May 23, 2005
On May 10, a U.S. bankruptcy judge gave United the go-ahead to dump all four of its pension plans. United, the second biggest airline in the country, claimed that the funds were severely underfunded.
Underfunded? Yes, they were. Because United underfunded them. Ever since the 1990s, not only did United not put enough money into the funds to cover its pension obligations; it even "diverted" money from the funds – to pay out bigger dividends to stockholders, as well as bigger bonuses and mega-salaries to executives. In 2002/2003, United CEO Glen Tilton raked in over 5.5 million dollars compensation – while locking up 4.5 million dollars in a pension trust for himself.
United dares to say it can't afford pensions for the workers?
It's nothing but a scam – one that a lot of other companies had already run. Just to mention a few of the biggest scammers: there was LTV Steel, Bethlehem Steel, Kaiser Aluminum. They each threatened to go out of business; they each found a friendly bankruptcy judge to help them dump their pension plans. And they each went on operating very profitably – under their own name, or as part of another company.
Everything went on the same, with this difference: workers no longer had a pension plan.
Oh, yes, they now get pensions issued by the Pension Benefit Guaranty Board – which itself seems to be nearing bankruptcy! But a PBGC pension doesn't mean a full pension. Depending on how old workers were when their plan got dumped, they might get as little as one third of what they were supposed to get. And don't think about medical insurance – the PBGC doesn't cover it. As for the workers with only a few years of seniority, they won't have any pension at all.
What next? The other airlines are already crying poor, practically drooling, as they think about pulling the same swindle.
Standing in the wings, just waiting to try out the same scam, are the big auto companies. For years – very profitable ones – Ford and GM kept their funds underfunded. GM's plan today is underfunded by 9 billion dollars, Ford's by 12.3 billion.
All told, private company pension plans are underfunded by half a trillion dollars, according to the PBGC. And every single one of those underfunded plans is a time-bomb waiting to go off in the workers' faces.
Today only 21% of all workers in the private sector are covered by a regular pension – down from 41% in 1978. We are watching pensions disappear, right in front of our eyes, even as these monster companies roll up bigger profits than ever before.
It's a scam, yes. But more than that. It's an outrage.
The problem isn't lack of money for pensions. It's greed – outright, damn greed.
These companies – taking more of what we produce for their profits than at any time in the last 76 years – want still more profit.
They think, because they take us on one group of workers at a time, that they can isolate us, keep us from fighting back.
They couldn't be more wrong. The United workers can decide they won't be thrown out in the street in their old age, with nothing to show for it. They can start the fight that spreads to other workers, to the whole working class. We all have a reason to resist these attacks. We all have a reason to join a fight. And any group of determined workers can set things off.