speedport
Posts: 269
Joined: Thu Sep 27, 2001 12:08 pm

UAL Likely To Cancel Pension Plans

Sat Jul 24, 2004 7:19 am

United announced it will not make any more pension contributions for the remainder of this year. With 72M already deferred and contributions due in September and October, the total deferred amount this year alone will be 567M.

The president of the AFA had this to say: "While United's action falls short of an outright termination of the pension plans, the company's actions make termination of the pension plans likely."

The president of IAM district 141 had this to say: "This airline cannot exist for long without the support of its employees, and right now we don't see much that is worthy of our support. We are primed for a brutal fight."

I believe United will pass a point of no return with half a billion in pensions obligations. Sky rocketing fuel costs have sealed this fate.

The light at the end of the tunnel is really an on coming train. Pension derailment is only a matter of time.

http://biz.yahoo.com/rb/040723/airlines_united_4.html

[Edited 2004-07-24 00:27:27]
 
Sean-SAN-
Posts: 704
Joined: Tue Aug 13, 2002 4:02 pm

RE: UAL Likely To Cancel Pension Plans

Sat Jul 24, 2004 7:26 am

Eventually most airlines will only offer 401K retirement, with the exception of pilots and senior managemnt...
 
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PA110
Posts: 1897
Joined: Sat Dec 06, 2003 1:30 am

RE: UAL Likely To Cancel Pension Plans

Sat Jul 24, 2004 7:26 am

I think United is not alone in this dilemma. Many large corporations realized quite some time ago that pension obligations were not sustainable, and have discontinued them in favor of employee contribution 401(k) plans. The legacy airlines are among the few who have not addressed this issue until now. Old style pensions are going to become a relic of the past. The only question is how to make the transition with the least amount of pain for company and employee/retiree alike.
It's been swell, but the swelling has gone down.
 
speedport
Posts: 269
Joined: Thu Sep 27, 2001 12:08 pm

RE: UAL Likely To Cancel Pension Plans

Sat Jul 24, 2004 7:47 am

SEAN - United said it would not make anymore contributions to any employee pension plans for the remainder of bankruptcy.

This is a loaded statement as it is widely expected that United will extend ch 11 into 2005.

It is believed United will attempt to renegotiate pensions plans with its unions, including pilots, with outright plan termination used as leverage; much like how the threat of contract cancellations motivated employees to agree to concessions. A negotiated pension plan is better than a PBGC plan, that kind of thing.

Delta and American will have to match this move to stay competitive. Needless to say, tough times are ahead.
 
Kohflot
Posts: 941
Joined: Wed Sep 29, 1999 5:31 am

RE: UAL Likely To Cancel Pension Plans

Sat Jul 24, 2004 8:02 am

PA110:

With all due respect, I'd like to change around what you said that more accurately reflects the real situation....

I don't think United is not alone in this dilemma. Senior (read: wealthy) management at many large corporations realized quite some time ago that pension obligations were not good for the bottom line, and have discontinued them in favor of employee contribution 401(k) plans , most with miniscule matching. The legacy airlines are among the few who have not addressed this issue until now. Old style pensions are going to become a relic of the past , while there seems to be no end in "golden parachutes", which are essentially one-time pension payments. The only question is how to make the transition with the least amount of complaining by the rank and file.

I'm sorry, but if the people making these decisions really want to look credible, they need to share in the pain.

My opinions, and mine alone..

[Edited 2004-07-24 01:04:06]
Ask why..
 
miamiair
Posts: 4249
Joined: Thu Jul 15, 2004 9:42 pm

RE: UAL Likely To Cancel Pension Plans

Sat Jul 24, 2004 8:49 am

I totally second Kohflot. What is the reward for working all your life for a "legacy"carrier? The door knob hitting you square in the ass when you are old. Management needs a reality check when it comes down to compensation. It has to start from the top and work itself down to the baggage handlers and the people that sweep the shop floors. I think its called leading by example.

Its kind of hard when the CEO is making 5M plus whatever other incentives he's getting, then have the audacity to ask for a loan from the federal government to bail your dumb asses out.

I saw a lot of it; most of my family worked at Eastern Airlines.
Molon Labe - Proud member of SMASH
 
johnboy
Posts: 2561
Joined: Wed Aug 18, 1999 9:09 pm

RE: UAL Likely To Cancel Pension Plans

Sat Jul 24, 2004 9:39 am

Just curious, but why, theoretically, should pilots get a pension plan when, theoretically, no one else will?
 
Kohflot
Posts: 941
Joined: Wed Sep 29, 1999 5:31 am

RE: UAL Likely To Cancel Pension Plans

Sat Jul 24, 2004 9:42 am

Someone correct me if I'm wrong, but IMO, it's because of a strong bargaining position. No airline wants a strike.....
Ask why..
 
SPREE34
Posts: 1574
Joined: Tue Jun 29, 2004 6:09 am

RE: UAL Likely To Cancel Pension Plans

Sat Jul 24, 2004 9:47 am

Kohflot nailed it!! Also, years ago when the pension payments were being deferred, warning bells should have sounded everywhere as it was an indication someone couldn't pay the bills. Change to 401Ks, but for the new hires, not those who payed their dues and worked for years under the original agreement.
I don't understand everything I don't know about this.
 
Kohflot
Posts: 941
Joined: Wed Sep 29, 1999 5:31 am

RE: UAL Likely To Cancel Pension Plans

Sat Jul 24, 2004 10:00 am

Actually, United was only mentioned in the first couple of posts. This problem is beyond United, beyond the airline industry, and goes to the root of what we all work for in the corporate world.

