Ukridge Asks About United

[Ukridge]

In the one of the opening scenes of the movie ‘Godfather I’ a dying man lies in hospital pleading for his life to Marlon Brando in the figure of the Godfather. So strong is the man’s belief in the power of the Godfather that he ascribes to him even the power of life and death. I am in no way comparing the dying man to United other than to make the analogy to the role that a certain politician seems to be playing.

Many of you have read the numerous articles that have appeared in the FT this week past. Many of them detail the efforts by one of your politicians, a Mr. Hastert, to apply leverage to the ATSB to gain monies. Frankly even I as the casual observer am struck by the distastefulness of this move. Mr. Hastert only now feels it necessary to step in to the fray – two years after the process of bankruptcy? Where was he a number of months ago? If I were in the employ of United I would be offended by this. For some I am sure it raises hope of an approval – falsely IMHO. From the FT articles (I know many here have a much broader reporting base than just the FT) it appears that the board has made no promises of fast track review – a result may be made in days or years and even then from the reporting that I have read there is little or no hope of approval. Perhaps there are different signals being made, but this looks to be a certain dead end and United is wasting valuable time and energy pursuing such a course.

I then ask why did not Mr. Hastert lend his weight (which according to a picture of him is true in heft as well as political position) to the process from the beginning? Why the beleaguered pronouncements after the clock has expired and the whistle has been blown? I usually expect a little more subtle approach from grandstanding politicos but then I guess that even this is a lost art these days. Such a shallow move to try to step in after the fact and then stand before the voters and plaintively bleat that every effort had been made – poppycock!

Second. The FT made strong reference to your retirement funds being on the block. Would the cancellation (I trust this does not befall you) be enough to save United? With all the doom in the press I can only ask at what point after pay, benefits, and retirement have been seriously slashed does United become attractive to investors? How much must be cut per year and what is the retirement obligation per annum? I guess this is just one more thing that I do not understand – here you have a great network within Star – a far more formidable structure than many of the recent LCCs and yet you remain under assault from the press as something that should be driven from the pitch. Why is that? Is there not some point at which the entire concept starts to work again? If so, where is that point. Many of these articles proffer draconian suggestions but I have yet to read one that makes specific recommendations. In other words exactly how much should each staff member earn, how much exactly should they be paying for fuel, gates, and physical plant etc.. I have found the reporting (even from the august pages of the FT) to be very short of specifics. I really just do not understand that issue as I would think United in toto has an underlying value that at a certain cost structure would be a performing investment

Sorry about all the words but it takes a sentence or two to ask these questions!

Cheers and best of luck.

 

[Busdrvr]

First one must understand exactly who sits on the ATSB as voting members.

Edward Gramlich, former democratic head of the Congressional Budget Office, and now a Fed Governor (appointed by Democrat Bill Clinton). He is the "designate" for Allen Greenspan.

Brian Roseboro. Designate for the Treasury Department. Assumed to be a republican. He replaced Peter Fisher, Democrat, who voted No the first time around (more on that later). Ironically, Fisher is largely responsible for the current pension debacle due to his decision to discontinue issuance of 30 year T-bonds on Halloween of 2001. This led to one of the largest bond rallies in history, driving down bond yields to historic lows and forcing Pension plans to require a much higher balance to cover the lower "discount rate"

Jeff Shane. DOT rep. Assumed to be a republican. Voted to give UAL more time in an attempt to stop a straight up or down vote on the part of the other two members (a vote he knew UAL would lose). Replaced an equally pro-loan Kirk Van Tine, former lawyer for Jim Baker's law firm and member of Bush Fla Recount legal team. It's even been suggested that Shane is merely a "placeholder" to do Van Tine's bidding. DOT chief Minetta recused himself, as he's a married to a retired UAL F/A.

Arguably, Gramlich (again a democrat), is immune from pressure from the Bush administration. His term doesn't end until 2008. For passage, UAL would need BOTH of the other members.

