House of Paine

uncle bail out

UNITED WANTS TO OFF LOAD
ITS PENSIONEERS ON UNCLE SAP


  last year i ranted some on this :

                                   read and heed riot  rangers


==================================


   < maybe i'll feather in >
     < a few comments  >

------------------------------------------

 MARY WILLIAMS WALSH and MICHELINE MAYNARD

Published: July 24, 2004




   United Airlines said yesterday
 that it would not contribute 
to its employee pension plans 
while it remains under 
bankruptcy protection

 That move could save it 
more than a billion dollars 
in cash over the coming year
 but pension experts said
 it signaled the likelihood 
that United would terminate 
some or all of the plans.

 
 
A full-blown default 
by United
 on all four of its pension plans 
would send tens of thousands
 of current and future retirees
 and billions of dollars
 in unfunded obligations
 to the government's 
pension insurance program

< bend over Uncle darlin'  here we come >
 
 dealing the program its biggest blow
 since the government
 began insuring pensions in 1974

    < uncle manatee >
< has got to have seen this coming >
< christ sakes i did>    
 
Such a huge default
 could also set off a chain reaction
 prompting other airlines 
to reduce their own costly pension plans 
to stay competitive

< chain re-action...stay competitive...
    yes indeed if one OF THOSE FUCK BALLS
MANGES
to  off load
 the rest wil follow
one way or other
not that they all need
to go thru the chap 11 robo washer >

 That, in turn, would worsen 
the pension agency's finances

<  scare shity non-sense >
< here again Uncles  un bustable good credit >
  < means its agencies have no financial constraints >
<  but this is easily  forgotten>

< "meet any challenge carry any burden ">
< rhetoric>
< thats ok if its a big oil patch the tower boyz're rustlin >
 < but >
 



But the rare and drastic measure
 would also make United
 much more attractive 
to the lenders 
it needs
 for the financing
 to help it emerge from bankruptcy

< bingo >



 United filed for bankruptcy in December 2002
 hit hard by the decline in travel
 that began
 even before the terror attacks 
of September 2001
 when it lost two planes

< boo hoo hooey >

 and the struggle to compete
 with low-cost rivals
 
 < low cost as in non union
                                  bingo II >

Terminating a pension plan 
is a drastic measure 
that requires approval 
of the bankruptcy court


< right and  don't you think >
    < thats only decent >
          <  dear one >
           < shed an obligato like that >
< fuck otta lead to more then  chap 11 >
 < otta lead to the  culpable tower tots >
< gettin a   prison stretch >
  < not a credit stretch>


 In a so-called distress termination
 the government takes over
 the failed pension plan's
 assets and liabilities
 and uses the money
 to pay benefits to the retirees
 within certain limits



< "certain limits " >
<  watch out below....>



 When there are not enough assets 
in the plan to cover the obligations

< thats an "every fuckin timer" pallys>

 the government's insurance program
 the Pension Benefit Guaranty Corporation
 makes up the difference

 < that is till  the day soon ahead >

      < and  uncle Sap grabs a taxpayer backed loan>

 Retirees whose benefits exceed 
 limits  lose some of them

  < now  recall folks
  < when uncle bailed out the s&l's account holders>
 < he waved the insurable cap<
< and paid out in full>



The federal agency cannot reject 
such a termination
 although it can go to court 
to try to get more resources
 from the defaulting company


<  uncle "can" go for more money >
  < but watch  how fast that won't happen >


 The company's workers 
can also try to block such a termination
 either in court or by striking
                          < sure >
 

But success could also be failure
   < beautiful phrase>

 because they could drive
 the company into liquidation
 leaving themselves 
with neither a pension plan nor jobs. 

< the union dilemma >
< which way >
< a piss pot pissed on >

< a  piss pot  pissed off>


Jean Medina, a spokeswoman for United
 declined to comment yesterday
 on whether the airline intended 
to abandon its pension plans altogether
 "We have a lot of analysis to complete"
 before making any decisions 
on the plans' future, she said.


