Pensioners bent over in RI

[pb4uski]

You are right - the long term consequences of conceding to the union demands are HUGE because the company cannot afford the cost and remain competitive. I would fight with the unions for something the company can afford and if they strike, so be it.

Ronald Reagan fired the striking air traffic controllers and replaced them. The automakers could have done the same. Don't forget, there will be similar pressures on union leaders from their workers to settle so the workers can get back to work.

I'll try to convince the BOD that this is the right thing for the company in the long run. Perhaps they'll fire me, perhaps they won't. Even if they do, that's ok as I'd rather be fired than command a sinking ship.

Many times the right thing is the hard thing and I get paid the big bucks to do the right thing for the company and it shareholders.

 

[youbet]

pb4uski......

Are you actually in a current situation involving union negotiations? Or is this just hypothetical at the moment? If you are, is it in a private sector setting? industrial?

Although I retired from a non-union, industrial setting, I spent a number of years managing in an industrial, unionized setting and have been through three major strikes, two with Steelworkers (USW) and one with Teamsters (1970's). The last strike did in fact result in closing the plant and led to my eventual employment with the company from which I retired.

I'd love to know more about your situation. If you're uncomfortable discussing via post, feel free to PM me.

I admire your do the "right thing" despite it being the "hard thing" attitude, but understand that appropriate and possible actions are situational and sometimes "taking the bullet" isn't as successful or satisfying as you might imagine.

 

[donheff]

It is easy to blame the unions for the fact that management negotiated contracts it didn't honor (i.e. failed to properly fund). But corporate profits are soaring and US private sector unions are an endangered species. Reality is more nuanced.

 

[ERD50]

It is easy to blame the unions for the fact that management negotiated contracts it didn't honor (i.e. failed to properly fund). But corporate profits are soaring and US private sector unions are an endangered species. Reality is more nuanced.

Right...... That's why GM recently went through Chapter 11, they were doing so very well.

A shutdown strike, or the threat of one is about as nuanced as a baseball bat up-side the head. It is a devastating hit to the company that has to fund those 'negotiated' benefits.

Even if there is some truth in what you say, that is the current situation, it doesn't change the past, and we were talking about past negotiations which affected the future. If anything, you are supporting what we are saying. You indicate that companies are doing better now that unions are weaker. OK.

-ERD50

 

[JBmadera]

As expected, I was slammed with emails from retired family members, all on public sector pensions, and they are panicking. As I read it, these folks agreed to reduce their pensions, correct? And as such their action does not set any sort of precedent for other locals, right?

thank you for any insight.

 

[Chuckanut]

As expected, I was slammed with emails from retired family members, all on public sector pensions, and they are panicking. As I read it, these folks agreed to reduce their pensions, correct? And as such their action does not set any sort of precedent for other locals, right?

thank you for any insight.

Of course they are panicking. Many of them worked for 20-30 years with the promise of a certain pension. They made financial and career decisions based at least partly on their pension benefits. They worked to earn the pension and are now thinking somebody may take part of it away. Who would not be concerned? They cannot go back in time and redo 20 to 30 years of their lives.

And, let's face it, many if not most pensioners, are at an age where they simply don't have the health or energy to re-earn their retirement benefits. They may have a sickness or a minor disablity. It might just be painful hips and knees, or vision problems. All keep us from being what we were in our 30's and 40's. And, let's face it, age discriminatin is rampant. Even if older workers were willing and able to go back to work, in order to beef up their retirement, who is going to hire them at other than low paying jobs?

Imagine this, you work all year for a salary of $50,000. In December your boss comes to you and says"joe, we paid you $50,000 plust benefits this year because we thought we were going to make a profit of at least $100,000,000 this year, but we fell short by 30%. The economy was poor and the executives decided to buy a new corporate jet. So we are taking back $10,000 of your earnings for this year and reducing your paid vacation to two weeks from three this year. Oh, you already took your three weeks?? Well, I guess that will cost you another week's pay."

Pensions are part of the total compensation package and cannot be considered separately as though they are not part of that compensation.

 

[Chuckanut]

It is easy to blame the unions for the fact that management negotiated contracts it didn't honor (i.e. failed to properly fund). But corporate profits are soaring and US private sector unions are an endangered species. Reality is more nuanced.

I have never been a big union guy, even when I belonged to one. I did not like their politics, and often the language of the leadership was inflammatory. But, I now see they serve a purpose. Look at the people in private industry who were screwed out of their pensions by clever use of the laws and gaps in the laws. Look at miners who are killed because mines are not properly run. Look at how many workers are treated - disposable cogs in a machine - expendible. I have seen it first hand, thankfully, I have not experienced it. Read the history of this country and others. Unions were not formed because the workers had nothing better to do on Sunday. There were very serious problems in how companies treated workers.

We all need to take care of ourselves and keep our skills and abilities up to date. Never assume that anybody owes you a job or a living. But, when you have earned something, it should not be taken away. That is capitalism. We make a deal and we keep it even if it is to our disadvantage.

