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Old 09-23-2009, 10:37 AM
 
32,551 posts, read 51,112,793 times
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AA has turned the lives of many retired people in this area upside down today with the announcement that it is pulling the plug on its portion of health care coverage for those people who are non-union and over 65...
it probably considered it sooner and decided to do it now because it is going tooth and nail with the unions over health care coverage provisions right now in contract renegotiations

some of our friends are the retirees--they are freaking I am sure
some of them have some significant health issues
even though pre-existing conditions are covered with the new plan AA is throwing them into they have no choice about which plan was picked for them and obviously no control over what their premiums will cost...

most of them -- like so many others in industries that have been cutting costs to raise profits--thought they were promised health care coverage all through retirement for them and their spouses (and some of them have their grandchildren under their care/coverage)

I know other companies have done this earlier because they declared bankruptcy and could get out of their plans that way like Delta and United

I think some people will probably try class-action suit to stop it but that won't work...
most of the retirees have done pretty well because AA has pretty good pension and if they had stock and sold it before the price dropped several years ago they benefitted from that too...but the non-union people don't have the clout of the pilots or others...and lots of them kept their stock which has almost no value now compared to its high point--and AA is floating more stock which will dilute the value even more...

just another reminder that promises are made to be broken at some point or other
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Old 09-23-2009, 11:15 AM
 
Location: Dallas/Ft. Worth, TX
2,307 posts, read 6,787,442 times
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Unfortunately this is going to become more and more common as time goes on. It only takes one large corporation to do this for the other corporations to see how well it would work for them and it snowballs.

I'm not a fan of the new government proposed health care system as I see major problems, for the people, down the road. If a national health care plan is created I would not be surprised to see private corporations either significantly scaling back on theirs or even eliminating theirs altogether. After all, once a national plan is available a corporation can dump theirs since you will have one available! Again, all it takes is one large corporation to do that, and get away with it which they would, and it will snowball.

If you think this sort of thing is not possible or will never happen then think again! You can use the 401K retirement plan as a good example. Once it became entrenched many corporations killed their own "Pension Plans" and started to offer contributions to the 401K. If you have been watching the news many corporations are now cutting back their contributions, some even stopping the contribution, to the 401K. This is another program that is saving corporations huge amounts. Now that they are cutting back or eliminating their contributions it is saving them even more.

The worst part about this whole situation is a new prevailing attitude that seems to be in the making. The attitude is that our senior and retired citizens are last in line for anything, and to some extent almost considered expendable. Sound crazy? How about Medicare D, Social Security who's funds were continually plundered to balance the budget, reductions in Medicare payments and SS payments, Tax laws (Federal, state and local) that are being changed to increase the burden on the elderly (Look at many states deleting the Senior exemption on property taxes for an example), etc., etc.

What is so sadly ironic is that our seniors today are the ones who sacrificed during WW I, WW II, Korean War, Vietnam, and every other major conflict and problem. They sent their children off to these conflicts and wars to die for our freedom. They sacrificed at home to raise much of the current crop of leadership we have in our government. Yet even now they are being treated like last place citizens!!
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Old 09-23-2009, 11:31 AM
 
32,551 posts, read 51,112,793 times
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the problem is that the rules of accounting do not require that corporations carry that obligation as something that must be financed and repaid==like its real debt/bonds

all of those promises worked great as long as the company was managed properly but somewhere along the way some people decided that they did not need to plan to pay out all those costs--and certainly not plan for rising health care costs--

there is nothing to keep companies for downgrading their health plans now--with or without the govt plan in place--
the only thing that would make them NOT cut off their employees is the fact that the govt is planning to tax them if they don't...
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Old 09-23-2009, 11:54 AM
 
Location: Aurora, CO
7,348 posts, read 11,657,261 times
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Don't forget that in April of '03 management went to the unions and pleaded with them to accept cost-cutting concessions. Right before the deal was to be signed, the unions found out that AA executives were set to receive over $40 million in retention bonuses. That led to Don Carty's resignation. Nice eh? Prime reason why I never fly on American (that and their overpriced service sucks).
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Old 09-23-2009, 01:13 PM
 
Location: Dallas/Ft. Worth, TX
2,307 posts, read 6,787,442 times
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Quote:
Originally Posted by loves2read View Post
there is nothing to keep companies for downgrading their health plans now--with or without the govt plan in place--
the only thing that would make them NOT cut off their employees is the fact that the govt is planning to tax them if they don't...
Is the government planning to tax AA because they have "turned the lives of many retired people in this area upside down today" by throwing them to the side after working many years with expectations that their hard work would reap them the benefits they deserve? I seriously doubt that just as I seriously doubt the government will tax companies enough additional, as a penalty, if they reduce or eliminate their employee health care plans and force people on a government "Nationalized" health care plan.

