Another bk court my abbrogate a contract

[Boeingman]

http://www.nytimes.com/2004/11/05/business/05air.html

Well I think we have learned from our friends at USAIR that management will keep coming back and break promise after promise. Now, it looks like it will be the same saga at UAL.

When is ALPA going to wake up (or all of us for that matter) that the courts should not be used to break contracts, destroy retirements and change work rules?

 

[mnboyev]

I have never written a letter to a congressman... sad but true... I think I'll draft one today... this garb has to end. Good employees cant work their whole career and be told .... 'sorry we have to be viable to compete' ?? Your pension... well it's gone.. As they skip along a path to remake themselves...

 

[storminpilot]

http://www.nytimes.com/2004/11/05/business/05air.html

Well I think we have learned from our friends at USAIR that management will keep coming back and break promise after promise. Now, it looks like it will be the same saga at UAL.

When is ALPA going to wake up (or all of us for that matter) that the courts should not be used to break contracts, destroy retirements and change work rules?

Instead of being mad at the bankruptcy court, why aren't people more mad at United for painting aircraft TED or not having a plan to exit bankruptcy other than "all we got to do is bleed longer than Delta or American and then we will be OK"?

Why is a company allowed to do stupid things (spend excesive amounts of money to paint aircraft, and buses and hand out free coffees, etc.) when we all know Shuttle by United didn't work and then not fund the pensions?

My prediction: Gordon Buthune retires from Continental in two months and then shows up at UAL. Somone please turn that Titanic around.

 

[vc10]

Understand something: to distress terminate a pension plan, a company must first be in bankruptcy (meaning that the value of the stock is on the way to zero) and must prove to the bankruptcy court judge that without terminating the pension the company must liquidate.

If the company liquidates, what happens to the pensions? That's right, they're terminated. In other words, to distress terminate a pension plan the company must first of all blow up its shareholders and secondly must show that the alternative to distress terminating the pension plan is... to distress terminate the pension plan.

If you want to get mad at anyone, get mad at Congress for writing pension funding rules that let pensions become underfunded. If we're going to have traditional pension plans at all, companies should be forced to purchase insurance for them from AAA-rated insurance companies so that whatever happens to the company the pension plans are OK. But that would cost a lot so Congress will never make companies do that.

Still, you wanna blame someone? Blame Congress. They make the law. They're the ones who sold you down the river. Oh, and who in Congress are the most in bed with industry? That's right, the Republicans.

I have never written a letter to a congressman... sad but true... I think I'll draft one today... this garb has to end. Good employees cant work their whole career and be told .... 'sorry we have to be viable to compete' ?? Your pension... well it's gone.. As they skip along a path to remake themselves...

 

[skykid]

Why is a company allowed to do stupid things (spend excesive amounts of money to paint aircraft, and buses and hand out free coffees, etc.) when we all know Shuttle by United didn't work and then not fund the pensions?

storminpilot, could you please post the data you use that shows Ted is a failure? I'm very interested in seeing that. Could you please post and explain the percentage of airbuses used for Ted that needed painting anyway? Also, is the new transcon Premium Service launched last Friday on 757s between LAX and JFK doomed to failure as well? My last question is, since there is no plan, are these changes, like the shift to international markets,Ted, Premium Service, and the updated cuts to include the squashed pensions (since the loan guarantee was turned down), happening as random events, sort of like Darwin's macro-evolution theory?

 

[Publishers]

Unfortunately employment, pensions, retirement, none of these things are guranteed in life. Companies fail ==it is part of the business and freedoms that we enjoy.

We do not want to be like Russia where the joke was -- we pretend to work and they pretend to pay us.

 

[flyguppy]

The best part

My favorite is, instead of guaranteeing (not giving, loaning, etc.) $1.2B in loans for UAL, the gov't and the american taxpayer are going to be on the hook for about $6.5B in pension liability.

It wouldn't have cost a dime for the guarantee, but Bushy is now on the hook. Take these 6.5B and stick it up your a&#, Mr. President, sir.

 

[Boeingman]

My favorite is, instead of guaranteeing (not giving, loaning, etc.) $1.2B in loans for UAL, the gov't and the american taxpayer are going to be on the hook for about $6.5B in pension liability.

I don't think that is correct for 2 reasons. If UAL's pension liability is $6.5B, remember the PBGC doesn't payout full value of a pension that is owed to an employee. They will be on the hook for a much lessor amount based on a term of employment and age at retirement. Also, you're forgetting one other very important piece of the equation. The PBGC will be the first in line in a liquidation or sale of assets if UAL defaults on the pensions. They will become a very tenacious creditor. Look at their participation during the EAL liquidation and rest assured they will get their money.

The ATSB number crunchers didn't like what they were seeing with UAL's financials and felt a loan could not be repaid. I don't think the question of the PBGC's involvement in the future had anything to do with the denial.

Given the precarious financial picture at UAL right now and the fact that they will default on the DIP covenants, from the governments view it was the right decision.

 

[fam62c]

RE: The Best Part

"My favorite is, instead of guaranteeing (not giving, loaning, etc.) $1.2B in loans for UAL, the gov't and the american taxpayer are going to be on the hook for about $6.5B in pension liability.

It wouldn't have cost a dime for the guarantee, but Bushy is now on the hook. Take these 6.5B and stick it up your a&#, Mr. President, sir."


The government gave USAirways a government backed loan and they STILL defaulted on their pensions and put the taxpayers on the hook. The taxpayers were going to be on the hook for UAL's pensions anyway, at least now UAL won't stick it to the taxpayers twice by dumping the pensions AND defaulting on a taxpayer backed loan if they ultimately fail to survive. This industry is in deep trouble partially because there is way too much capacity. Propping up failing airlines just weakens the entire industry.