Judge Approves End of United Pension Plan

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What type of precedent does this set for the rest of corporate America? Have enough financial mismanagement and you can talk your way out of paying loyal employees pension benefits?

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I understand this very upsetting, but there seems to be a disconnect here. In order to pay any wages or pensions a company/industry/country/whatever has to be financially solvent. It has to inflow more money than it outflows. Period. It's like gravity, it's physics. There is no incentive for management to bankrupt these companies just for the sake of dodging pension obligations. It would be a much more ideal situation for them too if they were making billions per year instead of losing billions per year.

The current bankruptcy laws were designed to protect creditors but another group that benefits, and this is by design, is employees. Without these laws we would be talking about UAL in the past tense now.

Look UAL has been a running labor/management fight since I've been around the industry. With all the energy that's been devoted there to internal fights it's a miracle they've made it this far. And I think there will be strikes and they will fade away. But until the structure of this industry changes so that the survivors can make a profit on some level then it's useless to talk about any obligation to pay anything. You can't pay money you don't have.

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Granted, a small percentage of companies still offer pensions, however I think the ramifications of this could set a very large precedent for companies in financial trouble, not just in the airline industry

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You are right, absolutely. There is a coming storm. The auto industry is in a similar cycle to the airline industry. The contracts that brought these pension plans to auto came during a time when they dominated the industry and were laughing at foreign cars. In the same way the pension plans at airlines were devised in a non-competitive regulated industry. Now market realities are diverging with some huge obligations made decades ago. This is not going to be pleasant.
 
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WHY IS EXECUTIVE COMPENSATION IN AMERICA STILL SKYROCKETING???????

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Is it? I don't see any evidence this is true. Executive compensation started an upward binge during the 90s when everyone's stock was skyrocketing. It certainly is plummeting in the airline industry and according to everything I see is going down in other indutries where performance is poor. The scrutiny of executive compensation and BOD actions has been huge. Which is why you hear about the most egregious cases, and then assume it is happening everywhere.

Look at the heat Jack Welch took after his retirement from a company that had increased it's value by billions during his tenure. He had to return some of his retirement benefits and the next CEO has little chance of making what he did, no matter what GE stock does.

I'm not defending executive compensation. But when it is reduced on a large order, as everyone is demanding, noone seems to notice.
 
Anyone else notice a twelve year Southwest captain makes more than a twelve year United 747 captain? Now with United canceling their pensions I see no reason I would want to fly for them. Furthermore with their blatent disregard employees. I am boycotting flying on United. My mom worked for them years ago and I have always loved that airline, but with all the cuts the employees have taken without striking, all the hardship they have endured,I say screw United. Let them go down and their employees find more rewarding jobs. I say this now to United:

If you terminate your employees pensions terminate my frequent flier account.
 
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I'm not defending executive compensation. But when it is reduced on a large order, as everyone is demanding, noone seems to notice.

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I dunno, I thought I heard something 'go quack' and waddle like a duck. Even left a feather on the sidewalk!
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A sad reality. My parents had to sell their house and relocate from San Diego to Washington state because my dad lost his US Airways pension. On my flight up to visit them this weekend I met a United 747 FO who is 5 years from retirement and was afraid this would happen.

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I hear ya on this one. My parents had to seel their house about a year ago because of NWA being shaky. Hang in there!
 
See...here in lies the problem. The general public sees United cutting $645 million in pension costs and thinks, "those blankety blanks, they're stealing their employees money!".

Well what about all the rich a-holes out there that have like 30,000,000 frequent flier miles. Quit giving out free first class tickets and simply state that if the airlines don't raise ticket prices across the board by $10 or raise frequent flyer reward amounts, then they'll have to default all the frequent flier mile accounts and the program will cease to exist.

Lets get the public involved... this is getting downright ridiculous. Glad I get to contribute to my little 401K that could soon...since I won't have anything else to fall back on.
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Well what about all the rich a-holes out there that have like 30,000,000 frequent flier miles. Quit giving out free first class tickets and simply state that if the airlines don't raise ticket prices across the board by $10 or raise frequent flyer reward amounts, then they'll have to default all the frequent flier mile accounts and the program will cease to exist.

Lets get the public involved...

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Agree, a public march on DC by airline customers demanding higher fares and reduced frequent flier awards would certainly get some attention.

I'll bet a lot of hard working people that spend their lives on airlines because their work demands it and are the airline's best customers would really respond to be called "rich a-holes".

Let's call it the "million a-holes march"!
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You know, at this point I hope pilot's, FA's, and all the airport crew strike with one last draw...and United goes under. This is getting rediculous.
 
Well, according to flyover's opinion about cutting loose some of the dead weight in the industry, I would think you would want UAL to go under. Maybe bankruptcy help/protection from the federal government is killing the industry. Let the strong survive just like everywhere else in America.
 
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but with all the cuts the employees have taken without striking, all the hardship they have endured,I say screw United.

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This is gonna tick some people off, but I'm coming down on flyover's side on this one. A semi-functioning company in Chapter 11 still cutting paychecks every week is better than a dead company in Chapter 7 saying "See ya." Under the RLA, there are a LOT of hoops that need to be jumped through before a strike, otherwise the airline employees wind up standing in line to the PATCO controllers. Now, informational picketting is different. They can pretty much organize that anytime and are protected. I think a lot of people see picketting and automatically associate that with striking since both involve people walking in front of the airport carrying large signs. A strike would sure kill the airline as well as any income these guys have right now. I'm all for drawing a line in the sand and saying "enough is enough" at the negotiating table, but a full on strike wouldn't really solve anything. If the company wasn't fighting for survival, and the employees were negotiating for better working conditions, then I'd say a strike would be in order. However, we all know that the minute ONE of the union groups strikes, this is going into liquidation. Those planning on striking should probably go ahead and start applying at Home Depot since their jobs won't be there after the strike is over.
 