The fact is our government is very much pro-business at the expense of the very people they are there to serve! Whatever tax the government imposes on corporations, as a punishment for reducing or eliminating their health care plans, will be minuscule in comparison to the cost to the tax payers to pick up these peoples health care. Additionally these punitive taxes will be offset by some other tax reduction that the government gives big corporations with the express intent, albeit not made public, to offset the very punitive tax they impose. It will be typical government slight of hand BS at the expense of the people!!
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Old 09-25-2009, 07:52 PM
 
Location: Willowbend/Houston
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AA has fought hard to keep its pension plans for the retired. Every other carrier threw them into the wind when they filed for BK. AA's workforce is paid more than any other legacy carrier.

Dont have a whole hell of alot of sympathy considering AA's retirement plans are better than any other legacy carrier.
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Old 09-25-2009, 08:17 PM
 
Location: Bella Vista, Ark
77,813 posts, read 91,547,540 times
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It does suck, but guess what? I am retired as are most of our friends and many who live in our area: very few get medical insurange as part of their retirement package. I am not saying none do, but many do not and some that used to have had it cut or cut back.

Nita
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Old 09-26-2009, 12:29 AM
JS1
 
1,898 posts, read 6,356,173 times
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Quote:
Originally Posted by loves2read View Post
the problem is that the rules of accounting do not require that corporations carry that obligation as something that must be financed and repaid==like its real debt/bonds

all of those promises worked great as long as the company was managed properly but somewhere along the way some people decided that they did not need to plan to pay out all those costs--and certainly not plan for rising health care costs--

there is nothing to keep companies for downgrading their health plans now--with or without the govt plan in place--
the only thing that would make them NOT cut off their employees is the fact that the govt is planning to tax them if they don't...
That is not true. Unlike pensions, the health insurance benefit for retirees is not forever lasting, by contract or law. They only need to account for expenses for post-retirement health benefits at the present time.

It can be cancelled at any time, and if the retirees thought otherwise, they were wrong.

If AA were required to pre-fund the future health insurance costs for retirees, they would go out of business. Would that be better? It seems that the employees hate AA so much they would prefer that.

For years the employees have been bitter and unrealistic and they expect people to cough up big bucks to fly on their airline so they can continue to collect generous compensation and benefits packages. Put on blinders to economic reality at your own peril.
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Old 09-26-2009, 08:19 AM
 
32,551 posts, read 51,112,793 times
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companies negotiate pay wages based on benefits--they also make promises in large type that they cancel or negate in small print
AA has kept health benefits for its retirees in place longer than most other airlines and longer/better than some other companies--
the fact that some companies have misrepresented the longevity of the program to people who worked there for 20 yrs or more or that some companies went bankrupt and terminated/reduced their programs does not change the fact that AA did promise a certain level of health coverage for its retirees that are non-union while it was negotiating their pay raises and benefits in the past...and often times used that leverage to hold pay down in the present for future benefits...
some people pre-paid into their account so that they would fund their portion of insurance costs--now their return takes place after the downturn in the economy--if AA had done this a year ago--those people would odd-on have gotten probably 20% more than what they are going to get now...


this is not so much for AA employees--who may or may not be well paid for their industry
AA was an extremely profitable company in the past and frankly its employees--not higher level mgmt--are the reason it has not gone bankrupt before now...AA pilots also have a pretty overinflated sense of their own importance and often other employees are forced to sacrifice because of the power of that union
I can guarantee you that high level retirees will not be losing their health insurance because they will have had separate contracts that guarantee coverage--Bob Crandall is not worrying about how to pay his health insurance...senior mgmt has always covered its collective ass
this affects the lower level white collar people who are part of the traditional work force of the past--
there are plenty of other industries where people have been screwed the same way

which is one reason that I returned to teaching long enough to retire--so I could have access to insurance after retirement--while the rates might go up just because it is such a large pool and because the legislature knows a firestorm would start if the state tried to cancel health ins for retired teachers I think it is viable vs other private companies plans...
even unions have taken hits--Ford stayed solvent because it was able to buy out of its retirees' insurance plan--unlike GM
of course companies have refused to confront how to fund those plans because it would definitely cut into their profits and make share prices drop like rocks--
and don't you think it is a little self-serving when every company is the trustee of the benefit plan--put some workers on the board and see how the outlook changes...
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Old 09-26-2009, 08:59 AM
 
Location: Willowbend/Houston
13,402 posts, read 22,670,952 times
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Quote:
Originally Posted by loves2read View Post
AA was an extremely profitable company in the past and frankly its employees--not higher level mgmt--are the reason it has not gone bankrupt before now...AA pilots also have a pretty overinflated sense of their own importance and often other employees are forced to sacrifice because of the power of that union
Yes, AA's Pilots Union is absolutely off their rocker. They dont care about working with anybody and they love to see the company fail. They are already overpaid. It the FA's, ground staff, and passengers who suffer because of the absurdity of the pilots union.

Im not a huge Arpey fan, I think hes too conservative, but the AA employees (non pilot) respect him for one reason: hes tried like hell to keep the company out of BK. If the pilots dont stop their absurdity, AA will end up in BK at some point and it will only hurt them more.
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