 

[donheff]

Right...... That's why GM recently went through Chapter 11, they were doing so very well.

A shutdown strike, or the threat of one is about as nuanced as a baseball bat up-side the head. It is a devastating hit to the company that has to fund those 'negotiated' benefits.

Even if there is some truth in what you say, that is the current situation, it doesn't change the past, and we were talking about past negotiations which affected the future. If anything, you are supporting what we are saying. You indicate that companies are doing better now that unions are weaker. OK.

-ERD50

Believe it or not I am half way with you on this issue. That is why I said it is nuanced. GM loved to blame its union issues for all of it's problems but we were not all buying Toyotas because we didn't like GM's unions it was because their products sucked. I get the impression they are catching up now -- after the bailout.

 

[sailor]

Imagine this, you work all year for a salary of $50,000. In December your boss comes to you and says"joe, we paid you $50,000 plust benefits this year because we thought we were going to make a profit of at least $100,000,000 this year, but we fell short by 30%. The economy was poor and the executives decided to buy a new corporate jet. So we are taking back $10,000 of your earnings for this year and reducing your paid vacation to two weeks from three this year. Oh, you already took your three weeks?? Well, I guess that will cost you another week's pay."

Chuckanut,
as I told you last month - I don't need to imagine this, as it already happened to me last year (although our retroactive salary reduction was only 10% not 20%). According to the corp lawyers the only state they could not do it legally was California.
So read your pension contract and see what they can legally do.

 

[ERD50]

Believe it or not I am half way with you on this issue. That is why I said it is nuanced. GM loved to blame its union issues for all of it's problems but we were not all buying Toyotas because we didn't like GM's unions it was because their products sucked. I get the impression they are catching up now -- after the bailout.

I believe you, in fact I'd say we are in full agreement on that issue, but it's actually irrelevant to this particular discussion. I'm not blaming the union for all of it's (GM's) problems either (although the Union wages/comp did cause their cars to also be more $ than Toyotas, that didn't help either).

But what I was discussing, and what is relevant to this thread, was that the Union Leaders had a responsibility (and to a lesser extent, the Union workers), to assure that the pension was funded. They dropped the ball on this. And I suspect it was intentional - they did not want it to be fully funded, as that would have drawn attention to just how much this was costing the taxpayer, and the taxpayer might have fought it. I think they preferred to let the problem be pushed into the future, and just maybe it would right itself, and for sure they would be out of office or retired or moved onto other positions before the stuff hit the fan. It was a win-win in the short term, and that's all they cared about.

-ERD50

 

[Chuckanut]

<snip> we were not all buying Toyotas because we didn't like GM's unions it was because their products sucked. I get the impression they are catching up now -- after the bailout.

My experience exactly. I bought one GM car in the 80's. At 140,000 miles it died for good. This after spending thousand of dollars a year on repairs to keep it running. It was in the shop once every three months, often for the same repairs it had only a few years before. I can't tell you how many steering racks it went through, and the transmission....!!

I hear GM is doing better these days, and that is good news. i hope they continue the trend.

 

[Chuckanut]

Ahh,, Hobson's pitchfork! Or some such thing...

 

[Chuckanut]

All of this proves we need some hard-headed reform when it comes to worker compensation. I wish we had the leadership that would take this seriously. I can't believe we cannot find a workable balance.

 

[ERD50]

We kinda got away from the public pensions, to corporate pensions/management. Since the subject of this thread was public pensions, I'll bow out of any further corporate discussion.

I'm not saying the points aren't worth discussing, and I don't mind tackling the subject, but I do think it should be in another thread. This one has already got pretty long just trying to deal with public pensions.


-ERD50

 

[sailor]

That is a sad state of affairs and shows just how badly the working person is being treated. As I recall they more or less gave you the choice of accept this or leave. Correct?

Yes.
And semantically I think it's closer to Hobson's choice (take it or leave it)
than Morton's fork (either stay and get paid less or leave and get paid fully for already worked time)

 

[pb4uski]

This is like saying that it's the woman's fault she was raped........ "she lacked the backbone to prevent it!" Or the shop owner who was robbed and beaten brought it upon herself by not being properly armed and trained in self-defense.

pb4uski......

Are you actually in a current situation involving union negotiations? Or is this just hypothetical at the moment? If you are, is it in a private sector setting? industrial?

Although I retired from a non-union, industrial setting, I spent a number of years managing in an industrial, unionized setting and have been through three major strikes, two with Steelworkers (USW) and one with Teamsters (1970's). The last strike did in fact result in closing the plant and led to my eventual employment with the company from which I retired.

I'd love to know more about your situation. If you're uncomfortable discussing via post, feel free to PM me.

