Tuesday, 17 May 2005

About those pensions

In yesterday’s Political Diary, Holman W. Jenkins, Jr. reminds us that the recent pension ills at United Airlines are, well, the fault of its employee owners.

Pundits on the weekend talk shows lamented Corporate America’s “breaking of faith” with workers at United Airlines, whose pension plans were gutted in a bankruptcy proceeding last week. Expect more of the same from politicians, and not just Democrats, as Big Labor exploits the issue to promote its opposition to private Social Security accounts and its support for national health care. The political reaction, like yesterday’s pundit reaction, can also be expected to betray perfect and pristine ignorance of what actually occurred at United.

United represents not so much a corporate failure as a labor failure. No industry is as strongly controlled by its workers as the airline business is, and United was the ultimate case in point. The company was 55% owned by its unions; the union bosses controlled three seats on the board and effectively hired and fired the CEO. Labor was sitting on both sides of the table in the 1990s, in short, when workers decided to boost their compensation with unfunded, and unfundable, pension promises while also extracting maximum dollar in current wages and benefits. The same “employee-owners,” in other words, who looted the company by awarding themselves the richest pay deal in the industry also effectively voted to loot the federal government’s Pension Benefit Guaranty Corporation, which they knew would be the ultimate guarantor of United unfunded pension bennies.

Keep all this in mind as the labor campaign gears up, especially when angry, red-faced pilots go on TV to blame their troubles on Corporate America and fatcat CEOs.

American Airlines is headquartered in Fort Worth, and Southwest Airlines in Dallas, so the airline industry is closely monitored here in the DFW metroplex. What amazes me is the amount of whining that comes from the majority of the airline industry, when in the face of all of the economic woes the airlines have been subject to of late, Southwest is still turning a profit.

The reasons for this are many: they offer outstanding customer service, they only service short routes, they do not have a union influence. Southwest employees are enthusiastic, sometimes annoyingly so. However, I’d rather be annoyed by someone’s cheeriness than by someone’s grumpiness (hello, American?).

I am, for the most part, anti-union these days. There was a time and place in our history when workers’ unions were needed, and needed badly. Many perks and benefits workers enjoy in today’s workplace came about as a result of union influence.

But the time of the union sticking up for the little man is over with. More often than not these days, my perception is the unions are harming their members, and the companies which employ those members, more than they are helping them, and only the union bosses have anything to show for it. United’s employees only have themselves to blame.

[Emphasis added in quoted text.]

posted on May 17, 2005 3:58 PM




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