Where Will It End?

"Pay no attention to the words on the labor contract..."
We saw it in the Steel industry.A certain company goes to bankruptcy court, and finds a judge that will give them the green light to go through with a bankrupcy, even though they may still be turning a profit, mearly to shed legacy costs. Once it was done, many others followed suit, in turn screwing over scores of retirees out of agreed upon benefits. Well, it has hppened again. United Airlines found a judge that will allow them to disregard it's obligations to it's retirees, and not even be in bankruptcy! Now it's just a matter of time before countless other corporations follow suit. The politicians won't touch this one!!


At 12:01 PM, Blogger Right Winger said...

What bothers me about all this, is United has had trouble up & down since the 1950's.

Do you think that in 50 years they could get their shit together?

Also, this whoe pension thing pisses me off as well, I always thought the Fed backed pensions? that was why I shyed aways from 401K programs, because they did not have a Gov't. backing!!

And the real clincher....

United is "Employee Owned" so they are in essence screwing themselves!!

Go Figure!

At 3:41 PM, Blogger EG said...

I think rightwinger is slightly confused. A Fed-backed pension plan (like United's) is a guaranteed-benefit program - the employee is guaranteed a certain income based on years of service, previous salary, etc. These have the same problems as Social Security - retirees outmatching the workers if the pension money isn't well invested by the company. The steel industry's pension plans did the same thing about 15 years ago.

A 401(k) program is privately invested money from both the worker and employer. Its output depends on the market and the vestment vehicle chosen by employee/employer.

Interesting that rightwinger would be against this since a 401(k) is, in essence, what Bush calls Social Security's personal accounts.

At 1:32 AM, Blogger Ron Schneider said...

EG, what about all the pensions that are backed by company stock (like ENRON) who then goes belly-up (like UNITED).

At 11:53 AM, Blogger EG said...

Enron's pension plan was a 401(k) program. Enron's contribution was in Enron stock. Because many employees didn't follow basic investment rules (diversify!), they lost a huge portion of their pension when Enron imploded.

At 7:26 PM, Blogger qualityg says said...

United Gets OK to Dump Four Pension Plans

qg says...

1) Check out this cartoon - http://cagle.slate.msn.com/politicalcartoons/PCcartoons/signe.asp

2) United Airlines' plan to terminate employees pension plans. The government’s Pension Benefit Guaranty Corp. (PBGC) will assume the employees' fund. Domas predicts... this will cause a trickle horizontal effect across the airline industry. When I keep reading company after company downsizing people out the door and stealing pension money I just think of the Tracy Chapman song "Revolution." I would now add "Middle Class People"

Poor people gonna rise up
And get their share
Poor people gonna rise up
And take what's theirs
Finally the tables are starting to turn
Talkin' bout a revolution


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