh/pages/frontline/video/flv/generic.html?s=frol02s4b9q79&continuous=1
If you follow the frontline story, the following applies:
UAL, AMR….
One after another bankruptcy designed to allow a major employer out of their promises.
The PBGC was set up in 1974 to ensure pension plans.
However (due to congressional oversight?) funding rules under ERISA are fundamentally flawed. Corporate America is exploiting loopholes and working people are losing their pensions. The bankruptcy laws have been “gamed” by sophisticated lawyers and planners.
Superpriority Claims: In the UAL bankruptcy, the “1st Day Orders” were written by the UAL lawyers, and their claims were given “super priority”. Bankruptcy laws don’t leave something on the table for employees and retirees.
UAL was considered a “successful reorganization”. Banks with their superpriority got back every penny, plus interest and millions of dollars in fees. How much collected on fees was never disclosed. Professional costs ran into the neighborhood of $400 Million.
UAL senior management got back $400 Million in new stock and bonuses. Glen Tilton negotiated a “Secular Pension Trust” for his retirement security.
- Not just happening in the airlines; it is happening across the spectrum of American business.
Defined Benefit Plans and the promises behind them, are not worth the paper they are written on. American has entered the 401 retirement era. Everyone has to have an investment strategy. In Dallas an industry expert (Brooks Hamilton) says, “we say the same thing over and over – a “yield disparity” described as a financial cancer that destroys the average worker’s capability to retire. IE, the average worker invests around 4% whereas those with the highest income brackets investing the upper 20% of financial plans get up to 7 times the return on investment.
States Prof. Alicia Munnel of Boston College; “We live busy, complicated lives; saving for retirement is a really hard (and complicated) thing to do”. “The worker has to make a choice, every step along the way. The individual has to decide whether or not to join the plan, how much to contribute, how to allocate those contributions, how to change those allocations over time, decide what to do when they move from one job to another, think what to do about company stock (ha!), and then the hardest thing to do is when they get to retirement, decide what to do when somebody hands them a check’ …‘How do you figure out what to do with that money over your retirement span”?
EBRI (Employment Benefit Research Institute, a Washington think tank):
Per Jack Vanderhei – research fellow with data on 16.5 million pension participants.
- On average, workers save about 3 times their annual salary in account balance when “currently on the verge of” (prior to) retirement.
- Based on people earning $40k - $50k per year the average has $120k to $150k in their 401k.
- Life expectancy for people retiring at 60 - 65 is roughly 17 years.
- This covers the retiree for about 8 -9 years where….
- All they have left is “Social Security” for 8 – 9 years.
- Workers need to save up 8 times their annual salary for retirement planning.
- This equates to 14 – 15% per year for 30 years (combined, employer / employee contributions).
Pension expert Brooks Hamilton puts that number even higher, at 15 – 18% of pay.
Mr. Vanderhei states; “I would say that unless you are in the upper income cortiles, you are going to be in for a very rough ride”.
Brooks Hamilton (corporate benefits consultant) stated that he would point o an employee bringing coffee to their meeting and ask a CEO if he’d would allow that employee to manage his (the CEO’s) pension plan? The reply; “Of course not, don’t they teach you anything down at Texas”? And he stated his reply; “But you force the employee to manage his own” (plan).
401 plans were originally introduced in 1978 as “supplemental” plans, not for millions of Americans to be a primary source of retirement planning. They came about as a loophole designed by Congress on request of specific executives at a few companies (Kodak and Zerox) to solve their own problems. In 1981 the IRS ruled that ordinary savings from ordinary parole deductions were eligible for 401k exemptions.
Circa 1981 onward: Says Mr. Hamilton; “It (IRS regulation expanding 401k eligibility) electrified he industry’; ‘guys like me’. … ‘It electrified the professional infrastructure of the benefit industry because (they realized) workers could now deduct savings for retirement”.
Sexy talk…
Employers were pitched that they could cut their contributions (at 6-8% of pay) in half by switching their employees to 401k plans. The 401k plans were pitched to employers as “sexy” (somebody’s getting screwed) and the employees were pitched “free money” in matching contributions.
Says Hamilton; (Per Department Of Labor) In 1974, of all contributions to retirement savings, the companies put in 89% and the workers 11%. In 2011, same source of info DOL stated the worker now puts in 51% and employers 49%.
My POLITICAL NOTE
[Congress needs to codify the employee groups being able to fund their own Defined Benefit plans. Given that population is growing. - Lets Do The Math.]
