Romney's Bain & Co., a job "cremator," now advising American Airlines on how to kill their unions, their pensions and their workforce

ain't this sweet...

As Mitt Romney campaigns in today’s Florida presidential primary, airline workers have been following him with a message about one of his old company’s newest clients: Airline giant AMR, the parent company of American Airlines and American Eagle. AMR, which filed for bankruptcy in November, last week announced plans to retain the advice of Bain & Co., the consulting firm where Romney worked before co-founding private equity firm Bain Capital in 1985.

“He’s talking about creating jobs,” says Transport Workers Union President James Little, but “he’s not a job creator. He’s a job cremator.” TWU represents 24,000 members at American Airlines and American Eagle whose jobs and benefits are threatened in the bankruptcy process.

AMR’s retention of Bain (for consulting on its American Eagle subsidiary) came out the same week as news that AMR had contributed less than $7 millionhttp://www.blogger.com/img/blank.gif to its pension fund, out of a normally required $100 million, for the month of January. Days later, AMR increased its contribution. “I have a hard time sitting back,” says Little, “when the company is taking hard-earned money…to pay $525,00 a month to have this company come in and tell them how to cut heads.”

[...]

Reporter Terry Maxon predicted Sunday in the Dallas Morning News that AMR’s proposal tomorrow will include replacing all pensions with a 401(k), outsourcing thousands of jobs, and requiring employees to pay more of the cost of their health insurance. Maxon says those predictions were based on “conversations, management proposals in contract talks and what other airlines adopted” in their own bankruptcies.

this has all the makings of a deadly cocktail for romney, bain and american... unfortunately, american employees and retirees will still be the ones who get screwed...

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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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Welcome to the next pogrom - public employees

you can always tell when our super-rich elites have issued the latest instructions for talking points to their political and media puppets... it seems the catfood commission didn't do its job of trashing what's left of a social contract that's already shot full of holes... with unions in the private sector barely holding on in icu, next up are public employee unions... setting the stage is the quintessential stage-setter, george will, who never fails to shill for the super-rich elite agenda...

George Will joined a chorus of conservatives Sunday blaming unions for New York City's lackluster performance in the wake of a recent snow storm.

"In New York City, the issue is tangled up with the question -- and it's an open question -- whether the public employees union, to make a job action point, sabotaged street collection," Will told ABC's Jake Tapper.

"I believe -- and this is entirely tangled up with the state bankruptcy -- that the issue of public employees in their dominance of blue states, is going to be the biggest issue in this country for the next several years," he added.

but why don't we take a look behind the scenes...

from truthout...

The stage is set and the main actors in Congress and in the corporate establishment are ready to perform after rehearsing behind closed doors for the coming assault on organized labor's most powerful sector: public workers.

The final preparations were smoothed out in Obama's tax "compromise" with the Republicans, which gave details of the drama's first act. The tax plan purposely did not include a critical element for state funding, called the Build America Bonds program (BAB), which allows recession-sunk states to easily borrow money from the federal government. In the face of enormous deficits, the states would be left to drown. Reuters blogger James Pethokoukis explains:

Congressional Republicans [and Democrats] appear to be quietly but methodically executing a plan that would a) avoid a federal bailout of spendthrift states and b) cripple public employee unions by pushing cash-strapped states such as California and Illinois to declare bankruptcy. This may be the biggest political battle in Washington, my Capitol Hill sources tell me, of 2011.

Public employee unions would be crippled by bankruptcy because union contracts are notoriously easy to shred in the court system, where "nonpartisan" judges always decide against unions.

To further ensure that states will become bankrupt, yet another law was recently proposed that, if approved, will keep money out of states' pockets by making it harder for states to sell public bonds. This law demands that states use overly strict accounting methods when reporting their debts to public workers' retirement accounts, so that the state's "credit worthiness" will shrivel. (Reagan used the same trick to destroy the pensions offered for private-sector workers.)

Two birds are killed with one stone: public employees will find their pensions under further attack, while states will be refused credit because of the new accounting methods. The New York Times explains:

The bill gives local governments a choice: they can report [pension obligations] the way the [Congressional] members want them to report, or they can give up the ability to issue tax-exempt bonds. That is, of course, no choice at all.

and:

In the end, I suspect ways will be found to abrogate some pension promises. But even if that does not happen, the trend away from defined-benefit pensions is likely to affect most younger public employees, as it already has their counterparts in the private sector. The retirement safety net will thus become a little more frayed.

In summary, pensions for state workers are on the cutting board, to be replaced by the 401(k) scam, while state bankruptcy will "abrogate" [abolish] union contracts. But as it stands now, states cannot legally declare bankruptcy. This minor obstacle is being handled quickly for showtime, as Pethokoukis explains:

Some Republicans hope the shock of the newly revealed [state] debt totals will grease the way towards explicitly permitting states to declare bankruptcy. Indeed, legislation amending federal bankruptcy law is currently being prepared by congressional Republicans.

The current Congress and President Obama are intentionally creating a nationwide anti-union atmosphere. The Democrats' silence over the above issues is, in fact, a signal of approval. In the same way that Obama announced a federal pay freeze for federal workers, federal actions towards labor quickly set the tone for how states deal with labor. Right-wing forces are consequently given the green light, and Democratic and Republican state representatives will do their best to implement their own anti-labor laws to ingratiate themselves to the feds in the hopes of promotion. The feds act as a music conductor and the states respond as an orchestra.

you can only imagine how much our greedy elites covet public employee pension plans... they drool over them in the same way they drool over social security and they're not going to quit until they've vacuumed up every last cent from the bottom of the pockets of the last working-class citizen left standing...

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