U.S. to Take Over UAL Pilots' Pensions

[skykid]

I offer direct quotes from the NY Times and the head of the PBGC and all you offer is opinion, yet you have the gaul to tell me I am wrong, start coming up with something other then your opinion.

Is that a joke? I think you are confused. In other words, the stuff you are quoting doesn't support your arguement. You have managed to convince yourself that the PBGC stating they will take steps in court now to take control of the pilot pension means they are going to force a liquidation (which they can't). Here's the bottom line - if it is decided in court that United has to dump the pensions to exit CH11, the PBGC is going to get them.

Why did the PBGC go after the pension of the UAL pilots on 12/29?

So they don't get stuck with another couple hundred million!! And possibly in an attempt to stave off the other pensions. "The pension agency hopes to assume the plan before additional pilot benefits acrue, reducing the agency's potential liabilities by $140 million. The agency also hoopes taking the plan would give UAL greater room to keep its other three pension plans." --WSJ 12/31/04. Maybe you can show me anywhere the head of the PBGC has said his qasi government agency is going to liquidate United, or has the authority to do so. What I saw said they were going to assume responsibility for the pension. The PBGC has been talking tough like this for months, but all the analysis I've seen points to the fact that their options are very limited. Maybe you can list all the companies they have liquidated instead of assuming pensions? If the PBGC could simply sieze the assets of a company, what do you need them for? If they could do that, why do they have a deficit of 23 billion? As far as your direct quotes, I'm still trying to figure out how you have come to the conclusions you have from your quotes. We agree to disagree. Take care.

 

[tranceport]

I think my timing has been off, but so far everything I have said will happen to UAL has in fact happened. I am surprised it has gone on as long as it has. My mistake was to believe the creditors would give so much leeway to date. Also, who would have predicted the government would of given money? I was also one of the ones who said you'd never get the ATSB loan as well.

You state: "...who would have predicted the government would of given money?"

How much did they get and when?

One thing is for sure, the latest sale of Orbitz to stay within the DIP covenants is like burning your furniture to heat the house.

CENDANT purchased all outstanding shares of Orbitz from all original issuers (all the airlines that founded it, including UAL) and class B shares of stock this past fourth quarter. They weren't burning furniture with this sale b/c the shareholders approved the very generous offer of $27 a share.

 

[CitationLover]

So they don't get stuck with another couple hundred million!! And possibly in an attempt to stave off the other pensions. "The pension agency hopes to assume the plan before additional pilot benefits acrue, reducing the agency's potential liabilities by $140 million. The agency also hoopes taking the plan would give UAL greater room to keep its other three pension plans." --WSJ 12/31/04. Maybe you can show me anywhere the head of the PBGC has said his qasi government agency is going to liquidate United, or has the authority to do so. What I saw said they were going to assume responsibility for the pension.........

probably a lot more than a couple hundred million. i would guess around 1-1.5 billion underfunded. the pilots were targeted cause i'm sure their plan is

a) has the most benefits
b) has the most liability exposure (prob greater than all other 3 combined).

 

[AA717driver]

The TWA DB plan was frozen initially, not terminated. It was also done outside of bankruptcy.

The PBGC MUST do whatever is necessary to remain solvent. I need the $109.00 a month to keep my beer supply going. I am confident the UAL pilots will do the right thing and step up to save the PBGC for the good of the industry. TC

 

[Boeingman]

You state: "...who would have predicted the government would of given money?"

How much did they get and when?

You are kidding right? Post 9/11 payouts to all airlines?

CENDANT purchased all outstanding shares of Orbitz from all original issuers (all the airlines that founded it, including UAL) and class B shares of stock this past fourth quarter. They weren't burning furniture with this sale b/c the shareholders approved the very generous offer of $27 a share.

http://biz.yahoo.com/prnews/041221/cgtu038_1.html

Read the last para., then let me know if you need any additional info. While what you posted may be correct in fact, I am talking in terms of dollasr and cents to UAL's bottom line.

 

[Boeingman]

B man,

I could not agree with you more.

Sounds like their denial can be a direct result of fear. I've been down that road before.

You made a great move to get out of the airlines. Best of luck to you.

 

[G4G5]

skykid
Is that a joke? I think you are confused. In other words, the stuff you are quoting doesn't support your arguement. You have managed to convince yourself that the PBGC stating they will take steps in court now to take control of the pilot pension means they are going to force a liquidation (which they can't).

They also can't bypass the BK courts and go directly after just the pilots pension (especially when ALL parties involved are opposed) but they did............

Here's the bottom line - if it is decided in court that United has to dump the pensions to exit CH11, the PBGC is going to get them.

