skykid said:
Clyde, I don't need you to tell me what a cargo company does, or what it takes to axe a pension. What I'm talking about is the trend that will sooner or later reach you, which is the end of traditional retirement plans. Not just the airline industry. I believe unless you work for the government (and even the military is seeing retirement benefits get smaller) pensions are going to be scarce. I'm not talking about next year, but I wouldn't count on a pension if I was just getting hired by UPS or ANY other organization. I'm fully aware that right now there is no legal way to end an employee group's pension plan outside of Ch11, without their consent. We have no idea what is going to happen with the PBGC in the next several years and what kind of sweeping changes are in store. On the wage issue, what is happening to the pax carriers is not happening in a vacuum, that's all I'm saying. I don't care if UPS made $6+ bil in profits, your management can point to the wages us toads flying pax are now making. I'm glad you got a good laugh from my post anyway! Hopefully I'm wrong on all this.
Gen, hopefully next year you can cut and paste this and show how I was wrong about Delta. I was certainly wrong about the number of retirees you predicted! I think the reason Delta will be pulling down the domestic schedule will be because of a massive effort to avoid Ch11 or because of Ch11. Unless all 80 of those flights you were talking about are making money or better yet making money going across the pond, I think adding capacity is a mistake. Northwest just canceled their planned growth for the year, UAL just pulled down domestic seats another 14% and added about the same international. Delta should be doing the same.
"Clyde, I don't need you to tell me what a cargo company does, or what it takes to axe a pension."
For starters, UPS is not a cargo company. True, we carry cargo in the bellies of our aircraft, but we are considered a transportation conglomerate with emphasis being an integral part of the customer's manufacturing process. i.e., logistics and supply-chain-management.
"What I'm talking about is the trend that will sooner or later reach you, which is the end of traditional retirement plans."
Doubtful. With SS all but dead and the government already dealing with the mess at UAL and USAirways, the last thing they want is to encourage healthy companies from dropping their pension plans needlessly. You might as well as included the big 3 automakers and every other industry in your statement. BTW, it wouldn't be good for a company as large and successful as UPS to just do away with pensions. First, this is a HUGE tax write-off for the company, as strong as their cash flow is, it would harm them to not have this. Second, if they were going to axe our pensions than they would also have to do so for the teamsters. Do you think truck drivers would find it fair that they should lose their pensions because the passenger airlines in the muck? Third, a lot of the managers receive a sizeble pension when they retire. I doubt they are going to vote themselves out of a pension. Most of them started out by loading trucks and have been promoted over the years. i.e., you are not going ot see any airline-style execs being hired here off the streets.
"I'm not talking about next year, but I wouldn't count on a pension if I was just getting hired by UPS or ANY other organization."
That should be the attitude of EVERYONE working EVERYWHERE, no matter how successful your company is. I'm planning on receiving a pension, but I am also going to retire on my 401k and personal retirement investments when I reach 60. My pensions (yes, two of them) are going to be gravy money. Personal finance is why some people can retire and not others.
"On the wage issue, what is happening to the pax carriers is not happening in a vacuum, that's all I'm saying. I don't care if UPS made $6+ bil in profits, your management can point to the wages us toads flying pax are now making."
Out of all of the expenses my company endures, the pilot salaries (fact) are the lowest. Our compensation expense is a spit-in-the-ocean compared to everything else. It would be extremely difficult for them to point to us and say that our wages are bringing down their profits, especially when there is growth and profits continue to increase.
Now, at the passenger airlines it's another story. Labor
is their biggest expense, right up there with fuel. The pax airlines are not diversified. Their bread-and-butter consists entirely on carrying a passenger from point A to point B. People are not going to take trains and steamships, but there are way too many seats chasing way too little folks. Combine that with people at certain carriers willing to fly for just about nothing, and you have a recipe for economic disaster with the pax side.
I would say the pax airlines are in a vacuum. Competition, expenses, supply-and-demand. These are not experienced by UPS and FedEx on the same magnitude. So, like I said before, you might as well be asking our truck drivers to take a paycut because of what is happening in the passenger airline industry.
The airline here is the smallest segment of the company. It generates the greatest amount of revenue. How many passenger airlines can say that about themselves?
Labor expense at the passenger airlines is definitely a hinderance, but it did not cause them to fall. Poor upper management and serious overcapacity is what did it. The labor expenses are just salt to an already much opened sore.
"I don't care if UPS made $6+ bil in profits, your management can point to the wages us toads flying pax are now making."
They have already tried that, and were not successful. All we have to do is point to ABX or FedEx and compare their wages to ours, i.e., other companies in the same type of business. Also, the financial records and growth (both forecasted and present) make it extremely difficult for them to cry woe is us.
"Hopefully I'm wrong on all this."
Hopefully the passenger side can recover and conversations like this one won't have to occur. Unfortunately, I don't think there is a need to limit pensions at most of the carriers, it's just a tactical management move. But regardless, I think there is going to be some serious consolidation before too long. Some carriers won't be around or will be merged into others, but that is going to be the next big step. When that happens, stability will set in, wages may come back up, and pensions/retirement plans will be more solid.
