Friday, January 20, 2012

Losing Your Retirement in 2012

The latest new thing for major American corporations to do is declare bankruptcy.  All the cool companies are doing it!  Here's how:
  • Company X is the brand that everyone in America and a large number of people around the world know and do business with
We Worship You With Our Money
  • Company X is actually owned by Company Y.
Your Teachers Told You This Math Stuff Would Be Testable
  • Virtually no one has heard of Company Y yet their holdings include the internationally known Company X.
  • Company X employes a lot of people and has employed many more over the years to whom it either owes pensions to in the future or is currently paying pensions to right now.  
  • Company Y doesn't like paying pensions so it declares bankruptcy.
  • Bankruptcy proceedings allow Company Y to restructure (read reduce) pension payments to their current and former employees.
  • Company X continues to do business during the restructing of Company Y as if nothing is happening.
 Financial Worship Continues Uninterrupted
  • Company Y negotiates lower payments for their all their creditors, which they justify by saying that actually having to meet their obligations makes them unable to compete in the marketplace, the business model isn't sustainable (despite the fact that Company X continues to operate), etc.
Who is Company X?
  • In late 2011, American Airlines was Company X
  • In January of 2012, Hostess became Company X.  You can read more details here.
  • I'm probably missing several other major companies that are doing the same thing.
If you're a member of the middle class in America, this should enrage you.  I say that companies shouldn't be allowed to avoid paying what they have promised to pay.

TL;DR: Large corporations have found a new way to screw the little guy.

Update, February 1, 2012: According to this article published today in the New York Times, "American Airlines said Wednesday [today] that it wanted to cut 13,000 jobs and terminate its workers’ pension plans as it seeks to cut its employee costs by 20 percent while operating in bankruptcy court. " 


On April 23, 2012 the New York Times published an update noting that the parent company of American Airlines went to court in an attempt to void its contracts with three labor unions.  Here is the article.

39 comments:

  1. Hey, this is in response to your comment a few weeks ago! I had blood tests done every few weeks while I was feeling "low." I get a full analysis of all my levels and see exactly what i need to change in my diet. Its actually an important component to skiing fast! Thanks for your interest! Cheers

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  2. I have heard about this. All about being smart. When companies become smart, people become smarter than them,

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  3. It should. But only few of us care to even think about it, when you see that the majority prefer to not care it becomes depressing.

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  4. This comment has been removed by the author.

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  5. Awful, but if the system is in place to allow them to do that, then there's something fundamentally wrong on the highest level.

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  6. Thanks for explaining so us simpletons can understand.

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  7. they love smashing us from behind :(

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  8. What utter bullshit! No me gusta tampoco!

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  9. now a days its suicide to entrust your financial security to your job. and here is more proof

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  10. What BS. Nowadays the only way to get ahead in business is to exploit loopholes like this. Thanks for posting, we need to spread awareness about all this stuff.

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  11. That's really terrible... Imagine if people couldn't save much when they were working and relied on their pensions in their old age.

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  12. It's absolutely sickening that the government are doing this to you guys man, seriously, the way corporations exploit laws to get out of providing people with the living they're owed really irritates me for some reason.

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  13. that is awful aren't there laws about this?

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  14. I know that it has become horrible for you guys. What companies are doing to the American middle class is treasonous. You're the backbone of that country and deserve better treatment. You drive the economy and made that country great. Now who do they think is going to buy the things they sell, when they aren't paying you?

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  15. Greed and selfishness fuel the desires of the 'Man' to take full advantage of his lesser earning brethren. He sees us not as a brother, but an enemy to keep close and manipulate until our usefulness is gone.

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  16. I will never not be surprised by corporate America's ability to fuck you in the ass and make you thank them for it.

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  17. What if there were no other way for Company Y to continue to do business, other than by restructuring and cutting costs such as pension contracts?
    Can you weigh that against the potential job losses and decline in economic activity that would occur in the face of liquidation?

