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Thread: United = biggest corporate-pension default ever

  1. #1
    A federal bankruptcy judge approved United AirlinesÂ’ plan to terminate its employeesÂ’ pension plans on Tuesday, clearing the way for the largest corporate-pension default in American history.
    Just a sign of what is to come.
    I understand the reason they can get out of their pension obligation is because they are bankrupt. Basically what the court is acknowledging is that the pension is making them uncompetitive. If the company can't become competitive, it will end up being dissolved and the pension would not get paid then either.
    For the people in the pension plan it means that they will receive less of their pension, but still some money from the Pension Benefit Guaranty Corporation ( I don't exactly know what the funding mechanism is, but I am sure the taxpayers pay for it. Although this will be the largest pension default so far, the really scary pension default that may be on the horizon is GM. They have 3 times as many retirees as they have employees.
    Lately I am beginning to wonder if GM is not running itself into the bankruptcy to get out of the pension problems it is facing.
    How do you suppose we'll all end up paying for it? i see 3 possible ways...
    1. They don't insure the pensions & the retirees get nothing.
    2. raise taxes to insure (pay) those pensions.
    3. print up the money thus further devaluing the dollar?
    or a combination of the 3???

  2. #2
    move to China

  3. #3
    Welcome to the end result of labor unions. Just ask a Pan-Am employee for details. Oh, yea, Pan-Am was closed by it's union. Btw, I happen to be a union member, IAMAW, for 1 purpose. To have voting (and bitching) rights at contract time and afterwards.

  4. #4
    Super D
    Pensions are dinosaurs on their last legs, a tail waiting to sting its own self. Self-directed (401k, etc) is the way to go, including self-directed Social Security, IMHO. Let me determine my own fate...

  5. #5
    Yup, the Unions are finally getting theirs. They've all but strangled the airline industry and now GM and Ford are starting to wheeze under the load of the bloated union compensation packages they've had jammed up their asses. That's what you get for paying some loser $40/hr to operate an air wrench or push a button on an assembly line and then have to offer him healthcare and a job til he dies. Looks like the UAW is going to "protect" their members right out of a job! DUMBASSES!

  6. #6
    A few years ago, 40% of companies had pension plans and today it is 20%. Pension plans were a part of when companies never changed and people expected life time security. With the globalization of companies and the constant changes, unions and pensions are bad for business. Too many unions are bloated and/or crooked. Businesses are expected to adapt, but the unions refuse to.
    Our government is in for a financial shock of an order of the Savings and Loan debacle that hurt so many people. It is nothing compared to what can happen if Social Security reform is not initiated. We are due for a weatehr change in how we view our jobs. We are going to have to work longer and with benefits that will travel with us from company to company. If nothing is done, our health care will collapse under the weight of more and more people relying on indigent care because their companies cannot afford policies. I hope our politicians get their act together and tell the lawyers and outrageous political groups to take a hike. Even if they don't, I have confidence that we will survive the future, just not as luxurious as many of us expect. I also think that the west coast is going to take the biggest fall due to how out of sync it is with the rest of the nation. The Grapes of Wrath in reverse.

  7. #7
    Agreed, a change in lifestyle is coming.
    If only the clock could be turned back 12-15 years when Mr. Perot warned of the consequences of NAFTA and the loss of US manufacturing jobs with the multiple deleterious ripple effects. US manufacturing wages that would now be in US savings accounts have been exported indirectly to foreign governments who have exchanged their domestic currencies for the US currency earned by their low wage manufacturers.
    With the export of manufacturing jobs, the US has been forced into the low interest rate environment end game of financial and home speculation. The game goes on only as long as the borrowing continues.
    I reckon it's only a matter of time till some portion of the people (the sleeple?) wake up to the idea that if they are investing in 401-K plans with a planned withdrawal date anything much past the end of this week, they are taking on a huge - and undisclosed - systemic risk. Why? Because if the best pension brains in the world can't keep a fund solvent, why should the part time investor relying on a commission-based system expect to beat the rest of the pack? Yeah, I know, the mantra is "Buy and hold"." But the odds seem to lengthen daily that you'll have to hold till you've been dead another lifetime before the markets will come back after what i see on the horizon.

  8. #8
    Super D
    of course there is always risk in investing, hence diversifying your funds. Don't put all your eggs in one basket, and my funds will ALWAYS outperform social security.

  9. #9
    There are a lot of areas that need attention. Investment funds are one that will have to be refined as we go along. You always have to remember that anytime a person finds a way to earn money, somebody will try and find a way to steal it.

  10. #10
    Ok riddle me this. A reread through all of the Fed comments from Thursday and I want to know "What is non-financial debt?" My point being that debt is always financial, so how can you have non-financial debt?
    We need a Dictionary for a New Economics that explains them, it will go something like this:
    non-financial debt is financial debt
    Consumer Credit is consumer debt
    and there is an Easter Bunny
    Dow and other indices have long ago grown tired of being tied to anything that even remotely could be called reality.
    What Greenspan says and the plunge protection team does to keep the market afloat is truly mind warping.
    I read where one guy said the market is set to go to 35,000. I'm starting to believe him. All we have to do is get over the 10700 mark we started at the beginning on this year.

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