That's the kindergarden version.
The big kid version revolves around the T/A between the pilots and UAL mgt.
The T/A states that:
If any pension remains in place, then the UAL pilot pension MUST remain in place. Bottom line the PBGC doesn't like this
It also states that all concessions across the board must be equal, the pilots can't be forced to give an unfair amount, the PBGC doesn't like this either.
The T/A states that IF the pilot pension is turned over to the PBGC, a new pension will be put in place. The PBGC HATES this and has come out and said that it would be a dangerous precendent and that they WILL take appropriate steps.
The PBGC is well aware of the T/A and its most interesting point that states:
Company will not terminate and will oppose efforts to terminate
prior to the earlier of May 1, 2005 .


So your bottom line point about getting the pensions is moot. If the T/A passes UAL mgt gets to dump the pension debt while the UAL pilots get a new pensions and the PBGC gets left holding the pension bag and the billions of dollars of debt. Not to mention the very real possibility that this would set the legal precedence for not just every airline but every company with underfunded pension debt. Yeah, that's going to happen. Now we are talking big numbers way beyond the $140 mill you refer to

If the T/A passes, by trying to take over the pilots pension they will still get the pensions but they be forcing UAL into liquidation(read on). This inturn get the PBGC a chance at some much needed cash to cover the pension defecit and it will be tellingl every other company with an underfunded pension, "don't try dumping it on us, or else"

What do you think an opposition to the PBGC planed take over by UAL mgt will lead to? Something good? No, Liquidation.


In order to take over the pilots pension, the PBGC must prove in court that the current UAL mgt plan to exit BK is not a valid option and that they are the best option for the pilots pension. They have to prove this in BK court, which is what they have set forth to do. If they prove their point they have inessence told the court, the creditors and the world that the US gov does not believe UAL can restructure

ALPA's take:
"As the P.B.G.C. is well aware, there are no grounds for the termination of the pilot pension plan," the statement said. If United does oppose immediate termination, it added, the process would move to bankruptcy court, which would end the plan only if it determines that the airline could not survive otherwise.

Liquidation


"The pension agency hopes to assume the plan before additional pilot benefits acrue, reducing the agency's potential liabilities by $140 million.
If they wanted to save some money, they could have went after the pension last year. Why did they choose this week? They want to influence the out come of next weeks T/A. Why?

The agency also hoopes taking the plan would give UAL greater room to keep its other three pension plans."
Because, they know that if it passes it is going to be impossible to seperate the pilots pension from the other labor groups because of the "me too" clause of the T/A

Maybe you can show me anywhere the head of the PBGC has said his qasi government agency is going to liquidate United, or has the authority to do so.

Are you kidding? When is a government official ever allowed to come out and say he favors the liquidaton of a major corporation. Think about the political ramifications, he can't ever come out and say it directly
BUT he can lead the horse to water.

 

[skykid]

A better case of mixing apples and oranges with snippets of political, union, mgmt., and newspaper rhetoric could not have been made. Bravo.

Apparently I'm not the only one who is puzzled by G4G5s arguement. Happy new year! Take care.

 

[G4G5]

Traceport,
See if the above post is eaiser to follow, New Years is not the best time to be writting a post like this, if you get my drift.


Furthermore, UAL is NOT making a promise for a new defined BENEFIT plan with the new TA (UNLIKE the LTV steel case where LTV distress terminated their defined benefit plan only to offer a new one a couple years later. In this case, UAL is NOT offering a new defined BENEFIT plan- they are offering an additional % to a defined CONTRIBUTION plan....a plan that they are showing they can still make without breaking current minimum cash requirements stipulated by the Creditors and approved by the court)

This is what has the PBGC so angry.
Take a close look at this part of the T/A:
Pension Contributions:
Current 9 % B Plan continues,
C Plan defined as an additional 6% contribution to PDAP,
Optional - the January 01, 2008 1.0% pay raise can be converted to a C Plan contribution making it a total of 7% at the MEC's option.
If a new DB plan is started for any employee group, Pilot group
has the option to continue CPlan or accept comparable plan

The PBGC has come out and said that this is a dangerous precedent and they WILL oppose it.

They are in essence saying you can not dump your underfunded pensions only to start up a new one. Anyone who think that the PBGC will let UAL just dump their debt on the government is kidding themselves. Just by the very nature of this T/A the gov must go on the offensive and nip this in the butt once and for all.
What happens if they allow this and take on the UAL pensions. The PBGC is looking at a massive pension dump by every under funded pension in the country.

 

[WillowRunVortex]

It comes from you, the tax payer.

Please tell me that I wont be contributing to some retired United pilot's pension with my tax dollars?