Saturday :: Aug 21, 2004

Extra Charge For A Parachute

by pessimist

United Airline Pensions May Go

"We understand the stress and concern this has imposed on our employees and retirees."
- James Sprayregen, United Airlines attorney

But you know they don't really care - the heartless and cruel feel no pain, especially not someone else's.

As if a precursor to the upcoming loss of overtime pay for the actively-working, pension rights are also being lost by many retirees. It's been a while since the retirees of McDonnell-Douglas lost theirs, but United Airlines is had at work showing that the issue still lives. Once again, those users who are the corporate world renege upon their promises when the survival of their cash cow is at stake.

United, which never really recovered from the 9/11 attacks and entered Chapter 11 bankruptcy in December 2002, is attempting to emerge from that bankruptcy. They have already hammered their employees into agreeing to large givebacks of wages and benefits, so rather than cut executive staff and their perquisites, they go after those who have already 'done their time' - the retirees.

After all, why pick on someone who can fight back?

An attorney for United claimed that federal bankruptcy laws override employee-benefit rules that require companies to make regular contributions to their pension plans and so would be 'within its rights' to terminate its employee pension plans, which is the economic equivalent of taking about 120.000 people and throwing them over the side. They must be thinking that all these folks are into walking upon the economic waters and won't sink, so that would make it OK for the company to do so. After all, aren't promises made to be broken? So it seems in the corporate world.

We are supposed to feel sorry for United, but not for the retirees:

United faces half a billion dollars in pension contributions in the next two months and $4.1 billion by the end of 2008. The government recently rejected its bid for a $1.6 billion loan guarantee, and rising jet fuel prices are expected to cost the airline $1 billion more this year than expected.

So in order to lighten the economic load:

In July, United deferred a required quarterly pension fund payment of $72 million, characterizing it as a "huge financial burden" and saying it planned no further payments while in bankruptcy. United employees have been dealt steep wage and benefit cuts as the airline has restructured. United's pension plans currently are underfunded by about $8.3 billion.

"We understand the stress and concern this has imposed on our employees and retirees," United Airlines attorney James Sprayregen told U.S. Bankruptcy Judge Eugene Wedoff. "However, we believe we would be doing the court and our constituents a disservice if we didn't communicate where we are in our thinking." Sprayregen said the company's amended financing plan does not preclude it from contributing to the pensions if the money is available. "Given the magnitude of further cost reductions needed to create a viable business plan and attract exit financing, termination and replacement of all our defined benefit pension plans likely will be required," the airline said in the filing.

Constituents? Since when were these guys elected? It must be the cozy ties these guys have to the government, which was once intended to regulate their activities, not to protect them from the consequences of their actions.

So who gets to pick up the coverage of these retiress? The government-financed Pension Benefit Guaranty Corp.!

PBGC is not funded by general tax revenues. PBGC collects insurance premiums from employers that sponsor insured pension plans, earns money from investments and receives funds from pension plans it takes over.

I haven't looked, but I'd be willing to bet that their government funding this year doesn't match what it got last year, and that next year will be less again. After all, the Bush (mis)Administration is nothing if not sensitive (there's THAT word again!) to corporate issues, and the cost of insuring employee benefits is one of the bigest expenses corporations have. They deserve relief more than individuals, don't they? Thus, we'll let PBGC take responsibility for up to another $6.4 billion in pension coverage. They don't have that much to do anyway:

PBGC pays monthly retirement benefits, up to a guaranteed maximum, to about 459,000 retirees in 3,287 pension plans that ended. Including those who have not yet retired and participants in multiemployer plans receiving financial assistance, PBGC is responsible for the current and future pensions of about 934,000 people.
But none of this matters to the cronies of George W. Bush. The little people are for using and discarding when their usefulness is exhausted. I'm sure the retiress' display in court of unity and anger didn't phase the United attorneys one bit:
... dozens of United retirees [were] in the courtroom, many wearing T-shirts reading: "Pensions are promises that cannot be broken."

Shirley Telegdy, who retired three years ago after 37 years as a United customer service representative, said before the hearing that she relies on her pension payment for virtually all her income.

"I thought I could enjoy retirement at 62," she said. "Now I have to give up everything."

Hi! Welcome to Wal-Mart! Would you like fries with that minimum-wage part-time job? Maybe you should all die off and decrease the surplus population.

Are we going to begin to see efforts by the corporate world to promote the Indian practice of suttee, the one where the widows whrow themselves on their husband's funeral pyres so that they would not be a burden to anyone? Will they try to promote the idea that those past working-age should just wander out into the winter storms like the Native American eldery traditionally did?

Have we come to the point where a person is only as valuable as they can make someone else rich?

If so, I really hope Jesus is coming - and that he's really pissed!

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pessimist :: 4:37 AM :: Comments (5) :: Digg It!