herk,
You hit the nail on the head. The PBGC will get this bill no matter what. Pretty confident this will not survive the process of the house/senate cmmte work.
You hit the nail on the head. The PBGC will get this bill no matter what. Pretty confident this will not survive the process of the house/senate cmmte work.
Walmartgreeter
Veteran
magsau said:
I agree. But to go back .....The PBGC was not created to take over pensions so bankrupt or nearly bankrupt corporations could simply "dump" them for another stab at bad mangement. It is criminal what is happening to our pensions, and even more criminal the theives are collecting on what is basically "loss of company" insurance before it is earned (and they were not due the benefit in the first place!) The real problem is the fact the pensions were not funded in the first place. Since my career has gone so far south...I wonder if I can call my insurance company and ask them to go ahead and pay me my death benefit now....so I can have another chance at "life." This is all so sickening, and the snowball is going to keep getting bigger until it is stopped. UAL will probably make it under the wire. Greeter.
WorldTraveler
Corn Field
- Dec 5, 2003
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- 10,721
While I'm skeptical that UA's pension termination efforts will be derailed, it speaks very badly about United when legislation is introduced which specifically targets its practices. In an industry that requires as much help from Washington to survive as the airlines do, having a lasting black mark next to one's name will certainly come back and bite United. The employees of the four solvent legacy airlines will undoubtedly thank United employees for taking one in the shorts in order to save the solvent four airlines pensions.
Not a big deal. All it does is bans federal funds from bailing out UA's pensions. Guess what? PBGC isn't funded by tax dollars! So the amendment has no effect on the PBGC deal. Also the PBGC was in debt over $23 BILLION even BEFORE UA's pensions were transferred. Can federal money be used for that portion?
Also, I wish this attitude that UA could pay for all of it's pension obligations would go away. There simply isn't any money! The judge, the PBGC, and creditors agree. By the way, no mention made of UA's three-time refusal for the ATSB loan which would have preserved ALL pensions. A vote against the ATSB loan turned out to be a vote for pension rejection.
With Pensions, UAL is not able to attract exit financing. No exit financing means chapter 7.
Also, I wish this attitude that UA could pay for all of it's pension obligations would go away. There simply isn't any money! The judge, the PBGC, and creditors agree. By the way, no mention made of UA's three-time refusal for the ATSB loan which would have preserved ALL pensions. A vote against the ATSB loan turned out to be a vote for pension rejection.
With Pensions, UAL is not able to attract exit financing. No exit financing means chapter 7.
WorldTraveler
Corn Field
- Dec 5, 2003
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The problem in saying, Gopher, that UA doesn't have money to pay its pensions is that the same could easily be said about DL or NW. Washington is saying loud and clear that they do not want to bail out airline pensions. It's up them to decide whether they want to provide relief to the solvent airlines to keep them out of UA's position but you cannot logically say that UA doesn't have the money if you cannot or will not believe the same thing about the solvent four. Despite 2 1/2 years in bankruptcy, UA's costs are not markedly different from any of the other four solvent legacies' costs. UA never even considered or at least publicly mentioned supporting similar legislation to what DL and NW are requesting. UA wanted to take the apparently easy way out and walk away. It remains to be seen what the long-term effect will be but I doubt very seriously that UA will be around long-term and if it is that it will enjoy any of the respect and support that is so desperately needed in the airline industry. United becomes just another in a long list of business failures that will never be what they once were.
Don't start telling us that UA's pensions could have been preserved if the ATSB loan had been granted. The ATSB loan was denied on the basis of UA's business plan - as evidenced by the much deeper cost cuts which UA has enacted since the rejection.
Don't start telling us that UA's pensions could have been preserved if the ATSB loan had been granted. The ATSB loan was denied on the basis of UA's business plan - as evidenced by the much deeper cost cuts which UA has enacted since the rejection.
Went to the PBGC web page and took a look at some of the companies on the list.
Several United Way chapters. Why not have other chapters fund these unfunded pensions?
Venture Store Inc. is on the list. May Department Store spun them off, didn't fund the pensions, then Venture liquidated. Why not sue May Department Stores for the funding. They have been on a wild purchase spree over the past few years.
TWA is there, (of course) why not go after Carl Ichan? Did he not use the funds out of the pensions to leverage the company in a buyout? Or what about AA? Oh yeah, they purchased 'certain' assets in BKC7.
Eastern is there, (again, I know airline) why not go after Frank Lorenzo and his fourtunes?
Catholic Charities is on the list. Why not sue the Catholic Chruch of Rome? No, shut down the Catholic Chairites.
The PBGC is funded by insurance premiums paid by those companies that offer DB Pensions. The rate is $19.00 per participant per plan year. More for companies that are underfunded. That amount alone for UA to pay each year if there are 120,000, just in minimum premiums is $2,280,000 ($20,520,000 since 1997 the last time the rate was adjusted. Maybe the problem is two fold. One, companies are failing to fund pensions at adequate levels. But this is not just an airline problem. Two, the PBGC is not charging enough on the insurance premiums. (BTW the PBGC raised over 1.5 Billion in premiums in 2004)
The PBGC could seek to take assets away from United. But, at this point all the assets are promised to the secured creditors. Therefore the only recourse would be to seek for liquidation, thus placing 67,000 employees out of jobs, on the street, on unemployement, etc........So I guess the question will come down to is the Government willing to put 67,000 people out of work? Even if they did do that however, the liquidation will not raise enough money, ($4+billion?) to ensure the PBGC gets its money.
