United has stated previously that it would most likely be forced to terminate and replace its employee pension plans to obtain the financing needed to exit bankruptcy. United has about USD$4.1 billion in pension funding due over the next five years.If you feel bad for them, and wish they had the kind of protections workers had in the good old days, readjust your thinking. The Wall Street Journal (the esteemed news-gathering organization, not the froth factory) reports that companies have found a way to retract benefits promised to current retirees years ago:
Many companies have already cut back company-paid health-care coverage for retirees from their salaried staffs. But until recently, employers generally were barred from touching unionized retirees' benefits because they are spelled out in labor contracts. Now, some are taking aggressive steps to pare those benefits as well, including going to court.Once the lawsuits are up and running, it only remains for the corporation lawyers (who for some reason have a better reputation these days than trahhhhhl lawyers) to wait for the retirees to give up, run out of money to fight with, or die.
In the past two years, employers have sued union retirees across the country. In the suits, they ask judges to rule that no matter what labor contracts say, they have a right to change the benefits. Some companies also argue that contract references to "lifetime" coverage don't mean the lifetime of the retirees, but the life of the labor contract. Since the contracts expired many years ago, the promises, they say, have expired too.
Many of these retirees are skilled, middle-class laborers of the sort that once comprised much of the "Reagan Democrat" bloc. But there is little consolation to be gleaned from the fact that most of those who have cooperated with the dismantling of workers' protections will, eventually, get stung themselves. Because if guys like these aren't protected, even with a contract, eventually none of us will be.
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