Politics..... Keep in mind, the loan board accepted detailed inputs from UAL competitors in the decision making progress. It would be kind of like a planning commission asking Home Depot if the town needs a Lowe’s (two home supply retailers). so the board has already set a VERY strong precedent for it's susceptibility to lobbying.

Hastert vs Fitzgerald. Fitzgerald is a jerk. He is not running for re-election after one term (despite having more money than Davey Crocket) because the polls showed that because of the absolutely miserable job he has done representing his constituency he had no chance of getting re-elected. Hastert is a standup guy and is typically a consensus builder. He has been joined by leaders from the democratic side of the house including Nancy Pelosi in advocating for UAL. The reason Hastert stands out is that, as Speaker of the House" he DOES have the administrations ear, and if you want to make good sausage, you need good sausage makers on your side.

Did Hastert "help out" the last time around? Here is a link to a "Google" search on the subject. Note Fishers prominence in some of the stories. He's also now gone from the Treasury Dept.

Hastert Good, O'Neill, Fisher Baaaadd

UAL as an investment. In normal times it would likely be a "no-brainer". The problem now is the susceptibility of the ENTIRE industry in this post 911 world of different expectations concerning vulnerability to terrorism. An international carrier is not a "safe bet" at all, and the government has recently indicated that the spigot is turned off, and as illustrated by the ATSB, any additional help may require relinquishment of equity to the government. An equity investor or loaner assumes additional risk that were not know to exist prior to 911, thereby raising risk mitigating interests rates above what would be considered reasonable. The ironic twist is that killing the pension plans would lower costs to a point that the other majors, and likely most of the LPC's would not be capable of competing with their current cost structures, setting off another round of drastic salary reductions and pension terminations across the industry. Ironically, this would cost the government and the PBGC significantly more than the cost of the ATSB actually following it's legal mandate and offering an industry-stabilizing guarantee to UAL.

Anything else? 😉

 

[hp_fa]

Get your facts right. The begging was done by an undertaker named Bonesera, who was begging for justice for his daughter who was raped.

So, does Hastert = Bonesera?

 

[Ukridge]

"Get your facts right. The begging was done by an undertaker named Bonesera, who was begging for justice for his daughter who was raped."

That is not the scene to which I refer. I do not have the DVD, but I remember the very first scene being as I described. The scene to which you refer takes place a little later does it not?

 

[Light Years]

A certain someone's posts have a feel of Masterpiece Theatre, do they not?

 

[Ukridge]

Busdrvr - Thank you for the excellent explanation. I realized after I had posted my topic that I would be in danger of someone taking umbrage with my comments about your politicians. Fortunately you recognized that no ill-will was meant other than the question of why the scurry after the game.
Good reference to the sausage making remark. Bismark was it not?
Cheers

 

[Busdrvr]

Busdrvr - Thank you for the excellent explanation. I realized after I had posted my topic that I would be in danger of someone taking umbrage with my comments about your politicians. Fortunately you recognized that no ill-will was meant other than the question of why the scurry after the game.
Good reference to the sausage making remark. Bismark was it not?
Cheers

It's differant over here, ever since we kicked those Red Coats out it's been perfectly OK to bash the political class 😉 😛 . There are a great many ironies. Hastert on UAL's side is like a Tory having to go againt Blair to protect workers... Definately not the traditional rolls. 😀

 

[The Ronin]

Ukridge=James Lipton????

 

[whatkindoffreshhell]

UAL as an investment. In normal times it would likely be a "no-brainer".

Yessir! During the entire history of commercial air travel you guys are collectively about $6 bil in the red.

 

[The Ronin]

You are right about wasting time with the loan re-application. Now it's real crunch time. Ready to play????....Shed the retirement, abrogate the contracts and start a new airline with a known name, established hubs, equipment and routes.
United lives and wins....veteran employees lose....war is hell isn't it

 

[jimntx]

I then ask why did not Mr. Hastert lend his weight (which according to a picture of him is true in heft as well as political position) to the process from the beginning? Such a shallow move to try to step in after the fact and then stand before the voters and plaintively bleat that every effort had been made – poppycock!