Whatever the outcome, it is obvious that the issue is not going to die with United. It is a country wide problem that needs to be addressed in reasonable terms, not by picking one company and making a point of them.
JMO
Several United Way chapters. Why not have other chapters fund these unfunded pensions?
Venture Store Inc. is on the list. May Department Store spun them off, didn't fund the pensions, then Venture liquidated. Why not sue May Department Stores for the funding. They have been on a wild purchase spree over the past few years.
TWA is there, (of course) why not go after Carl Ichan? Did he not use the funds out of the pensions to leverage the company in a buyout? Or what about AA? Oh yeah, they purchased 'certain' assets in BKC7.
Eastern is there, (again, I know airline) why not go after Frank Lorenzo and his fourtunes?
Catholic Charities is on the list. Why not sue the Catholic Chruch of Rome? No, shut down the Catholic Chairites.
The PBGC is funded by insurance premiums paid by those companies that offer DB Pensions. The rate is $19.00 per participant per plan year. More for companies that are underfunded. That amount alone for UA to pay each year if there are 120,000, just in minimum premiums is $2,280,000 ($20,520,000 since 1997 the last time the rate was adjusted. Maybe the problem is two fold. One, companies are failing to fund pensions at adequate levels. But this is not just an airline problem. Two, the PBGC is not charging enough on the insurance premiums. (BTW the PBGC raised over 1.5 Billion in premiums in 2004)
The PBGC could seek to take assets away from United. But, at this point all the assets are promised to the secured creditors. Therefore the only recourse would be to seek for liquidation, thus placing 67,000 employees out of jobs, on the street, on unemployement, etc........So I guess the question will come down to is the Government willing to put 67,000 people out of work? Even if they did do that however, the liquidation will not raise enough money, ($4+billion?) to ensure the PBGC gets its money.
Whatever the outcome, it is obvious that the issue is not going to die with United. It is a country wide problem that needs to be addressed in reasonable terms, not by picking one company and making a point of them.
JMO
The reason this was really introduced is not because of UA's pension but because the government has heard the warnings of Delta and NWA that they may have to dump their pensions.WorldTraveler said:
mrfish3726
Veteran
- Jul 7, 2004
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It will be funny in the end that AA will be the ONLY Legacy that will save face with their employees and fully fund there pensions. I think the governement will help AA out with that by extending the payments. How ironic it will be that UniTED DUPPED the employee groups again, just as they did with EFLOP. 
mrfish3726
Veteran
- Jul 7, 2004
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Gopher says, "Also, I wish this attitude that UA could pay for all of it's pension obligations would go away. There simply isn't any money! The judge, the PBGC, and creditors agree. By the way, no mention made of UA's three-time refusal for the ATSB loan which would have preserved ALL pensions. A vote against the ATSB loan turned out to be a vote for pension rejection."
There would have been money Gogher if UniTED management hadn't squandered & spent the billions they made off the last concessionary package AKA EFLOP. The blew billions of dollars in profits, while the employees lost 5.5B in wage concessions. Everyone seems to have forgotten that fact already. B)
There would have been money Gogher if UniTED management hadn't squandered & spent the billions they made off the last concessionary package AKA EFLOP. The blew billions of dollars in profits, while the employees lost 5.5B in wage concessions. Everyone seems to have forgotten that fact already. B)
WorldTraveler
Corn Field
- Dec 5, 2003
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agree, Bizman. Which is why I think UA will have served to help the cause of the four legacies while allowing them to allow a modicum of good will. After all, the legacy airlines are one of the most disliked industries in America. Losing tons of money because of failed and outdated business models and then asking the American people to repeatedly bail them out is exactly why the legacy airlines are so disliked.
The reason why I am so hard on United is because they are the hallmark of why Americans, including Congress, hate the legacy airlines. UA had (and probably still does have) the best route system in the world with the best access to world markets. Yet, UAL failed hard. Despite being employee-owned, employee relations at UA were some of the worst in the industry. As Gopher reminds us, UA has had a mindset of entitlement that is just plain repulsive to Americans which only heightens the refusal to want to help United.
American had a cost structure that was just as high as UA's on 9/11 and was even more complicated by the TW acquisition. Yet, AA has managed to stay out of bankruptcy and has position itself well for survival as has CO. DL and NW are likely to do the same because they have faced crisis before and learned to work their way out of it.
How UA and US has handed their pensions is reflective of the way they have run their businesses and in contrast to solvent four. The solvent four are still solvent because they have managed their businesses such that they confront and deal with challenges on their own instead of expecting others to solve problems for them. In the highly competitive business world that exists in the US of A, it is that can-do spirit that is very likely determinant of ultimate success.
The reason why I am so hard on United is because they are the hallmark of why Americans, including Congress, hate the legacy airlines. UA had (and probably still does have) the best route system in the world with the best access to world markets. Yet, UAL failed hard. Despite being employee-owned, employee relations at UA were some of the worst in the industry. As Gopher reminds us, UA has had a mindset of entitlement that is just plain repulsive to Americans which only heightens the refusal to want to help United.
American had a cost structure that was just as high as UA's on 9/11 and was even more complicated by the TW acquisition. Yet, AA has managed to stay out of bankruptcy and has position itself well for survival as has CO. DL and NW are likely to do the same because they have faced crisis before and learned to work their way out of it.
How UA and US has handed their pensions is reflective of the way they have run their businesses and in contrast to solvent four. The solvent four are still solvent because they have managed their businesses such that they confront and deal with challenges on their own instead of expecting others to solve problems for them. In the highly competitive business world that exists in the US of A, it is that can-do spirit that is very likely determinant of ultimate success.
