From Aviation Week and Space Technology 2005 May

UNITED NO MORE

The latest chapter in the 29-month-old reorganization of United Airlines is likely to wield enormous impact on the fate of its fellow legacy airlines, and could possibly trigger a wider national crisis over employee pensions.

In approving an agreement between United and the Pension Benefit Guaranty Corp. (PBGC), terminating defined pension plans for four unions, Judge Eugene R. Wedoff of U.S. Bankruptcy Court set off a chain reaction of protest and strike threats from labor, followed by calls for reform of U.S. law governing bankruptcy and pensions.

By terminating these plans, United shifts the assets to the PBGC, which takes over responsibility for payments due employees from a guaranteed base of $6.6 billion, estimated to be on average 25% less than anticipated. United is expected to offer defined contribution plans as substitutes, such as the 401(k), that will have less impact on its bottom line. The shift of the defined benefit plans to the PBGC will relieve United of obligations to pay $4.5-billion to the defined benefit plans over five years, and demonstrates that this alternative under bankruptcy protection is both legal and viable. US Airways shed itself of defined pension obligations last year against objections of the Air Line Pilots Assn. and through negotiations with other unions.

Terminating the plans--underfunded by $9.8 billion--was a difficult, necessary and unavoidable step, according to United Chief Financial Officer Jake Brace.

Read Full Article at AviationWeek.com
View Table of Contents
© 2017 McGraw-Hill Companies, Inc. (The)

Products & Services
Legal Services
Legal services consist of lawyers, law firms, and providers of services related to intellectual property (e.g., patenting, licensing, and trademarking), incorporation, contract development, law suits, and other legal matters.
Legal Software
Legal Software is software used in the legal profession to automate processes, to create forms, to access court databases and other related applications.
Banking Software
Banking software offers high-end technological and economical banking solutions to mid and large-size banks worldwide. Banking software equips banks with the latest technology trends in banking.
Human Resources Services
Human resources services administer a company’s employee policies, compensation plans, and benefits such as vacation time and health insurance. They may also evaluate management performance and oversee employee relations.
Plastic Molding Services
Plastic molding services use a number of different molding techniques to produce components, including thermoplastic and thermoset injection molding, blow molding (includes injection blow molding), rotational molding, thermoforming, structural foam molding, compression molding, resin transfer molding (RTM), and others.

Product Announcements
United Equipment Accessories, Inc. - Rotary Unions for Forestry Equipment
United Equipment Accessories can combine multiple types of fluid swivels and slip rings in a single self-contained, multi-media rotational assembly. With the capability to manufacture rotary unions of... (read more)
Metal Improvement Company - Unique Laser Peening Services
The Metal Improvement Company laser peening process uses a unique Nd:glass, high output, high repetition laser combined with precision robotic manipulation. During the laser peening process, the laser... (read more)
Fischer Connectors, Inc. - White Paper - Managing Risk in Medical Connectors
Insight for those involved with the design and manufacture of medical devices about some important upcoming changes that will be enacted by the FDA. Manufacturers will soon bear responsibility for... (read more)
Crosslink - Anticorrosion JDA with Hentzen & Wayne Pigment
Crosslink is pleased to announce a JDA with Hentzen Coatings, Inc., the world's largest supplier of coatings to the US Army, and Wayne Pigment Corp., the largest domestic supplier of corrosion... (read more)
ShockWatch - ShockLog Impact and Environmental Recorders
ShockWatch Acquires ShockLog Impact and Environmental RecordersMedia Recovery, Inc., a portfolio company of Capital Southwest Corporation (Nasdaq:CSWC), announced the acquisition by its ShockWatch... (read more)
PowerEdge Products, LLC - Switchboards
Switchboards benefit from the high quality termination of grounding and bonding conductors provided by the GND Terminator™. A UL 467 recognized grounding bar, the GND Terminator™ provides... (read more)

Topics of Interest

United parent UAL Corp. on Friday struck a significant deal to pass control of its four underfunded pension plans to the U.S. Pension Benefit Guaranty Corp. (PBGC), and the agency would drop its...

United, Pilots Sent Back To Drawing Board By Judge AviationWeek.com, Jan 10, 2005 United was hit with a setback in bankruptcy court Friday, when Judge Eugene Wedoff rejected a pilot concession deal...

United was hit with a setback in bankruptcy court Friday, when Judge Eugene Wedoff rejected a pilot concession deal reached last month and ratified on Thursday, but there is a possibility that the two...

United was hit with a setback in bankruptcy court Friday, when Judge Eugene Wedoff rejected a pilot concession deal reached last month and ratified on Thursday, but there is a possibility that the two...

House Education and Workforce Chair Rep. John Boehner (R-Ohio) said yesterday that he expects bipartisan agreement on all the major issues of a pension reform bill that will have significant...