I guess I don't understand it all that well. I don't understand why they don't just let the defunct companies go where they may. They have been given protection and help for years now and they still can't bring things back to where they should be. I understand that many people would lose jobs, but some of them would be picked up by other airlines who would become more profitable without UAL there. It would also force workers to find other employment with better companies (airline or otherwise). If it were me I would rather do that than feel like I am trying to keep the Titanic afloat with a bike pump.
 
Here's the problem. Most of the people at United right now have been there for a LONG time. Their pay is in line with how long they've been with the company. Not sure how badly wage concessions have hurt that pay, but odds are it's still more than they would make starting at the bottom somewhere else. For example, a LOT of people in Orlando have this problem. 5 years at Disney you're making roughly $12/hr, give or take a few cents. That's top out, and you'll only see more when a contractual raise rolls around. Now, let's say you're not very happy with your job and you want to do something else. You'll take on average a $5/hr paycut for another entry level job in Orlando. That's a pretty big chunk of change. If you've been with an airline for a while (and I'm assuming ground staff since it's easier, not pilots or FAs), well say 12 years at United, odds are you making somewhere close to $17/hr. You could go work at Home Depot, but be prepared to take a $7/hr pay cut. If you've got kids and are already living paycheck to paycheck, that probably won't work too well. So, I think that's why a lot of people are trying to keep the sinking ship afloat. We'll probably see a lot of people jump ship now that the pension situation has been resolved. However, the pension isn't just GONE, it's reduced by a substantial amount, but not totally gone.
 
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Those planning on striking should probably go ahead and start applying at Home Depot since their jobs won't be there after the strike is over.

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Tony Stewart drives the Home Depot 20 car!
 
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Tony Stewart drives the Home Depot 20 car!

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Cool, he can fund the pension plan. Nice non-sequiter, though.
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I definitely see your point, but.....

What about hanging on too long for something that seems inevitable anyway? The longer you stay with a company the harder it is to start over again when you have to. My dad worked for a company for almost 30 years. He was a supervisor making decent money and one day they just came in and closed up shop. Gave management a 6 month severance and sent everyone home. The company had been having problems for years, with rumors and threats of closure. Instead of starting to look for something better years ago, now he is 50 and not very marketable as a new hire with his age and an injury from that previous job when he was younger.

I know it is tough to make a call like the one above, but especially when your company has been through the bankruptcy wringer a few times, at what point do you say enough is enough? I can definitely understand and appreciate the fact that everyone there that isn't management is willing to make huge sacrifices to keep their job, but as discussed here before.....do they want these people to work for free? At what point do they realise that cuts in pay on the front line aren't going to save your company and that the problem lies somewhere else? How long is the government going to allow this to go on? They don't come along and save most businesses like they have some of the carriers in the US, why should the airlines be any different? I think they are just making things worse. Other companies would start up and learn from the mistakes of these legacy carriers if they were just allowed to die. It is stunting new growth and opportunity in my personal opinion.
 
New info: 31 May the day....

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"Negotiators scheduled another face-to-face bargaining session for Monday night to try to resolve remaining differences over the terms of a new five-year contract. Absent an agreement, Bankruptcy Judge Eugene Wedoff has said he will rule Tuesday afternoon on whether United can break the union's contract unilaterally in order to impose lower wages and benefits. The IAM contends such an action would give it the right to strike, and union leaders served notice again Monday that the workers are poised to walk off their jobs if necessary."

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http://www.washingtonpost.com/wp-dy...5053000631.html
 
Real simple solution, do not let another person control your future. I mean companies have been going out of business for years and people getting nothing. Eastern, Pan Am, Braniff.... So why do people still think that in the end the court system, which will decided what is best for a company let a pension program continue. Do not participate in them, you rely on someone else, which in my opinion, this is what will happen. Plus these union bosses are to blame for alot of the problems as well, so lets not forget about them, they want the airline to go under, to prove what point, that all the employes are out of work and they still keep their jobs.
 
If United hits the big iceberg, the 'union bosses' lose their jobs as well.
 
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Plus these union bosses are to blame for alot of the problems as well, so lets not forget about them, they want the airline to go under, to prove what point, that all the employes are out of work and they still keep their jobs.

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How, exactly, do "union bosses" who have no direct control of the company get blamed for the mistakes and shortcomings of the very people who are in direct control of the company? If anyone the top dogs want the company to go under because somewhere in their contracts they get a bonus for it.
 
I am telling from experience, no one wins in a bankruptcy. The bosses do not get anything. The order goes from secured creditors to unsecured creditors to stockholders to employees and all employees are treated equal, thats if there is nothing left. I had 24 months of vacation, my 401k all taken in a bankruptcy. What I meant is all the focus is on the management, for this and that, we need to look at both sides, the unions helped very much in the down fall of United as much as management, mind you the biggest stockholder in United is its employees, so they vote on management. I have a problem with unions wanting more and more, with out regard to total effect in the future. The company is not there to create a nest egg for people. If you look at most pensioned companies they are all gone, the unions need to get with the times and realize the 1920's, when they were needed are gone and people will choose to work and accept the situtation or they need to find a new job. The union bosses do not lose there jobs they work for the union, the company is going out of business not union.
 
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