Pensions.......

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  • #46
World says: "let's put this revenue issue to bed once and for all. Refer to the link below, flip to item 6 (page 14) and you will see that UAL in 2004 generated just 79% (actually rounded up but I'm being generous) of the revenue they had in 2000...."

Yeah World, no kidding. I knew that. The problem I had with your recent revenue "predictions" was that you were telling everyone on the forum that revenue declined YOY from '03 to '04 and that was clearly not the case. I could care less what the relationship between revenue between '00 and '05 is as obviously we know the relationship between those numbers sucks because WE'RE IN BANKRUPTCY!! And, more importantly, neither do the 4 banks who have offered us exit financing. They're looking forward, not back.

World says : "UA has not been paying towards its DB plans for months and you know that. "

No World, I don't know that. You said we haven't been paying our pensions. Two DIFFERENT STATEMENTS. You see, World, for some employees on UAL property, their pension consists of two parts, qualified and unqualified. For some people on the property, particularly pilots, the unqualified portion (i.e. the portion that is paid directly from UAL's treasury), is up to 1/2 their total pension payment. So when you say UAL hasn't been paying towards its DB plans, you are not entirely correct. And when you say UAL hasn't been paying any of its pension obligations, you're flat out wrong. Get it?

Here's the problem I have with the rest of your analysis. Everything you say may or may not turn out to be true. Do you know what I do? Instead of trying to analyze every little section of the industry and its effect on UAL I look at the "end result." The end result to me, are the company's financial results. Despite the picture painted as to how UAL is screwed and DAL is so wonderful, I look at our first quarter results. First of all, but for fuel, excluding bankruptcy items (because we won't be paying bankruptcy items when/if we exit) we would have made an OPERATING and NET profit.

But you know what? To sit around with our fingers crossed, hoping fuel prices go down is no way to run a business. We "lost" a little over 1B for the quarter. A little over 700M of that figure is due directly to bankruptcy costs (see previous paragraph). Remove it to evaluate a post bankruptcy UAL. 213M of that was due to depreciation and amortization. Does that mean 213M flew out the bank account? Nope. We can have years to make up for the effects of depreciation. So removing that figure, as it isn't a direct drain on our day to day bank account, we're looking at about a 85M net loss. Do you think we're going to save 85M/quarter on shedding the pensions? I think so but I'm not entirely sure. We'll definitely save a good chunk of that, at least. Do you think we're going to reverse the 120M loss for the quarter due to regional operations over time as high cost express carriers like Air Wisconsin are replaced over time(http://biz.yahoo.com/prnews/050513/cgf004.html?.v=9)? Yes, we will. And these numbers are from a traditionally weak first quarter. Further, the non-fuel cost cutting is not even done yet. I know of a few things, just in Flight Operations, that are still being implemented and when fully implemented by the end of the year, should save millions.

So despite your predictions of future revene erosion, yields getting trashed, Independence adding a couple of Airbuses to the transcon markets, DAL entering markets with "superior" service, etc., etc., I'm just going to sit and wait and watch and see what the final results have to say. If we keep going in the direction we're going, we don't have a major strike on the property, we don't have a hull loss, and we don't have a major terroist attack or other US economy changing event, this pessimist actually sees the light at the end of the tunnel getting a little brighter.
 
Broke@SFO said:
Turning over the pensions to the PBGC doesn't mean the pensions are forever gone.  The PBGC guarantees benefits up to about $44,000 per year I believe.  So for most, they probably will not see much, if any reduction in benefits.  Of course, the pilots and high level management will be the ones that take a bath.........

This is total Bull S***!!!!!!!!!!!! As a mechanic with 35 years of service and 60 years old I would have recieved  $3,045.00 per month from the terminated plan. Under the PBGC now I will get $2,173.00 per month for a reduction of $879. per month. Or 29% reduction per month. This is a substantial reduction. CEO Glen Tilton has opted to keep his pension of 5 million because he states that he has a contract. What about our contract? This is what he considers as "equal sharing of the pain".
[post="268467"][/post]​


Broke,

The problem with your figures as I see it (not that you figures are wrong but just the premise) is that you retire at 60.

This is where the pilots (and anyone else) get the biggest hit because the PBGC guarantee drops off dramatically for "early retirement" from 65. Even though we are required to retire at that age. If you check what the PBGC would pay you at 65, I think you will find your monthly benefit would not drop nearly as much, if at all.

Does that mean you have to work those extra five years just to get the same money? Probably. But that is a choice one has to decide for themselves. Work longer or take the hit. Not saying its right but if you are not already retired then you have that option versus someone already gone at 60 or forced to retire at that age.

DC

PS AndI am in agreement about Tilton.....
 
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  • #48
Concerning Tilton's pension....and it's a sizeable one I agree, but........

Many people complain on this forum that they want a quality CEO. I disagree with what most people on this forum consider a "quality" CEO, so we'll leave it at that. Let's just say that there was a committee that searched for a CEO candidate. And this committee realized that although we are a 15 billion dollar company, it was going to be very difficult to find an experienced CEO with bankruptcy experience and only offer the salary Tilton's making now. You guys think he's overpaid. The reality is that for a guy running a 15 billion dollar company, he isn't making that much in salary and bonus. He knows he'll get his if he can lead a successful exit from bankruptcy, which is why he took this "small" salary. But I digress......

