Two local blogs (see here and here) note the ruling that allows United Airlines to default on four pension programs. The New York Times sums it up thusly:
The ruling releases United, a unit of the UAL Corporation, from $3.2 billion in pension obligations over the next five years. The federal agency that guarantees pensions, the Pension Benefit Guaranty Corporation, will assume responsibility for the plans, which cover about 134,000 people.
It's easy to engage in class warfare here and paint this as another "greedy company screws the working man" story, but I suspect things are far more complex. First, everyone knows that the airline industry has been devastated over the last decade or so. Just try reserving a seat on Eastern, TWA or Pan Am airlines. United Airlines is itself in bankruptcy, and Delta is close. So obviously there is something systematically wrong in the airline industry. Also, the airlines are suffering in the way the American automobile industry is. I read recently (and now can't find it) that GM pays as much to its pensioners as it does to current employees (see this story here for frightening prospects for GMs pension fund). What has happened to these large old companies is what has happened to the governments of Western Europe. They made over generous benefit proposals to their workers and now that they can't afford them, the employees, quite reasonably, don't want to give them up. I would ask those bashing "big business" here, what else do you propose? Where is United to get this money to pay pensions at current full benefits? Considering the billions of dollars at question, just cutting salaries of fat cat CEOs won't get you there (and yes, I do think CEO compensation packages are too often too large). Would you prefer doing nothing, and having United go under? Where is the working man now that his company no longer exists? You can say that reducing the pension benefits of the worker injures that worker, but would you prefer his company go out of business and the worker lose his job? That is the likely result if this ruling did not occur. The Enron debacle taught us many things. One of them is that when a major corporation goes under, it's the little guy who pays the price, not the executives. By the way, the judge in this case opposed the Bankruptcy bill that the liberals were also opposed to. So much for being a shill for big business.
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