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December 06, 2002

United Airlines & Bush Anti-Worker Assault

Why is United Airlines careening towards bankrupcty?

In the wake of 911, all manner of industry has been bailed out, from insurance companies to Eli Lilly. And weren't airlines specifically offered bailout money to recover?

Yep, but the White House has conditioned the money on airlines screwing their workers. No deep pay cuts for workers, no loans. So the White House panel entrusted with the power to issue loans to help airlines rejected 2-1 any help for United because of insufficient "cost savings" (pay cuts).

And forcing United into bankruptcy is a bailout for other airlines looking to put a further squeeze on workers in the airline industry. As this NY Times article explains, rival airline stocks surged on news of United's pending bankruptcy on plans for "cost savings airlines will be able to achieve by wringing out concessions from employees by wielding the bankruptcy hammer."

And here's the odd cruel thing-- in bankruptcy, labor unions with their union contracts are treated as creditors. Yet under the manipulation of present bankruptcy law, investors in airlines are able to go into bankruptcy and gain leverage over workers without losing their investment stake in the companies.

Oh, and United adds one more bizarre variation. The labor unions, in exchange for deep concessions during the last big economic downturn, were given stock in the company. In fact, the United unions own 55 percent of the stock.

So how come the United management is running towards bankruptcy in defiance of the will of the majority of its stockholders? Because the deal back then only gave the unions three seats on the board of directors. So they have some leverage but no real power to control management.

Where are the conservative law and economics types denouncing wayward management betraying the will of investors? Oh yeah, they only care about such issues when the investors are rich folks. When the investors are workers, whether in pension funds looted by corporate crime or unions outright owning a company like United, they prefer to see management looting the store.

Destroy United, then go after the unions at rival firms.

All as the Bush White House gloats at helping send wages in the industry plummeting.

Terrorists hijacked United Flight 175 to destroy the south tower of the World Trade Center and plunge the airline industry into its downward spiral.

But remember in the future that it was the pro-wealthy fundamentalists of the White House who decided to make sure the pain would deepen and continue for years for the workers at United and throughout the industry.

Posted by Nathan at December 6, 2002 08:23 AM

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