So here's UAL, looking for an experienced CEO, and they have little to offer him up front. So they search high and low for the most qualified candidate, probably get laughed at when they discuss the salary/benefit package with most of the candidates, and finally come to the conclusion that Tilton is the best candiate willing to take the job. The only problem is that Tilton has built up a 4.5M pension at his current employer. I wouldn't be surprised that most, if not all of the candidates they considered were in a similar situation. If you're looking for talented, experienced executives, they've obviously been working somewhere else to gain that experience and have a pension benefit built up at their respective companies.

So you guys want talented, experienced management at UAL, but you don't want to pay them what the going rate is for a 15 billion dollar company AND you want him to walk away from his current employer's 4.5 million dollar pension or even worse, tie his pension in with that of a failing company? Obviously, that would never happen and we'd still be looking for a new CEO today if that was the criteria that we were going to use. So UAL, in order to attract him to the UAL position, put his 4.5M in a totally separate trust away from UAL. There is NO WAY we would have attracted anyone with any experience to fill the CEO position of the company if we hadn't been willing to take that step.

That's what's really going on with Tilton's pension. As I have stated in previous posts, if you take pleasure in management personnel suffering financially as well, most (and if I'm not mistaken-all) of our previous management people are losing their pensions to the PBGC.
 
driver,
You obviously see the same facts I do but choose to interpret them differently. That is obviously the HOPE that makes you get up in the morning and go to morning and I sure don't want to take that away from you. Neither do I want you or any other UA employee to fail to realize the unbelievable challenges that still await them.

and by the way, the pension termination is not quite a done deal:

Democrats seek to stall pension takeover deals
Bill proposes 6-month moratorium on handovers to PBGC
By August Cole, MarketWatch
Last Update: 2:09 PM ET May 13, 2005


SAN FRANCISCO (MarketWatch) -- Just days after United Airlines passed off billions in retirement obligations to the government's pension agency, two Democratic lawmakers introduced legislation Friday to stall the takeover, and others like it, by the Pension Benefit Guaranty Corp.



Reps. George Miller, D-Calif., and Jan Schakowsky, D-Ill., proposed a 6-month moratorium on pension handovers until Congress can pass some kind of pension reform. The legislation would include United's deal.

In the cash-strapped industry, United is being watched.

more here:
http://www.marketwatch.com/news/story.asp?...teid=mktw&dist=
 
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  • #50
I don't make interpretations because of "hope." I just look at the facts (the numbers don't lie or people go to jail) and if UAL makes it out of bankruptcy as I suspect it will, great. If UAL doesn't make it for any reason, I'll find another job. I don't "hope" for things that in the "big picture of life" are as inconsequential as a job with United Airlines.

More unbelievable challenges await us? Really? Care to enlighten us? The employees of the company have watched their company shrink, they have watched their co-workers get laid off, they have made signficant pay and work rule concessions, they have watched their jobs become outsourced, they have just lost their pensions (see next paragraph), and yet more unbelievable stuff awaits us? I can't wait to hear about this!

More proposed legislation to save our pensions? Now that's funny. I won't hold my breath. You can probably add this proposed legislation to the scrap heap of other political solutions/proposals that have been put forth since we were denied the ATSB loan many, many months ago.
 
WorldTraveler said:
...and by the way, the pension termination is not quite a done deal:

Democrats seek to stall pension takeover deals
Bill proposes 6-month moratorium on handovers to PBGC
By August Cole, MarketWatch
Last Update: 2:09 PM ET May 13, 2005


SAN FRANCISCO (MarketWatch) -- Just days after United Airlines passed off billions in retirement obligations to the government's pension agency, two Democratic lawmakers introduced legislation Friday to stall the takeover, and others like it, by the Pension Benefit Guaranty Corp.

Reps. George Miller, D-Calif., and Jan Schakowsky, D-Ill., proposed a 6-month moratorium on pension handovers until Congress can pass some kind of pension reform. The legislation would include United's deal.

more here:
http://www.marketwatch.com/news/story.asp?...teid=mktw&dist=
[post="269313"][/post]​

Right, because the Democrats have so much power in the House of Representatives these days, and they'll have no problems convincing many Republicans to go along with them.

-synchronicity
 
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  • #52
I agree synchonicity. I don't think the big guy in the White House is a fan of defined benefit pension plans. But the legislation makes for good headlines, just like the other ones did!
 
UALdriver:

You NAILED it. I could not agree with you more (about Tilton's pension).

Having said that, however, what you have so-well-articulated will not minimize the anger, bitterness, and sense of betrayal that some employees feel. They feel that promises that were made to them in better times, have been broken. And they have a right to their feelings. Plus, in all fairness, I think the pension dump could have been handled in a way where the rank-and-file didn't feel as though they were being backed into a corner and having it FORCED upon them.

I believe that strong leadership entails both financial as well as HUMAN finesse. I think that our management team has some work to do on the human side of it. But, your point is nevertheless well taken, and in my case, you are preaching to the choir.

Best,

Jamake1
 
ualdriver said:
I agree synchonicity. I don't think the big guy in the White House is a fan of defined benefit pension plans. But the legislation makes for good headlines, just like the other ones did!
[post="269323"][/post]​
I agree with ualdriver. This administration wants to do away with traditional pension plans. Imagine this scenario: United dumps it's pensions on the PBGC, the other airlines follow suit, followed by all the companies in other industries. The PBGC is overwhelmed and goes broke. Then the PBGC goes to a republican controlled congress and white house and says a tax payer bailout is needed (just like the S and Ls). The republican controlled congress and president then give them the middle finger; thus everyone losses their pensions. After this, the final assault on the working class; privatization of social security so it can be stolen by the Ken Lays of this world.
 

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