I admire your do the "right thing" despite it being the "hard thing" attitude, but understand that appropriate and possible actions are situational and sometimes "taking the bullet" isn't as successful or satisfying as you might imagine.

youbet, no it was a totally hypothetical situation. Some posters were suggesting that managements had no choice but to agree to benefits advocated by unions that ultimately were, IMO, a significant factor in some automakers and airlines going bankrupt. While I agree that they had a number of poor choices to chose from, I was suggesting that managements too often took the short-term easy way out rather than the more difficult and controversial long-term right thing for all their stakeholders (shareholders, debtholders, customers, employees, suppliers, etc).

I'll freely admit that hindsight is 20/20 and the easy way out is compellingly attractive in many real-life situations (especially if you know that you won't be around when the stuff hits the fan) but if you value your legacy at all you need to stay principled even though it is very hard to do.

 

[pb4uski]

We kinda got away from the public pensions, to corporate pensions/management. Since the subject of this thread was public pensions, I'll bow out of any further corporate discussion.

I'm not saying the points aren't worth discussing, and I don't mind tackling the subject, but I do think it should be in another thread. This one has already got pretty long just trying to deal with public pensions.


-ERD50

I agree we have been sidetracked a bit, but many of the themes of the problems with public and corporate pensions are similar in that decisions were made not considering or appreciating the full extent of the cost, the cost was not properly funded, pensioners relied on what they were promised in their financial planning, the combination of overpromising and underfunding is a problem and it is unclear exactly who will bear the financial consequences.

However, it seems clear the management, politicians and union officials who negotiated these deals are not going to bear the consequences of their problems as much as pensioners and taxpayers and share/debtholders will.

 

[youbet]

many of the themes of the problems with public and corporate pensions are similar in that decisions were made not considering or appreciating the full extent of the cost

You may be a bit naive in regard to this. Or perhaps I'm just reading it that way. Leadership in both the public and private sectors has participated in decisions leading to the eventual downfall of the pension plan or even of the enterprise itself. They allowed (caved in to might be a better expression) agreements that they could predict would not be sustainable in the long run. But change is part of life. Companies fail. Governments fall. Pension plans crumble. Ask the folks at UAL who are now collecting benefits from the gov't pension insurance fund. There is no obligation on the part of public or private sector leadership to make all decisions based on the goal that their organization will survive, as-is, for eternity. Thus UAL conceded what it felt it had to to survive without a crushing strike, eventually went bankrupt and now has re-emerged with a new pension situation and labor agreements. That strategy has likely been more successful than taking a lengthly and crushing strike that would have likely caused the bankruptcy sooner or caused them to fall to a distant third or fourth place for decades.

Of course, we'll never know for sure. But my point is, don't think for a minute that public or private sector leadership isn't aware that their current behaviors might dramatically change the future of their enterprise. If Illinois goes bankrupt a decade from now, the politicians who made the pension promises and who failed to fund them will be happily retired on the beach sipping drinks with umbrellas. A new government of some sort will be formed. Life will go on. They aren't nearly as concerned about the eternal existence of the "organization" and about keeping promises as you might think.

 

[pb4uski]

You may be a bit naive in regard to this. Or perhaps I'm just reading it that way. Leadership in both the public and private sectors has participated in decisions leading to the eventual downfall of the pension plan or even of the enterprise itself. They allowed (caved in to might be a better expression) agreements that they could predict would not be sustainable in the long run. But change is part of life. Companies fail. Governments fall. Pension plans crumble. Ask the folks at UAL who are now collecting benefits from the gov't pension insurance fund. There is no obligation on the part of public or private sector leadership to make all decisions based on the goal that their organization will survive, as-is, for eternity. Thus UAL conceded what it felt it had to to survive without a crushing strike, eventually went bankrupt and now has re-emerged with a new pension situation and labor agreements. That strategy has likely been more successful than taking a lengthly and crushing strike that would have likely caused the bankruptcy sooner or caused them to fall to a distant third or fourth place for decades.

Of course, we'll never know for sure. But my point is, don't think for a minute that public or private sector leadership isn't aware that their current behaviors might dramatically change the future of their enterprise. If Illinois goes bankrupt a decade from now, the politicians who made the pension promises and who failed to fund them will be happily retired on the beach sipping drinks with umbrellas. A new government of some sort will be formed. Life will go on. They aren't nearly as concerned about the eternal existence of the "organization" and about keeping promises as you might think.

I guess we'll have to agree to disagree on naivety.

The crushing strikes that you refer to affect union members just as hard as employers so after a bit of time the union members who have mortgages to pay and mouths to feed are just as eager to get things settled and move on as the employer is. There is no upside for either party in an employer going bankrupt, particularly for private enterprises and their shareholders and debtholders. No C-suite executive wants to have leading a company into bankruptcy on their resume or having bankruptcy pinned to actions during their tenure.

You may have a point that it is easier for public leaders to cave in to union demands in that they know the organization will survive but I suspect even for them they don't want to see their legacy tarnished - but I may be wrong - they may not give a care.

I think we do agree that the problems are, at least in part, the result of leadership caving in to union demands that created a high risk of ruin for the organization. What we have different views on is whether the risk of ruin was the result of neglect or foolishness.