Another goddam $10B bailout - American Airlines wants to hand its pensions over to the PBGC

on december 1, i predicted this...

American Airlines will use its bankruptcy as a $10B bailout by kicking its pensions to taxpayers

based on this...

Taxpayers May Have To Pay AMR Pension Bill

based on the precedent set by united airlines in 2005 when i posted this...

United defaults on pension plans; CEO buys $4.5M condo

so now we have this...

AMR To Seek End To Worker Pensions - PBGC

The US Pension Benefit Guaranty Corporation, which has responsibility for insuring certain benefits under private defined benefit pension plans, said on Tuesday it believes American Airlines will seek to terminate employee pensions in bankruptcy.

The agency said it filed a USD$92 million lien against American parent AMR for the balance of unpaid pension plan contributions. It added that the lien was applied to AMR assets outside the United States, mainly in Latin America.

[...]

The US Pension Benefit Guaranty Corporation, which has responsibility for insuring certain benefits under private defined benefit pension plans, said on Tuesday it believes American Airlines will seek to terminate employee pensions in bankruptcy.

The agency said it filed a USD$92 million lien against American parent AMR for the balance of unpaid pension plan contributions. It added that the lien was applied to AMR assets outside the United States, mainly in Latin America.

make no mistake... what american airlines is asking for is a $10B bailout... bankruptcy is a very convenient way for companies to void their labor contracts, neuter their unions and hand off their pension liabilities to the government taxpayers hapless citizens us suckers to pick up the tab... privatizing profits, socializing losses... it's the american way...

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American Airlines bankruptcy - the desire “to get out of bankruptcy what you couldn’t get at the table”

no surprise here... bankruptcy hashttp://www.blogger.com/img/blank.gif become the strategic tool of choice for negating labor contracts, jettisoning employees and kicking pension plans over to the pbgc...

here's some perspective on american airlines recent bankruptcy filing...

American Airlines’ parent company filed for bankruptcy protection on Tuesday, throwing into question the fate of thousands of union members’ jobs, their contracts and an eight year-old partnership agreement under which they’ve made hefty sacrifices. “I was shocked that it happened when it happened…” says Transport Workers Union President James Little. “I thought we could have avoided it.”

Little, whose union represents 26,650 mechanics, technicians, and fleet service workers at American Airline and sibling airline American Eagle, believes “a major motivation” for management was the desire “to get out of bankruptcy what you couldn’t get at the table.”

Prior to Tuesday’s announcement, TWU had just reached tentative agreements with American for new contracts in some of its bargaining units that were awaiting ratification by members. Other union members at American were still working without a contract extension agreement four or more years since expiration. Although TWU has been preparing for the possibility of bankruptcy for two years, Little says management never indicated during negotiations that it could be imminent. “We didn’t get any advance notice, except perhaps five minutes before the media knew about it.”

Little suggested that the board of parent company AMR may have made the bankruptcy decision against the recommendation of CEO Gerald Arpey, whose retirement AMR also announced on Tuesday.

In a statement, Arpey’s replacement Thomas Horton said that despite a series of achievements, “as we have made clear with increasing urgency in recent weeks, we must address our cost structure, including labor costs, to enable us to capitalize on these foundational strengths and secure our future.” (An American Airlines spokesperson declined a request for comment.)

sigh...

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American Airlines will use its bankruptcy as a $10B bailout by kicking its pensions to taxpayers

it looks like amr (parent company of american airlines) is going to use the leverage of bankruptcy to kick its pensions over to the pbgc taxpayers just like united airlines did in 2005...

Taxpayers May Have To Pay AMR Pension Bill

US firms or taxpayers could end up paying for the bankruptcy of American Airlines if the carrier abandons its pension plans as part of a restructuring drive, US pension insurers told the online edition of the Financial Times.

Taking on the airline's pension plans would widen the Pension Benefit Guaranty Corporation's (PBGC) financial deficit and could require the insurer to charge higher premiums, director Joshua Gotbaum, head of the federal agency that insures private pensions, told the newspaper.

Tom Horton, the new chief executive of American Airlines and its parent company AMR said the fact the company had filed for Chapter 11 bankruptcy protection did not mean its pension plans would definitely move to the PBGC, but he indicated it was a real possibility, according to the article.

"The pensions in particular are very expensive, it is a very big part of our cost disadvantage relative to the rest of the industry. And so, given our plans to reduce costs to a more sustainable level, we are going to have to look at those costs," he is quoted as saying.

The PBGC said on Tuesday that American's four traditional pension plans covering 130,000 workers and retirees collectively report USD$8.3 billion in assets to cover roughly USD$18.5 billion in promised benefits.

so far, i haven't seen any stories putting this in the context of a "bailout" although that's certainly what it would be...

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