Search: Benefit Review Study of the Nebraska Retirement Systems
See: http://www.nasra.org/resources/nebraskastudy.pdf
Results of the Nebraska study showed – with over 40 years of mixed “defined contribution” plans, the plans were inadequate. “People didn’t have enough in their accounts to retire”; stated Anna Sullivan, Dir., Nebraska Retirement System. “They don’t have enough to live on in their retirement”.
Frontline: After the study, “the state of Nebraska ended it’s 401k style plan for new employees, and allowed old 401k participants to shift to the “lifetime pension plan”.
Stated Prof. Teresa Ghilarducci, Prof. Notre Dame University; “ We are now shifting from lifetime pensions, to lifetime work. It is the end of retirement.”.
Summary:
Get more information. Plan on saving a higher percentage of your pay. Live within the means to do that.
Congress has failed us. We have been lied to. The Democrats and Republicans have failed us. Maybe it’s time for a shift in national policy. It is certainly time to change in respect of what we demand of people we send to the State Capitol and Washington. :angry:
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
very well said.
But it is not just in the US - it extends to the entire western world - one which has lived beyond its means for decades, is concentrating power and wealth into the hands of fewer and fewer people, and which continues to deny the reality of the situation in which we live - although more and more people see it.
Ironically, I think more airline people see it than in the general population - perhaps because airline employees have been at the forefront of all that is wrong w/ American business for decades.
What will make AA's BK truly different from the rest is if they settle for just being competitive w/ the rest of the industry instead of trying to drop the bar another couple notches. Airline employees have begun to recover some of what was lost in the decade of the 2000s.... there is no need to push the bar down further - and it may well be that the consolidation that has taken place in the industry means it isn't necessry for AA to achieve the lowest costs in the industry in order to succeed.
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Rather in the airline industry or not, citizens of the western world would do well to ensure they are prepared for continued erosion of their lifestyles and their power - and if it turns out to all have been a farce, they will end up with more to spend in the long run. But if your resources are gone and the screws are tightened, most people have few if any options left.
Wretched Wrench
Veteran
- Apr 21, 2003
- 1,626
- 12
A 401K can be anything the company wants. It can be good, in that it can't be taken away by the company. It can be good in that it does not freeze i you leave AA. It can be good if the company contributes decently, as does Southwest.
But, it can be poor if the company contributes very little or nothing. It can be poor if the company invests poorly, as they have. Most of us lost out on the stock market boom because of our incredibly poor and limited choices. It can be poor if the company uses fees as a cash cow.
Since the company and its tame judges are in control, I do not think a 401K pension will be very good for anyone but the company.
Let's just hope the PBGC doesn't change the rules in the middle of the game. Their chronic underfunding worries me. A "business-friendly" Congress has resisted every attempt to properly fund the PBGC, serving the corporate funding. It looked good way back when it was set up, but its funding has not kept up with the times, or the use of bankruptcy as a corporate strategy to stiff employees and creditors.
eolesen
Veteran
- Jul 23, 2003
- 15,907
- 9,359
Uh, the company doesn't normally control the 401k investment options... At AMR, the 401K is managed by JP Morgan, who does investments as a primary line of business. Those employees taking risk saw reward. Or loss.
And to be fair, JP Morgan offered pretty much all the same types of risk funds as what I have at my current employer with MetLife. Or at least they did up until the point that I did a rollover.
And to be fair, JP Morgan offered pretty much all the same types of risk funds as what I have at my current employer with MetLife. Or at least they did up until the point that I did a rollover.
TWU informer
Veteran
- Nov 4, 2003
- 7,550
- 3,731
One of the great things about a 401K is your beneficiaries benefit extend beyond you are your spouse upon death.
Your Children and Grand Children can benefit too.
Your Defined Benefit plan doesn't help them one bit.
Unless you are as lucky as a Pilot and still get a lump sum, which that option the TWU lost in the 1980's along with other things.
The sad thing is we all entered older age before we have to switch.
I would have much rather had the matching 401K plan when I started at 23 years of age.
Your Children and Grand Children can benefit too.
Your Defined Benefit plan doesn't help them one bit.
Unless you are as lucky as a Pilot and still get a lump sum, which that option the TWU lost in the 1980's along with other things.
The sad thing is we all entered older age before we have to switch.
I would have much rather had the matching 401K plan when I started at 23 years of age.
Mr Red
Veteran
- May 11, 2010
- 612
- 182
Then you would only lost half of it 2008 thanks to the SCREW MARKET.
TWU informer
Veteran
- Nov 4, 2003
- 7,550
- 3,731
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