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United Airlines

Cougar

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First, let me start by saying I am by no means an expert in the area of corporate finance so take my comments with a grain of salt. I have been following various stories as of late and one story seems to resinate louder than any other. United Airlines is looking to dump their pension obligation to their employees thus seriously impacting the retirement of current employees as well as past retired workers. This obligation will then transfer over to a governmental agency who will take responsibility for United pension obligation. However, this agency is already supporting 2,000+ companies who have dumped their retirement plans and is already struggling trying to pay out whats already owed.
Why does this happen? Well, the lamen would say (in the case of United) that it was unfortunate economic circumstances that caused the struggles of the entire airline industry. They would then point to 9/11 and the rising cost of oil. Though, neither can be disputed as both have profoundly hurt the entire industry, yet I point to a bigger cause to the current problem many companies like United face.
In plain english... its just bad business. How can multi-national corporations not plan far enough in advance to account for the rising costs in retirement funds?
These plans are the cost of doing business just as gas is to fly the plane or electricity is to run a building. I say, if United can not fulfill its pension obligation to its employees we should let the company flounder. Our economy is built on the idea of survival of the fittest (the phrase was actually coined by an economist and not Charles Darwin). Fine... let United drop their pension plans but in return the government should drop all its support and allow United to go belly up. It should then merge to another more successful airline who could better manage a large corporation.
Bush recently passed laws making it more difficult for individuals to file for personal bankrupcy..thus not rewarding bad economic decisions (and fraud). Why not extend the same to the corporate world...
 

1SGRet

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Pretty good thread, Panther. All right, OK - Cougar. What's the difference, btw? Serious.

Yes, United took advantage of the new bankruptcy laws and a friendly BR judge. Strangely, the wife and I were flying to London (and back), in April to early May. Surprised the plane didn't stop in mid air. Service was not actually surly, but let's say 'desultory'.

This decision affects not only pilots, but attendants, mechanics and baggage handlers. The old pension is roughly halved.

What do you want to bet that the top execs and board members skate with 100 million dollar 'settlements'?

Seen people who lost their entire pensions, but who still worship the current corporation loving administration, and many Congresspersons. At least UAL didn't 'go South' like some others. I reckon they can't. I just hate it when I pick up the phone, "Can I be helping to Sahib? You are having trouble with your computer machine? Punchit your effteen.". What!
 
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