Second. The FT made strong reference to your retirement funds being on the block. Would the cancellation (I trust this does not befall you) be enough to save United? With all the doom in the press I can only ask at what point after pay, benefits, and retirement have been seriously slashed does United become attractive to investors? How much must be cut per year and what is the retirement obligation per annum?

First off, realize that when Mr. Hastert was chosen as Speaker of the House of Representatives, his major asset was that he was a colorless, party hack with not many original thoughts of his own--a description provided by one of his constituents, my mother-in-law, who was a staunch Republican. He was picked because he is pliable. The Majority Leader, Tom DeLay, is so intensely disliked by even some in his own party that he knew he had no chance of being elected Speaker; so, the powers that be selected Hastert to be front-man for the far right pols who really control the party today.

I'm sure that Mr. Hastert thought that because of United's size that the ATSB wouldn't dare turn them down. Then when they did, he wanted to wait and see how the political winds might blow. Once he determined that there would be no political cost--and a possible political advantage--to him for supporting United's application, he decided to act. Of course, as you say, it was entirely too little, too late.

The pensions are another issue, but the fault again lies with the U.S. Congress, not with the elimination of the 30-year bond as BBD alleges--though that didn't help. The problem with the pensions can be divined from the phrase, Chickens Coming Home to Roost. During the booming 90's, the big corporations with defined benefit pension plans got Congress to give them permission to postpone pension obligations because they wanted the money to invest in new things, and they could afford at the time to pay pensions out of current earnings--rather like Social Security. Then when the economic wheels fell off in the early part of the Bush Administration, the biggies got Congress to allow them to postpone payments once more because they needed the money just to keep the doors open.

Well, those postponed bills have come due, and Congress, fearing for their political lives because so many little people who vote have been screwed over by corporate pension plan failures (see also, US Airways, Enron, et al), have decided that they are not open to allowing another postponement. Also, I think Congress is beginning to look ahead and see the cost to the Pension Benefit Guarantee Corporation if all the major airlines succeed in dumping their defined benefit plans on this quasi-governmental agency.

It's not just United. It's all the major airlines and a number of other Fortune 500 corporations that are facing huge pension plan payments these days. It's just that in United's case, it may mean the difference between emerging from bankruptcy or not.

 

[mweiss]

Jim, you certainly nailed Hastert's identity perfectly. Lest anyone forget, he was the second to be chosen as speaker of the house after Newt Gingrich of Georgia resigned in disgrace. Newt's first replacement did the same after word of his adulterous ways became public.

Normally, adultery wouldn't have been a major issue, except that at the time it was the issue. Why? Because the Republican party was so bent on destroying Clinton that way. Isn't it ironic that Clinton kept the job, while his Congressional counterparts lost theirs?

Apparently, however, the Republican party has decided that "sexual deviency" is no longer an issue. Go figure.

 

[jimntx]

Apparently, however, the Republican party has decided that "sexual deviency" is no longer an issue. Go figure.

Well, after all it was Mr. Ryan's wife that he was asking to perform sexual acts in front of other people. That's entirely different than if he left his wife at home and asked his mistress to perform said acts. Sanctity of Marriage, and all that, don't you know. 😛

 

[hp_fa]

UK:

The Bonesera scene "asking for justice" is the very first scene. It occurs in Vito Corelone's office on his daughter's wedding day. Bonesera returns the favor when Santino Corleone dies.

Back to the topic, does Bonesera = Hastert?

 

[Busdrvr]

Well, after all it was Mr. Ryan's wife that he was asking to perform sexual acts in front of other people. That's entirely different than if he left his wife at home and asked his mistress to perform said acts. Sanctity of Marriage, and all that, don't you know. 😛

Have you SEEN his ex-wife? WOW..... :wub:

He dropped out of the race today. When the republicans do something stupid, they do the honorable thing and resign. the dems just lie under oath about it 😉