My opinions, and mine alone..
Ask why..
 
AA717driver
Posts: 1502
Joined: Tue Feb 12, 2002 8:27 am

RE: UAL Likely To Cancel Pension Plans

Sat Jul 24, 2004 10:15 am

This is just a manifestation of the "sea change" that occurred in the late '60's and early '70's in U.S. business.

Prior to that time, employees(from janitors to CEO's) were hired in at the bottom of the company, nurtured and gained loyalty and an appreciation of the company and its history.

Since the proliferation of Wharton, Harvard and other large schools spewing geniuses with MBA's, the top floors of all major corporations have installed revolving doors and placed the doormats squarely on top of the employees.

They've sold most of America and all of the media on the idea that business can't possibly be run properly without someone of their genius and superior breeding at the helm. Anyone who disputes this is a disgruntled union employee who just doesn't(read isn't intelligent enough) to see the big picture.

Anyway, I hope the lenders at UAL(particularly the ones who just wrote the check for $1B) know this will cause the employees to pi$$ away their investment that much quicker. Good.TC
FL450, M.85
 
speedport
Posts: 269
Joined: Thu Sep 27, 2001 12:08 pm

RE: UAL Likely To Cancel Pension Plans

Sat Jul 24, 2004 2:40 pm

Another United is Doomed thread

I didn't post that United is doomed, I posted that employee's pension plans are doomed. This is something which all legacy carriers will have to match to remain competitive, just as the legacies had to seek wage and work rule concessions. This will affect a whole lot of airline people, and, if the PBGC has to pick up the tab, the taxpayers.

As airline geeks cant we be more creative?????

You can be a geek if you want, just don't force everyone else into your narrow world of geekdom.

I've also seen the speculation which has the pilot's pension spared because the airline will fear alienating pilots, however I disagree with this analysis. The pilots will take their hit much like the US pilots did. Why? Because a customer service rep can switch allegiance to another company faster than a pilot.
 
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GreenArc
Posts: 85
Joined: Thu May 11, 2000 10:59 am

RE: UAL Likely To Cancel Pension Plans

Sun Jul 25, 2004 8:16 am

Food for thought:

If the ATSB had guaranteed the loans to UA, the hit would have been anywhere from $0 (likely) to $1.1 billion (worst case, very unlikely). Now the PBGC is looking at inheriting a possible $7.5 billion pension shortfall. The government is going to have to bail out the PBGC with real taxpayer money.

Where's the outrage now? Didn't any of the "free market" airliners.net experts see this coming? The hue and cry was "no taxpayer money for UA!!". Now UA is going to cost the taxpayers dearly and everyone's favorite airline, whether it be CO, AA, or DL will be left worse off for it; no Tokyo hub for DL or Heathrow access for CO, just more bloodletting.

Ain't free markets grand!

GreenArc
 
AA717driver
Posts: 1502
Joined: Tue Feb 12, 2002 8:27 am

RE: UAL Likely To Cancel Pension Plans

Sun Jul 25, 2004 12:52 pm

Greenarc--I am outraged. I think the PBGC should be first in line at the bankruptcy court to get assets to secure the pension plans. But, WDIK, I just drive airplanes. If I were REALLY smart, I would have gone to Wharton and been part of Stephen (Don't call me Steve) Wolf's rape gang and made millions during my time at UAL...  Insane TC
FL450, M.85
 
wgw2707
Posts: 1110
Joined: Wed Aug 13, 2003 10:37 am

RE: UAL Likely To Cancel Pension Plans

Sun Jul 25, 2004 3:14 pm

Of course AA717Driver, with all due respect being a pilot does not neccessarily make you competent to run an airline-look at Frank Borman, he was an astronaut, operating the most complex aerospace technology in the world, yet he was totally unable to manage Eastern Air Lines.

As far as I'm concerned, the qualifications you have don't count in the airline industry: some of the biggest screwups have been made by both MBAs and pilots. What matters is your actual ability to manage an airline.

Alas, no one at United seems to have posessed said ability since the retirement of Pat Patterson in the 1960s. Since Patterson retired United has had a stream of mediocre managers and major failures:

*Dick Ferris and the failure of Allegis.
*Stephen Wolf and the near-financial collapse of United.
*Jimmy Goodwin and the huge cost structure increases incurred after United caved following "The Summer From H***".

United has been rather lucky to survive this far. What United needs is a highly competent CEO that matches Patterson in ability and who can restructure and restore United.

United will probably have to downsize and let Northwest or Delta claim the no. 2 spot in the country, but I think with competent management they can survive and gradually rebuild.

I'm hoping that Tilton knows what he's doing, but there just is not enough information out there...

-WGW2707
 
L-188
Posts: 29881
Joined: Wed Jul 07, 1999 11:27 am

RE: UAL Likely To Cancel Pension Plans

Sun Jul 25, 2004 3:28 pm

Eventually most airlines will only offer 401K retirement

BING BING BING BING!!!!

Anybody who thinks that any plan they don't control will be there when they retire is a fool. I don't care if it is a company or Union pension, or Social Security. And it has been that way for 15 years now.

Better get a 401k and/or IRA and control your own destiny.


Don't leave your fate up to others.
OBAMA-WORST PRESIDENT EVER....Even SKOORB would be better.
 
uadc8contrail
Posts: 1636
Joined: Thu Sep 11, 2003 1:23 am

RE: UAL Likely To Cancel Pension Plans

Sun Jul 25, 2004 3:47 pm

us taxpayers bet get ready for a onslaught of airlines turning over their pensions to the pgc................bohica
bus driver.......move that bus:)

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