Thursday, September 15, 2005

Corporate Wealth Redistribution (Thievery)

Corporate Wealth Redistribution (Thievery)

“Delta executives declined to say how long the airline would remain under bankruptcy protection, but it could take years if the nearly three-year bankruptcy at United is any guide.
Problems are also looming with its pension plan. If Delta's pension plan defaults, it would set a record, surpassing even the size of United's pension plan collapse earlier this year, according to estimates issued yesterday by the Pension Benefit Guaranty Corporation. Already, the agency's finances have been severely shaken by a series of large corporate bankruptcies and pension failures. The guarantor estimated that Delta's pension plan had promised benefits worth $17.5 billion, but had assets of only $6.9 billion, for a $10.6 billion shortfall. The most recent estimate of United's shortfall, by contrast, was $10.1 billion.” MICHELINE MAYNARD Bankruptcy For 2 New York Times 09-15-05

The news two major airlines, Delta and Northwest Airlines, have filed for Chapter 11 bankruptcy protection seemed to shock many Wall Street investors and media business talking heads. If they were really paying any attention to trends in the industry, they would not be shocked. Over the last few years this has been the trend, airlines filing for bankruptcy, defaulting on their pension obligations to their union employees yet at the same time offering their CEO huge compensation packages. In many ways it is a con game. Yes, the airlines are in financial difficulty, rising fuel prices, stiff competition from low fare no frills carriers have cut into their profit margins. But it must also be understood the airlines like most major industries in AmeriKKKa have shortchanged their employees by under funding their pension contributions by billions (that’s with a b) of dollars. According to an article in the New York Times dated 09-15-05 Delta Airlines has a major shortfall in their company pension obligations. “Problems are also looming with its pension plan. If Delta's pension plan defaults, it would set a record, surpassing even the size of United's pension plan collapse earlier this year, according to estimates issued yesterday by the Pension Benefit Guaranty Corporation. Already, the agency's finances have been severely shaken by a series of large corporate bankruptcies and pension failures. The guarantor estimated that Delta's pension plan had promised benefits worth $17.5 billion, but had assets of only $6.9 billion, for a $10.6 billion shortfall. The most recent estimate of United's shortfall, by contrast, was $10.1 billion.” According to an article by Reuters dated 09-15-05 the pension under funding by both airlines was a major factor in filing. “ For both Delta and Northwest, huge pension obligations are another major issue and the main factor that separates them from low-cost carriers, Feld said. Delta's pension plans are estimated to be $10.6 billion underfunded according to the Pension Benefit Guaranty Corp., the federal agency that insures private pensions. How the airlines deal with that liability will influence the amount creditors recover, said Fitch's Warlick. Strategists said they expect Delta and Northwest to follow the path of U.S. Airways and United, which terminated their defined benefit pension plans and handed them over to the PBGC. If the carriers had to shoulder their own pension liabilities, recovery prospects for other creditors would be hurt, they said. First in line to be repaid will likely be lenders who provided debtor-in-possession financing, money obtained to keep a company operating in bankruptcy.”
Notice their strategy, pass their pension obligation off on the Pension Benefit Guaranty Corp. According to its own Website the PBGC guarantees “‘basic benefits’ earned before your plan ended, which include: Pension benefits at normal retirement age, most early retirement benefits, annuity benefits for survivors of plan participants and disability benefits for disabilities that occurred before the date the plan ended ” On the surface workers at United and Northwest Airlines can breathe a sigh of relief thinking their pensions were protected and safe. However what the PBGC Website doesn’t tell us is that the agency itself facing a revenue shortfall of over $24 billion (that’s with a b) dollars! This means the very vehicle created to be the safety net for millions of AmeriKKKan workers to protect their hard earned pension funds is itself in financial difficulty! It also means taxpayers and workers may be forced to ante up funds to bail the PBGC out. What we are seeing is class warfare, pillage and redistribution of wealth on a massive scale. It’s the corporate version of the Savings and Loan scandal or the ongoing HUD and Department of Defense fraudulence. For the most part the corporate owned media rarely explains what is going on or how it will impact the working class. It is part of their ongoing class warfare against poor and working people, designed to keep the masses ignorant of what the corporate leaders and their government cohorts and flunkies are doing to us. I doubt if Bu$h will even address the Delta and Northwest Airlines difficulties during his prime time speech tonight or the media will ask any probing questions that will shed new light on the subject or embarrass their corporate ownership. But that’s par for the course in fascist AmeriKKKa.

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