Feds pressure American Airlines to save pensions

[Lear70]

You're probably not going to get much of a chance after the results from Florida Monday night... Pick one.

 

[Rick James]

Ps- you vote for Romney and fail to elect Obama- that's a failure. Open your eyes.

If it were only that simple. The current administration has shown it's true colors with Solyndra, Corzine, Jack Lew, Fast and Furious, 6.5 trillion in additional debt, 92+ rounds of golf, demonizing private jets from the steps of AF1, etc., etc., etc.. It's sad that some people buy into this black and white, good candidate vs. bad candidate mantra. The reality is they all are liars and are motivated only by greed and power. The true "failure" is that so many voters fail to realize those simple facts.

 

[HalinTexas]

I'd settle for consistent 7-8% annual return in a heartbeat. What do you realistically want it to be? Just curious. Sorry for the thread hijack.

"Like"

 

[HalinTexas]

The problem isn't that they were borrowing from their pension funds throughout the late 80's and 90's, the problem is that they were using the run-up in dot-com stocks and other over-inflated stocks to cash out huge payouts to senior management in the form of bonuses.

Then, when the market adjusted, as everyone knew it eventually would, there was a huge shortfall that couldn't be recouped because of the literally hundreds of millions of $$$ that had been sucked out of the pension funds.

This happened at many airlines, and what helped put the icing on the cake was 9/11, which allowed the airlines a real "out" financially to file bankruptcy, dump the pensions on the PBGC, and laugh all the way to the bank.

History... like Moulder said, "The truth is out there". Which reminds me, can anyone at Southwest shed a little light on your 401(k) funds? Ours suck, been stuck at 7-8% returns for a long while and was wondering how your funds are performing over the last couple years? Rumor has it you guys had one of the best fund managers in the biz working for you guys. Feel free to PM me if you don't want to thread hijack.

Back to the thread topic, oh yeah, American (management) sucks. From TWA to this... just not a good example of real leadership in the last 10 or so years there.

I'm not going to disagree with the first part, so much, because that's how the system worked! Companies were allowed to "make" money off of the pension funds. Like the dot-coms, ENRON and real estate, there was lots of money to be made with no end in sight. That was there incentive to create them in the first place. When it's finally found out to be a scam and a liability, they want out of them. The only way they work is growth, growth, growth, which is an impossibility. If you want stability I'm sure you can find a treasury with a 2.5% return.

 

[jonjuan]

Ps- you vote for Romney and fail to elect Obama- that's a failure. Open your eyes.

If your mentor gets 4 more years, kiss economic growth in this country, and your airline, goodbye.

 

[densoo]

The problem isn't that they were borrowing from their pension funds throughout the late 80's and 90's, the problem is that they were using the run-up in dot-com stocks and other over-inflated stocks to cash out huge payouts to senior management in the form of bonuses.

Sad thing is that this was against the law for a long time. In the 70s they passed a law requiring adequate funding of pension obligations AND that they couldn't touch this money for anything but to pay the employees' pension.

During the dot com run up these invested pensions funds skyrocketed. Corporations went begging (and bribing) to Congress to allow access to the pensions for the purpose of investing in their own company to create jobs. Great sound bite. Congress allowed access to the funds--without restriction. That's when we saw the average CEO salary climb to 400 times his average employee, up from 30 times average employee in the early 80s.

Since then, it's just been a money grab.

 

[Full of LUV]

Sad thing is that this was against the law for a long time. In the 70s they passed a law requiring adequate funding of pension obligations AND that they couldn't touch this money for anything but to pay the employees' pension.

During the dot com run up these invested pensions funds skyrocketed. Corporations went begging (and bribing) to Congress to allow access to the pensions for the purpose of investing in their own company to create jobs. Great sound bite. Congress allowed access to the funds--without restriction. That's when we saw the average CEO salary climb to 400 times his average employee, up from 30 times average employee in the early 80s.

Since then, it's just been a money grab.

Don't have the time to look it up now, but in '99 - '00 DAL lobbied congress to allow them to put ADDITIONAL $500 MILLION INTO pension fund (ostensibly to avoid income tax but in the pension fund nonetheless) but congress said NO, it's profit, pay the corporate tax and do not prefund pension plans when times are good to level the load for when times are not.