    Just my 2 cents. Otherwise good post, following!

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    1. I haven't heard anything about executive pay being curtailed during these restructuring proceedings. I believe businesses should be compelled to look at these options and selling off assets before reducing payments to employees.

      My bottom line on the issue is that when a business goes into bankruptcy the business should cease to operate. Otherwise, the protections of bankruptcy shouldn't be provided to the company in question.

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    2. I absolutely agree with you on executive pay (and priority lawyer pay!) during bankruptcy. Transparency has always been a corporate ethical issue.

      But I have to disagree with you about a business ceasing to operate when it enters bankruptcy. The philosophy of the bankruptcy courts have been to save the company, the products/services it provides, and most importantly the jobs. I think bankruptcy protection is absolutely essential in a modern economy.

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  18. Deus Ex slowly becomes reality

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  19. shell companies should not be allowed and the parent company should always be on the packet/advert/whatever.

    So Mr Kipling cakes - should have Smith & Western gun company logo displayed.

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  20. interesting

    http://underthefluorescents.blogspot.com/

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  21. Very well said. This happens all over the world and it should not be let.
    www.thoughtsofpaps.com

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  22. Retirement? Hahahahahaha. What the hell is retirement?

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  23. What's sad is that this is what people have come to expect. It's not even surprising anymore. I guess it's more disgusting than sad, but still..

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  24. disgusting. Reading about the horrors of greed/capitalism run amok always makes me think of Homer from the Simpsons when he said: "In theory, Communism works....in theory."

    one day. maybe.

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  25. I'm with Angry Vegetarian: sad, but not surprising.

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  26. oh wow. and people are still too ignorant to believe that

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  27. This is just one small keynote in a LOOOOOONG list of why we as a nation are where we are, and it always boils down to the same damn thing: Big Corpo doing it's damndest to maximize it's collective profits at the sacrifice of it's OWN fucking lower-level (i.e. - class) employees.

    I may sound mad to you, and with that stated I'd like to point out that I'm not mad. Been there, still there.

    I'm fuckin' bitter, yo.

    Yes, this angers me. This should anger YOU too. This kind of stuff is what should piss off ANYONE of the middle-class.

    'S why I write the way I do, y'know? I have to actually work at it in order to make sure that my whole "SCREW THE CORPORATE WORLD, DOWN WITH THE GOVERNMENT SHILLS, RESPOND TO CLASS WARFARE WITH REAL VIOLENCE!" outlook is actually set aside in order to write any kind of lyrics or poetry that reflects something other than that bitterness.

    Keep in mind, I've been there. Ground-floor factory labor, forced to live that there's a "us down here" and a "them up there" not even as a metaphor but as a LITERAL fact - all the executives and office workers have the second floor that leads out to ground level, the rest of us slaves grind away in the sub-level, further down the hill.

    A year and three months I ground my way through there, doing excellent work and surviving multiple layoffs merely from the sweat of my brow. Eventually though, I had to leave that shit - as a man, there's only so much I will EVER take. 'Sides, I found another job within two days of leaving that place, but they're STILL up (even though they've been bought out by yet another group, who immediately claimed bankruptcy).

    Sorry 'bout the wall o' text response, 's just I ranted like this when I heard about Hostess going out of business (really? REALLY hostess?) and the commentary made by one of their people that they could honestly make more money by shipping jobs out to other countries.

    I heard this on freakin' f.m. radio in the middle of the afternoon whilst getting gas, just rattled out like it was a NORMAL thing.

    Yeah. Not mad, just bitter.

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  28. Good post!


    http://placequotehere.blogspot.com

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  29. Too bad bankruptcy doesn't work for student loans.

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  30. These companies and corporations are so sneaky and devious and it seems there is no one to protect the public, as the politicians are all bought off.

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  31. Yeah that pretty messed up. Great breakdown btw.

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