< translation  >
 < course we 're dumping  >
   < but for now  we're stalling >

At the Pension Benefit Guaranty Corporation
 a spokesman
 said that a default 
on this scale
would be unprecedented.

"If United's plans terminate,
 it would be the largest loss
 in the P.B.G.C.'s history"
 he said

 < with more to come gang>

 The largest pension failure so far
 that of Bethlehem Steel in 2002
 left the government with $3.6 billion
 in unfunded pensions
<  and what a tale that is>
< the rank and file  took 
one of the most sadistic  porkings on record >


< that pulled off  the down size shuffle >
< a " miracle worker">
  < but not a "wage worker" obviously>
  , as the donkeys found out >
< when he flipped the scraps into an IPO >
< THAT NETTED HIM  "FAST GILLIONS" >

 But United's four employee pension funds 
would have a total deficit of $7.5 billion
 Most of that loss 
would be borne by the agency
but some would be borne by
 employees
 
 particularly United's pilots
 who have been promised
 unusually rich pensions

< THE POOR POMPOUS SUCKERS>

 that exceed the limits 
of the program's insurance coverage
  
< no comment as pointed out >
< see S& L settlements >

The agency finances its operations
 by charging premiums
 to the companies that offer pensions.

   <  oooops miscalculated some where here >
  
< but thats unfair >
< upping the rate now > 
      <   misses the bandits of yester year >
  <  so  best course "let the implosion continue">

 where retirees' benefits exceed 
the maximum coverage
 the losses can be severe

 , yes indeed>

 The weaker the pension fund
 the worse those losses can be

   < hear yee hear yee >



The guaranty agency's financial health
 peaked in 2000
 when it posted a $9.7 billion surplus
 in its single-employer division
  which insures corporate pension plans

   
   < but ass hole >
<  the bomb wasn't set to go off any sooner>

The agency then took 
a pounding when the stock market fell
 because most companies
 have invested
 more than half of their pension funds
 in stocks
   < what ?  >
    < then fuckin up the fund pay in pool rate>>

Its worst losses were concentrated
 in failing steel company pension plans

  < vide that  story's happy ending>


 As of last year
 the agency was running a deficit of $11.2 billion

< make that  a 20 bill swing in three years>

 In March
 it disclosed that it had classified $23.4 billion
 of airline pension obligations
 as "reasonably possible" 
to default 


  < reasonably possible >
  < here it comes taxhead>

 
----------------------------------------------------

< the dons bark> 

"We will not simply allow 
United to proceed without a fight" 
 a union leader said

  <  thats it  huff and puff
  < you >
< fat feeble bastard>


   
Industry analysts said lenders
 would be unwilling to invest in United
 which owes its pension plans
 an estimated $4.1 billion 
over the next five years

 United acknowledged that yesterday.

< case closed>


--------------------------------------------------------

< from united's press statement >


 "In the absence of a federal loan guarantee
 United's long-term business plan
 must have cash flow and liquidity
 levels that the capital markets
 are willing to finance,"

"Because existing pension plan contributions
 will remain a huge financial burden 
after exit, it is incumbent on United
 to study all possible options
 and to determine whether
 United can sustain this burden 
and still attract exit financing."

  < quote of the day >

Robert W. Mann,
 an industry consultant 
 said 

 "New lenders and new equity
 don't like to pay old bills"

  < wrap up>

For United,
 the world's second-largest
 commercial airline
to default on its pension funds
 would be a historic blow 
to the labor movement
 
  < aaah a little hysterical  perspective>

 Pensions have long been
 one of the three basic things
 that unions have sought to provide
 for their members
  along with 
health care coverage
 and 
good wages


  < looks more and more like  zero for three >














"This goes against what unions were set up to provide," Professor Gregory said. The situation is even more notable at United, which was an employee-owned company before it sought bankruptcy protection. Union leaders, in fact, had the power to hire and fire the chief executive. Now, 19 months later, they face seeing management dissolve their retirement plans.

"This is a blow to the concept of employee ownership," Professor Gregory said.